Dividend reinvestment plan


Dividend reinvestment plan

dividend reinvestment program or plan (DRIP) is an option offered to investors to receive their quaterly dividend directly reinvested into the company issuing the equity. This does not relive the investor of his obligation to pay his portion of the tax on the dividends received.

One of the many benefits is if you have invested a small amount of money you could reinvest your dividend without a fee. DRIPs can have fees although it is unusual.