Dividend Reinvestment Plan - DRIP

Dividend Reinvestment Plan - DRIP

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

Notes:

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

Sometimes this is abbreviated as "DRP."

See also: Automatic Investment Plan, Compounding, Direct Stock Purchase Plan, Dividend, DCA, Reinvestment