Better yet, here's how I started investing in drips. After you purchase one share, you can generally set up an automatic withdrawal or make regular deposits into your account. Again, the good news about drips is there are no brokerage fees. Normally, purchasing stocks must be done through a broker. Not much, but there are a few things to remember.
Dividends are taxable.
You will be required to pay taxes on the money that you make, but not on the stock appreciation until you sell shares. DRIPs are not offered by all companies. If you are looking for smaller, more aggressive growth companies, you will need to open a brokerage account. When you decide to set up a DRIP account or purchase more shares in an existing account, you will not be able to choose the day and time of your purchase. Your purchase will be made on a schedule set up by the company or the company's trustee.