Getting started with DRIPs and SPPs, Part -3

A DRIP Money TreeThe following is a guest post from one of my favourite bloggers, Mark at My Own Advisor.

 Welcome to Part-3 in a four-part series written by yours truly, Mark at My Own Advisor, on how to get started and then invest in Canadian dividend-paying stocks with DRIPs and SPPs. In Part-1 I answered the question, what is a DRIP and SPP? In Part-2
I then explained how you can I get started with full DRIPs.

In this post, Part-3 of Getting started with DRIPs and SPPs on the Dividend Ninja’s fine website, I’m going to continue sharing the process I followed to start DRIPping. This includes buying my first share via my discount brokerage account and ordering that stock in certificated form.  I look forward to sharing these details with you!

First, a quick recap…

In Part-2, I mentioned that you can get your first stock share from either another investor (option -1) or from a pooled-purchase/group buy (option -2) In that article, I chose Option 3 – Do-it-yourself via initial stock purchase in your own discount brokerage account.

I’m not against option 1 or 2 above but I started my own foray into DRIPping a few years ago with option -3, through my own brokerage account.  I felt it was safer (rightly or wrongly) because I was in control of all the transactions but more importantly I already had a discount brokerage account. Let’s follow, step-by-step the process I used.

Ordering your first share

Step #1 – From my previous post, research the stock you are buying!!

Step #2 – Open a Discount Brokerage Account and put money in it

(If you followed Option # 1 or # 2 above you don’t need to follow this step. )

TD Waterhouse, BMO InvestorLine, CIBC Investor’s Edge, RBC Direct Investing or Scotiabank’s iTRADE are all excellent candidates for that.  I would suggest any one of these guys since you could get that first stock share yourself, by placing a trade online.  Take your time, do your homework and get an online broker that is known for its good customer service and one you feel comfortable dealing with.  Ask people, get opinions from them; read reviews and recommendations online.

If you’ve chosen one of the big five banks for your discount brokerage account like I did, find out how to put some money into it.  I suggest putting at least a few hundred bucks in the account initially, if not closer to $1,000. Why?  Many big-bank discount brokerages charge you a fee if you don’t have a certain threshold of assets with them, let alone a certain threshold of money in this discount brokerage account itself.  I recall most big-bank brokerages want you to have about $10,000 in assets in this account, before any fees are waived.  CIBC Investor’s Edge charges something like $60 per year in fees, if you don’t keep a balance of $10,000 or more; same with RBC Direct Investing.  I’d call them to be sure of their fee structure.  I also recall some discount brokerage accounts like Scotia’s iTRADE might charge you inactivity fees if you don’t keep a certain balance.  All this to say, please find out what you’re opening.   Read the fine print.  Shop around.  It’s your money right!?

In my case, years ago, I had over $10,000 invested already with one of these big-banks, largely in mutual funds, so I just moved this account into a new discount brokerage account.   I was fortunate to be over this threshold at my discount broker a few years ago, so I avoided the fees.   Oh yeah, I don’t own  mutual funds anymore! J

Step #3 – Buy the stock through your Discount Brokerage Account

(If you followed Option # 1 or # 2 above you don’t need to follow this step. )

How many shares should you buy?   This depends on how much you can afford to spend really.   Assuming you have some money in your brokerage account to avoid those account fees I mentioned, you have some investing knowledge and you’re ready for direct stock ownership (lots of assumptions I know), most full DRIPs only need 1 share for starters.  Using Bank of Montreal again as my example (pic below), you’ll see only 1 share is required for the folks at Computershare to get you going.  I’d suggest before you make any transactions with your online discount broker, contact the friendly people at Computershare or Canadian Stock Transfer Company to confirm minimum purchase requirements. They’re there to help you.

