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Finance Dictionary and Glossary of Investment Terms
Direct Purchase Plan
Definition 1.
A direct purchase plan (DPP) allows you to buy stock directly from the company itself, without paying a broker''s sales commission. Importantly, you can buy the stock direct even if you are not a current shareholder. This distinguishes DPPs from company-operated dividend reinvestment plans (DRIPs), which usually require that you buy at least one share through a broker or other service and pay a commission that can easily top $20.Of all the different ways to invest in the stock market, buying shares through a direct purchase plan (DPP) requires the least amount of cash. Some companies that offer a direct purchase plan charge a $5 to $20 enrollment fee. About 130 companies sell their shares through DPPs, but that number is expected to double within a year or two.
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