Dividend Reinvestment Plan - DRIP


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.


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BREAKING DOWN '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".

  1. Dividend

    A distribution of a portion of a company's earnings, decided ...
  2. Treasury DRIP

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  3. Systematic Investment Plan - SIP

    This is a plan where investors make regular, equal payments into ...
  4. Automatic Investment Plan - AIP

    An investment program that allows investors to contribute small ...
  5. Reinvestment

    Using dividends, interest and capital gains earned in an investment ...
  6. Direct Stock Purchase Plan - DSPP

    An investment service that allows individuals to purchase a stock ...
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  2. How are dividends usually paid out?

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

    There are a few circumstances in which a person can buy stock directly from a company. The following is meant to cover some ... Read Full Answer >>
  4. Is a Canadian resident allowed to participate in a direct stock purchase plan from ...

    There is no law that prevents Canadians from participating in direct stock purchase plans offered by U.S. companies. There ... Read Full Answer >>
  5. What effect does a company's dividend reinvestment plan have on its stock price?

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

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  7. What is a DRIP?

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