Computershare BMO DRIP criteria

Getting Your Stock Certificate…

Step #4 – Order the stock you purchased in “Certificated Form”

(If you followed Option # 1 or # 2 above you don’t need to follow this step. )

So you’ve made the buy and now you own at least one if not a few shares of the company you want to DRIP in your brokerage account.   So far, so good!  Now, wait for the transaction to settle.  That usually takes 2-5 business days.  After this time period has passed, based on the number of shares required to start your full DRIP, you need to request your discount broker to issue you the certificate.  This certificate will be sent to you via postal mail.  In our example, since Computershare wants 1 share of Bank of Montreal stock to start the DRIP, order 1 share from your discount broker in “certificated form”.   You’ll probably have to call your discount broker to make this request.  I remember I had to.

Some notes about this process:

  • Ensure your discount broker prints the share certificate in the same name you want to register your share with the transfer agent.  It just keeps things simple.
  • Ensure the broker sends the share certificate to the correct address.   You don’t want this certificate going somewhere else!?
  • Know that you’ll need to pay money for the share to be made in “certificated form”.   Big-bank discount brokers usually charge a fee of about $50 plus taxes or HST.  Some online discount brokers, so I’ve heard, charge much more.
  • Expect the certificate to take 2 or 3 weeks to arrive in the mail.

If you didn’t buy the share certificate from your discount brokerage account but instead got it transferred to you from someone you know, or from a Share Exchange Board, then you should have in your hot little hands, something that looks like this – a share certificate with your name on it:

Share Certificate

Whenever you get this share certificate, be careful with it.  Don’t use this certificate as a placemat or treat it like an older newspaper.  It’s worth money!   What you have done is take the stock the seller owned or you owned in your discount brokerage account, from its “street form” to full ownership under your own name.   So, when you get the share in “certificated form” ensure your name and address is accurate on it!

In Part-4, I’ll continue this series and close it with my final post, how I registered the share certificate with the transfer agent and began Dripping! 🙂

So readers, 3 articles down and 1 to go… What are your thoughts about DRIPs with SPPs?   Are you considering this process?

Mark is a 30-something DIY investor who is passionate about indexing and dividend investing, using this two-pronged approach as he marches towards financial freedom.  Over the last year, Mark’s articles have caught the attention of both The Globe and Mail and The Toronto Star.  You can follow Mark on his wealth building journey via his blog at My Own Advisor and on Twitter.

17 Responses to “Getting started with DRIPs and SPPs, Part -3”

  1. beaver

    Nov 18. 2011

    $50 to get one certificate,if i want to drip 30 stocks, does that mean i have to pay 1500 bucks fee to get start? sounds so pricy.

    • The Dividend Ninja

      Nov 19. 2011

      Hey beaver no it doesn’t work that way LOL. You only need to buy your first share – you can buy one share or ten shares to begin with. You then order your share certificate, a one-time $50 cost.

      Once you have your share(s) you then register it with the Transfer Agent (i.e. computershare) and sign up for the DRIP (dividend reinvestment plan) and the SPP (Share Purchase Plan).

      Mark will cover enroling in the SPP and DRIP plans, and then registering the share certificate in Part-4.

      One you are enrolled in SPP and DRIP you can then add shares as you want to at no additional cost, and also reinvest partial dividends! So the share certificate is only a one-time cost.

      Got it?

    • Maritime

      Dec 31. 2011

      If you want to get DRIP 30 different companies than I believe you would pay $50 dollars each for the each company to be registered in your name.

      To avoid this fee for each company, try to buy a share of each directly without a broker.

  2. My Own Advisor

    Nov 19. 2011

    You got it Ninja!

    Good question though beaver.

    Now beaver, if you wanted to DRIP 30 different stocks, well, then yes that would cost you money, your $1500 actually.

  3. René

    Nov 20. 2011


    Greetings from Germany.

    The website is very interesting and helpful for people, which have the wish for financial independence! I have a website in Germany with the articles over stocks with monthly payments. I think its fine to learn together.

