DRIP calculator: free dividend reinvestment calculator

What reinvesting actually changes

A dividend reinvestment plan, or DRIP, uses each payment to buy more of the same security. Take $10,000 at a 4% yield paid quarterly on a flat price. The first quarter pays $100, which buys 1% more shares, so the second pays $101. After a year you hold $10,406, where someone taking the cash holds $10,000 and $400. That $6 is the whole effect in year one.

The effect grows with time because it compounds. With no additions, flat prices and a flat 4% payment, after 20 years reinvesting gives about $22,167 on $10,000, against $10,000 in shares and $8,000 in cash. A rising price works against reinvesting a little, since each dollar buys fewer shares, and the table shows how much.

How this calculator compares the two paths

The "without DRIP" line adds cash collected to the value of the shares and assumes the cash earns nothing, so the difference is the extra from reinvesting and not a claim about what you would do with the money. Neither path includes taxes. The IRS treats reinvested dividends as income, so reinvesting doesn't avoid the bill in a taxable account.

To run this on a real holding, open its ticker page, which starts from that holding's recent payment rate. DRIP investing explained covers how plans work at brokers, and when to stop DRIPping covers switching to cash.