Equity

Dividend Reinvestment Plan (DRIP)

Definition

A program that allows investors to automatically reinvest cash dividends into additional shares of the same stock, often commission-free, enabling compounding growth.

Example
DRIP enables compounding by purchasing fractional shares with each dividend payment.
Related Terms
Dividend Dividend Aristocrat Dividend Yield
Frequently Asked Question
What is a DRIP?
A DRIP (Dividend Reinvestment Plan) allows investors to automatically reinvest cash dividends into additional shares of the same stock, typically commission-free, enabling compounding returns.
APA Citation
Clark, R. (2025). Dividend Reinvestment Plan (DRIP). VixShield Trading Glossary. Retrieved from https://www.vixshield.com/glossary/drip
RC
Russell Clark, FNP-C
Author of SPX Mastery series · Founder of VixShield
Last updated:  ·  Source: VixShield Trading Glossary — From SPX Mastery by Russell Clark
⚠️ Not financial advice. This definition is educational content from the SPX Mastery book series by Russell Clark (VixShield). Past performance is not indicative of future results. Trading options involves substantial risk of loss and is not appropriate for all investors. Always paper trade before risking real capital.