    Many thanks for the informations. René Schmidt

    • The Dividend Ninja

      Nov 21. 2011

      Rene thank you for dropping by, nice to know the blog is read and appreciated in Germany 🙂

  4. beaver

    Nov 21. 2011

    thanks for the explains.

    If I choose option #1, after paying the share price + $10 fee charged by investors, any other fee? does this option avoid the $50 fee charged by brokerage?

    • The Dividend Ninja

      Nov 21. 2011

      Hi beaver! Yes that is exactly right 🙂

      If buy your first share certificate from someone you know, or from a share-board, then you only need to pay the $10 gratuity (that’s the usual); instead of the $50 brokerage certificate fee. It’s obviously a cheaper way to go, but you have to make sure the seller on the share-board has a good reputation, before you buy. Going through your brokerage is more expensive, but safer.

      There are no additional fees, unless the company specifies. You need to view the company DRIP and SPP plan on the Transfer Agent website (like computershare) to verify. But in the long run, the fees may be quite nominal.


  5. Lauri

    Feb 17. 2012

    Looking for part 4! Can’t seem to find it

  6. Marco

    Oct 27. 2012

    Hi Ninja,

    After contacting my discount broker (TD Waterhouse) they told me they dont ofter certificates in paper form. Is there another way to acquire that first share through my broker.

    Thanks so much

    • The Dividend Ninja

      Oct 27. 2012

      Marco, I do not believe you were given correct information, as paper stock certifiactes are available at $50. You simply phone and request that x no. of shares stock abc is made in certificate form, and they will mail the certificate to you.

      Let me know if you have any problems, and I’ll take it higher up at TDW. 🙂


  7. Dan

    Feb 10. 2013

    I have a itrade tfsa (tax free savings account) I have some BNS bank of nova scotia stoxk I would like to drip and spp. Can i do this in a tfsa. Once i get a share certificate and register drip and spp is this contained in my itrade account or a different account? Dan

    • The Dividend Ninja

      Feb 10. 2013

      Hi Dan,

      It’s important to understand the two different type of DRIPs. There is a “synthetic” DRIP through discount brokers, such as TD Waterhouse and Questrade etc. You have to have enough dividend income to reinvest at least one full share, you can’t do partial shares. A “full” DRIP is done through ComputerShare directly. You can invest in partial shares through their DRIP and SPP programs. The series was just pointing out that Mark, obtained his share from TDW, then used that share to enrol in the DRIP program with Computershare.

      No you cannot do a “full” DRIP in a TFSA or RRSP. You need to have the DRIP program through ComputerShare to do a “full” DRIP.

      However, two considerations come to mind. First, Questrade may have a hefty fee to issude a share certificate. And second, they may have a fee for anything withdrawn from your TFSA. This wouldn’t be a good way to go at all. You’ll have to phone Questrade and ask them about the cost and fees. 😉

      You would be much better off getting the share from a Share Club. Here is the difinitive site on Canadian DRIPs. It will probably answer most of your questions:


  8. Mike

    Apr 01. 2013

    If I hold a few hundred shares in a company and want to enroll in a DRIP, what is the process for ordering the shares in certified form? Won’t I need to convert all of the shares into certified form (not just one)? Will the discount brokerage charge more for this or will my holdings all be reflected on one certificate?

    Is the one share that is frequently referred merely to establish membership in the DRIP and enable practical additional purchases should the company offer a SPP?

  9. The Dividend Ninja

    Apr 02. 2013


    If you have enough dividend income to DRIP one full share, then your cheapest option is to keep your stock with your discount broker and DRIP it with them. That is called a “Synthetic DRIP”. You will only be able to DRIP full shares.

    There is a charge to issue a share-certificate from your discount broker, usually around $50.You can issue one or as many shares as you wish on that certificate. Or better yet you can get it from a “share board” for $10 plus share price. 😉

    That is correct, you only need one share to enrol in both the DRIP and SPP with a transfer agent such as Computershare.



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