Most brokers let you enable Dividend Reinvestment (DRIP) in under a minute — but the toggle is hidden in a different place at each one. Here is where to look.
Why You Want DRIP On
A dividend hitting your account as cash is a decision: do you reinvest? buy something else? leave it? Enabling DRIP removes the decision and lets compounding work uninterrupted. Our DRIP Calculator shows the long-term gap vs taking cash.
Fidelity
- Sign in to Fidelity.com.
- Go to Accounts & Trade → Account Features → Dividends and Capital Gains.
- Select Update next to each position (or the whole account).
- Choose Reinvest in Security.
Charles Schwab
- Sign in.
- Service → Account Settings → Dividend Reinvestment.
- Toggle on per-position or for all eligible holdings.
Vanguard
- Sign in.
- My Accounts → Account Maintenance → Dividends and Capital Gains.
- Switch each holding to Reinvest.
Robinhood
- Open the app.
- Profile → Investing.
- Tap Dividend Reinvestment and toggle on.
What Happens Next
The next time the security pays a dividend, the broker buys whole and fractional shares at that day's price. Each reinvestment creates a new tax lot — track them in our Stock Cost Basis Calculator if you ever need to verify.
Important Caveats
- DRIP only works on stocks and ETFs that pay dividends.
- Inside a taxable account, reinvested dividends are still taxed in the year received.
- For mutual funds, dividends and capital gains distributions are usually reinvested by default.
Bottom Line
Turn DRIP on for every dividend-paying position you intend to hold long-term. Then forget about it.
Frequently Asked Questions
Why should I turn on dividend reinvestment (DRIP) for my portfolio?
Enabling DRIP removes the need to decide what to do with each cash dividend payment and instead automatically uses it to buy more shares, including fractional shares, of the same stock, letting compounding continue uninterrupted. Over 20–30 year periods, the long-term gap between reinvesting and simply taking dividends as cash can be substantial. It's a low-effort way to keep a long-term dividend strategy running automatically.
How do I turn on DRIP at major brokers like Fidelity, Schwab, or Vanguard?
Each broker hides the setting in a slightly different menu — for example, Fidelity's is under Accounts & Trade → Account Features → Dividends and Capital Gains, Schwab's is under Service → Account Settings → Dividend Reinvestment, and Vanguard's is under My Accounts → Account Maintenance → Dividends and Capital Gains. Robinhood offers a similar toggle under Profile → Investing → Dividend Reinvestment. If you can't find the setting, your broker's help center or customer support is generally the fastest way to locate it.
Does DRIP work on every stock or fund I own?
No — DRIP only applies to positions that actually pay dividends, so stocks or funds that don't distribute dividends have nothing to reinvest. For mutual funds, dividend and capital-gains distributions are commonly reinvested by default even without turning on a special toggle. It's worth checking your specific holdings and account settings to confirm reinvestment is active where you want it.
Run the numbers yourself
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