I want to buy stocks for my grandchildren. These accounts provide an opportunity to start investing in the stock market, usually with a very small amount. All of the dividends earned are reinvested in additional shares of stock, which explains the name dividend reinvestment plans. Most companies do not charge fees when dividends are reinvested. There are a number of benefits to Drips.
Some companies sell stocks to Drip investors at a discount to the current market price.
Companies vary in their procedures for establishing a Drip account. Some companies allow you to open an account directly with them. Some do not require you to own any shares to establish the Drip. Other companies use a transfer agent, which means you register and open the account with their agent. Many companies require that you own one share of stock to open a Drip.