What Is a Recurring Buy?

How Do Recurring Buys Work?

A recurring buy enables you to set aside funds for programmed asset purchases, including crypto or stocks. You choose an amount and frequency that works for you — daily, weekly, or monthly, for example — and instruct your broker or exchange to execute an automated order for whatever you’ve specified. When it’s time for your scheduled investment, the exchange will purchase the asset for you at the agreed-upon price. The purchase will continue automatically until you cancel the service.

What You Need To Know

It’s important to review your chosen exchange’s policies on recurring buys carefully, as each has its own regulations. Of course, you’ll also need to make sure that your account is funded. Some exchanges will automatically deduct funds from your linked bank account to make the purchase, but you may miss out on a good price while waiting for funds to clear. If you’re buying crypto via an Automated Clearing House (ACH), be aware that some firms require as much as a 10-day hold on the order until the USD value of your purchased crypto is available to withdraw. If you’re paying with a debit card, the holding period until clearance is usually just a few days. Some exchanges, however, will not accept debit cards.

Exchanges offer different options for setting up and managing recurring buys and might also have different limits on how many recurring purchases you can make per month. Moreover, not all cryptocurrencies at all exchanges may be eligible for a recurring buy, and an exchange may impose a minimum trading limit. So read the fine print; you don’t want to miss these critical details.

If you are practicing a dollar-cost averaging (DCA) investment strategy, you may want to consider setting up a recurring buy. This will ensure that you don’t forget to make your planned purchases or are tempted to try to time the markets. Much like signing up for automatic bill pay, many DCA investors appreciate the simplicity of arranging a recurring buy and watching their portfolio grow.

Can Recurring Buys Translate to Crypto?

As with any concept that’s been borrowed from another industry, the efficacy and popularity of recurring buys in the crypto space remains to be seen. What worked for electronic retailing (e-tailing) may or may not work for purchasing cryptocurrencies. Clearly, recurring buys would benefit brokers and exchanges, but is the service right for crypto customers?

It’s true that taking small, incremental steps toward amassing wealth can add up to big results over time. Investors who know which cryptocurrencies they want to accumulate, or who don’t have a lot of money to invest up front, might appreciate the recurring buy model. Some believe that recurring purchases help them accumulate digital assets more easily with fewer mistakes, especially if they are novice crypto investors. Others who would rather not deal with the hassle of tracking tumultuous market fluctuations might opt for recurring buys because of their convenience.

Make sure you carefully consider your financial goals, risk appetite, and comfort with trading before considering recurring buys. And, always review the details around recurring buys wherever you decide to trade.