Dividend Reinvestment Plan - DRIP

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DEFINITION of 'Dividend Reinvestment Plan - DRIP'

A plan offered by a corporation that allows investors to reinvest their cash dividends by purchasing additional shares or fractional shares on the dividend payment date.

INVESTOPEDIA EXPLAINS 'Dividend Reinvestment Plan - DRIP'

A DRIP is an excellent way to increase the value of your investment. Most DRIPs allow you to buy shares commission free and at a significant discount to the current share price. Most DRIPS don't allow reinvestments much lower than $10.

This term is sometimes abbreviated as "DRP".

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  3. What's the smallest number of shares of stock that I can buy?

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  4. How can I purchase stocks directly from a company?

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  5. What effect does a company's dividend reinvestment plan have on its stock price?

    When a dividend is received, an investor has two options: to keep the proceeds in a bank account or reinvest them. For the ... Read Full Answer >>
  6. What is a DRIP?

    The word "DRIP" is an acronym for "dividend reinvestment plan", but "DRIP" also happens to describe the way the plan works. ... Read Full Answer >>
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