Bank of America

Ticker Symbol: BAC Exchange: NYSE

A No-Fee DRiP Plan with a Monthly Optional Cash Purchase Option

Quick Takeaway: Not only does BAC offer a very solid, no-fee DRiP plan for DRiP investors, but it also offers investor's the ability to participate in the potential turnaround of one of America's largest financial institutions. Since the financial crisis of 2008-09, BAC has paid a paltry dividend of less than 1%; however, historically, the company's yield has been much higher. IF the company can turn itself around, it's dividend is poised to increase significantly.

Keep reading for more detail on Bank of America and its DRiP plan.


Company Profile: Bank of America is one of the world's largest financial institutions providing a wide range of banking and financial services to individuals, small and middle-market businesses and large corporations. The company retail banking footprint covers more than 80% of the U.S. population. In addition, Bank of America has banking operations in more than 40 non-U.S. countries around the globe. The company acquired Merrill Lynch at the height of the U.S. financial crisis in 2008. Bank of America is a component of both the S&P 500 and the Dow Jones Industrial Average.

DRiP Plan Summary:
Bank of America Corp.
First Share Rating
Purchase Fees
NONE
Dividend Reinvestment Fee
NONE
Discount on Reinvested Dividends
NONE
Min. Shares to Enroll?
1
Direct Enrollment(DE)?
Yes
DE Minimum Investment
$1,000
Optional Cash Purchases?
Yes
OCP Minimum
$50 transaction
OCP Maximum
$120,000/yr.
OCP Purchases Made
Weekly
Transfer Agent
Computershare

Summary of Plan Fees

Bank of America offers a no-fee DRiP plan for investors. There are NO brokerage commissions, fees or service charges for any shares purchased as part of its dividend reinvestment plan. The company pays all fees associated with optional cash purchases as well.

Optional Cash Purchases (OCP)

Most dividend reinvestment programs offer participants the ability to make optional cash purchases on an ongoing basis. Bank of America offers its participants the ability to make OCP purchases at any time (purchases are made within five days of receiving payment from participant), if desired, without paying brokerage commissions, fees or service charges. Once enrolled in BAC's DRiP plan, you can choose to make additional share purchases at any time by submitting a check or, on a monthly basis, by authorizing automatic debit from your U.S. bank checking or savings account.

Additional contributions must be at least $50, but can not exceed $120,000 in any calendar year. The Administrator makes purchases within five days of receiving participant's funds, which is a huge benefit for plan participants. More frequent investments by the Administrator provides more flexibility to the plan participant as to when he/she may contribute additional funds to the purchase of BAC stock. Some plans only invest once per quarter or once per month which limits the flexibility of the DRiP plan participant.

Minimum OCP Investment: $50/transaction
Maximum OCP Investment: $120,000/year
Purchases Made: Weekly (w/in 5 business days for checks)
How Price Determinded: Weighted-average market price paid for shares on date of purchase

Stock Certifcate Options

Many people want to have the actual stock certificate in hand. However, it is generally advisable that a DRiP investor deposit his or her stock certificates with the Plan Administrator for safekeeping. If you choose to hold your shares in certificate form and they are lost or stolen, you will no longer be able to prove your ownership of the shares.

As such, the Administrator of Bank of America's DRiP plan holds shares purchased through the program in book-entry form by default. There is no charge for this safekeeping service and, in fact, if you currently hold physical stock certificates for Bank of America, you may deposit those certificates, free of charge, with the Plan Administrator for safekeeping.

If, however, you want the physical stock certificates delivered to you, the Plan Administrator requires that you request those certificates and will then mail them to you.

How to Get Started with BAC's DRiP

Non-shareholders

If you do not currently own shares in Bank of America, you have two options to get started:

  1. Direct Enrollment Option: As mentioned above, this option allows non-shareholders to make a minimum initial investment of $1,000 in shares of BAC, via the Plan Administrator. There is a one-time $10 enrollment fee for this option; however, many beginning DRiP investors find the minimum initial investment to be cost prohibitive.
  2. First Share Program for DRiP Investors: FirstShare.com can help you acquire one share of BAC through our program for DRiP investors. You can click here for more detail on how our program works. To summarize, however, you pay a referral fee to FirstShare.com and we then refer you to one of our experienced selling members who has agreed to sell one share of BAC to you. Our sellers will sometimes charge a minimal fee (~$7.50) to compensate them for postage and transfer fees. By purchasing the stock and paying the referral fees mentioned, you will become a registered shareholder in BAC stock and our sellers will help you get enrolled in the company's DRiP plan.

    We believe that our program is the cheapest way for beginning DRiP investors to get started investing in Bank of America's DRiP plan. The referral fee that you pay to have the share registered in your name is a one-time fee and will be the only fee you ever pay to invest in BAC stock as long as you participate in the company’s DRiP plan and as long as the company doesn’t change the terms of the Plan.


Bank of America DRiP Plan Prospectus