What is a Periodic Plan? A Comprehensive Legal Overview

Definition & Meaning

A periodic plan is a written agreement that allows a national bank to act on behalf of a customer to buy or sell specific securities at regular intervals. This plan specifies the amount of securities or funds involved, the timing of transactions, and the associated fees or commission rates. Common examples of periodic plans include dividend reinvestment plans, automatic investment plans, and employee stock purchase plans. Additionally, it includes automatic transfers of funds from a deposit account to purchase securities or redeem securities for deposit into an account.

Table of content

Legal Use & context

Periodic plans are primarily used in the banking and investment sectors. They are relevant in legal contexts involving securities transactions, investment management, and consumer finance. Users may encounter these plans when managing investments or participating in employer-sponsored stock purchase programs. With the right tools, such as US Legal Forms templates, individuals can manage these agreements effectively.

Key legal elements

Real-world examples

Here are a couple of examples of abatement:

Example 1: A customer enrolls in a dividend reinvestment plan, allowing their dividends from a stock to be automatically reinvested to purchase more shares at regular intervals.

Example 2: An employee participates in an automatic investment plan through their employer, where a portion of their paycheck is automatically invested in company stock every month (hypothetical example).

Comparison with related terms

Term	Definition	Key Differences
Automatic Investment Plan	A plan where funds are automatically invested in securities at regular intervals.	Focuses specifically on investment, while periodic plans can also include sales.
Dividend Reinvestment Plan	A plan that reinvests dividends to purchase additional shares.	Specifically related to dividends, whereas periodic plans cover broader transactions.

Common misunderstandings

What to do if this term applies to you

If you are considering a periodic plan, review the terms carefully to understand the fees and transaction details. You can explore US Legal Forms for templates that can help you set up or manage a periodic plan effectively. If your situation is complex or involves significant investments, consulting a financial advisor or legal professional may be advisable.

Find the legal form that fits your case

Browse our library of 85,000+ state-specific legal templates.

This field is required

Quick facts

Typical fees can vary based on the plan and institution.
Jurisdiction typically falls under federal banking regulations.
Possible penalties may include fees for early withdrawal or transaction failures.