An Introduction To Investment Accumulation Plans

by David Jenyns on October 8, 2008

Among the several services offered to investors by most holding companies, one of increasing popularity is the accumulation plan. Through the Monthly Investment Plan of the New York Stock Exchange, investors have a similar opportunity for accumulation of shares of a number of closed-end companies.


There are sound reasons for the increasing acceptance of accumulation plans. Naturally, this is most particularly true of the contractual plans. Basically, there are two types of accumulation plans voluntary and contractual. This plan is often known as a prepaid charge plan, penalty plan, or front-end load plan because the sales charge is deducted for the most part against payments made during the first year or two of the plan. Contractual plans are opened in much the same way, as are voluntary plans.

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