Introduction to Dividend Reinvestment

Dividend reinvestment is a systematic method of accumulating shares of a stock that pays a dividend. With a dividend reinvestment program you automatically purchase shares each time that you receive a dividend. Over many years shares add up and increase your returns without laying out new money.

Because you pay taxes on dividends, consider putting dividend reinvestment stocks in a retirement account so you can shelter the dividends from your current tax liability.


Setting up Your Dividend Reinvestment Account

Here are six ways to reinvest dividends:

Always inquire about the fees associated with reinvesting dividends because some plans charge hefty fees. Remember that any fee, no matter the amount, reduces your returns.


Related Calculator and Articles

Dividend Reinvestment Calculator

Introduction to Dollar-cost Averaging

Introduction to Stock Portfolio Diversification