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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.
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/transactionMaximum OCP Investment: $120,000/yearPurchases 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.
How to Get Started with BAC's DRiP Non-shareholdersIf you do not currently own shares in Bank of America, you have two options to get started: