| Direct Stock Purchase from Home Depot |
|
|
|
|
|
10can
Contributing Member
Cash: $ 8.55
Posts: 39
Joined: 13 Jul 2006
|
| Direct Stock Purchase from Home Depot |
 |
|
I am a little confused on Direct Stock Purchase.
I thought that companys offered this because it is a better deal than going through a broker.
I was looking at the Home Depot's investor site and this is the information...
The Home Depot Direct Stock Purchase Plan (DSPP) enables you to invest a minimum amount in Home Depot stock and build your stock ownership over time. It's designed for individual investors who might otherwise avoid making small, long-term stock purchases because of large minimum brokerage fees.
Transaction Fees
For each transaction, a small service charge is deducted from your investment plus the pro rata amount of brokerage commissions (generally 5 cents per share for purchases and 15 cents per share for sales). Service charges are:
* For first-time investors - $5.00
* For subsequent purchases - 5% up to maximum of $2.50
* Sales $10.00
If I buy the stock through Firstrade they only charge a flat rate fee of $6.95 which is cheaper than Home Depot's Plan.
Is this correct or am I missing the fine print at Firstrade and there are other fees than just the $6.95 that I don't know about?
Thanks
|
Tue Aug 08, 2006 10:45 pm |
|
|
Master of the Universe
New Member
Cash: $ 1.70
Posts: 8
Joined: 12 Aug 2006
Location: Brooklyn, NY
|
It doesn't make sense if you're making a single purchase, but they did point out that it's designed for long-term stock purchases. If Firstrade is anything like Scottrade or any other brokers, they will charge you the same $6.95 commission on subsequent purchases. So if you buy say, 10 shares a month for the next 12 months, you would have ended up paying $83.40 ($6.95 x 12), while if you enrolled in the direct purchase plan, it would have only costed you $32.50 (initial $5 + ($2.5 x 11)) for the same purchase.
|
|
Sat Aug 12, 2006 4:01 pm |
|
|
|
