Dividend Reinvestment Calculator
Project how a DRIP compounds your shares, dividend income and portfolio value, and see exactly how much more reinvesting earns than taking the cash.
Real-World Scenarios
The Holding
What you are buying, and what it pays today.
Growth Assumptions
How fast the share price and the dividend rise each year.
Plan Settings
How often dividends arrive, plus anything you add or lose to tax.
Projections assume steady growth rates and that every dividend is reinvested at the prevailing share price. Real dividends get cut and real share prices do not rise smoothly. For planning and education, not investment advice.
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DRIP Calculator: See Your Dividend Snowball
A dividend reinvestment plan (DRIP) uses each dividend to buy more shares instead of paying you cash. Those extra shares earn dividends of their own, which buy more shares again — the compounding effect income investors call the dividend snowball. This calculator runs both paths side by side, payment by payment, so you can see the portfolio value, the share count and the annual dividend income you would end up with either way.
What is dividend reinvestment (DRIP)?
Dividend reinvestment automatically converts every dividend payment into additional shares, including fractional shares, at the price prevailing on the pay date. Because most US companies pay quarterly and many REITs and funds pay monthly, the reinvestment happens four or twelve times a year rather than once — and each purchase is made at whatever the share price happens to be, not at a year-end average. Over long horizons the share count itself compounds, which is why a reinvested position pulls away from an identical position whose dividends were spent.
Share accumulation per payment
Shares(k+1) = Shares(k) + (Shares(k) × Dividend per Payment) ÷ Share Price(k)How to use this DRIP calculator
Enter your initial investment and the current share price — together these set your starting share count.
Enter the annual dividend yield the stock or fund pays today.
Set how many years you want to project.
Add your growth assumptions: how fast you expect the share price to rise, and how fast the dividend itself grows.
Choose the dividend frequency — quarterly for most US stocks, monthly for many REITs and income funds.
Optionally add an annual contribution and a dividend tax rate, then compare the reinvesting and cash paths in the chart and the year-by-year table.
When this calculator helps
Deciding whether to switch DRIP on
Your broker offers automatic reinvestment on a holding and you want to see, in dollars, what turning it on is worth over your actual holding period.
Planning a dividend snowball
You are building an income portfolio and want to know when reinvested dividends start contributing more than your own contributions.
Comparing yield against dividend growth
A 6% yield that never rises against a 2% yield growing 8% a year is a genuine trade-off. Run both and see where the crossover falls for your time horizon.
Valuing tax-advantaged space
Compare the same holding at a 0% dividend tax rate and at your real effective rate to see what an IRA or 401(k) saves you over decades.
Why use a DRIP calculator?
See the gap, not just the total
The number that matters is the difference between reinvesting and not reinvesting. This calculator reports both ending values and the gap between them, so the decision is explicit rather than implied.
Payment frequency is modelled properly
Quarterly and monthly plans buy shares at four or twelve different prices a year. Calculators that lump the whole dividend into one year-end purchase understate the share count — this one does not.
Income, not just capital
Income investors care what the position pays. You get the forward annual dividend, the amount per payment and the yield on cost against every dollar you invested.
Tax drag where it applies
Reinvested dividends are still taxable in a brokerage account. Setting an effective rate withholds tax before the shares are bought, so you can see what tax-advantaged space is actually worth.
Frequently asked questions
A dividend reinvestment plan automatically uses your cash dividends to buy more shares of the same holding, usually commission-free and including fractional shares. Most brokers offer it as a per-holding toggle; some companies run their own plans directly.
For long horizons in a rising market, reinvesting almost always ends with more value, because the extra shares earn dividends of their own. It is not automatic, though: if the share price is flat, reinvesting and banking the cash end up identical, and if the price falls, reinvesting buys into the decline. What reinvesting definitely costs you is the income — you cannot spend a dividend you turned into shares.
Yes, modestly but consistently. A quarterly plan buys at four prices a year rather than one, and in a rising market those earlier purchases are cheaper. Switching this calculator from annual to monthly on the same inputs raises the ending share count — the effect compounds over decades.
In a taxable brokerage account, yes. The IRS treats a reinvested dividend as received and then invested, so it is taxable in the year it is paid even though no cash reached you. It also adds to your cost basis, which reduces capital gains later. Inside an IRA or 401(k) there is no annual tax, which is why the reinvestment rate is set to zero for those accounts here.
Yield on cost is the dividend income a position now pays, divided by what you originally invested in it, rather than by what the shares are worth today. It rises over time as the dividend grows and as reinvestment adds shares, which is why a long-held dividend grower can pay double-digit yield on cost while its market yield stays near 2%.
Without fractional shares a $40 dividend cannot buy a $250 share, and the leftover cash sits idle until it accumulates. Nearly all modern DRIPs buy fractions, which is what lets the compounding run smoothly. This calculator assumes fractional shares throughout.
It assumes constant growth rates, no dividend cuts, no brokerage fees and no share price volatility. Real returns arrive unevenly, and sequence matters. Treat the output as the shape of the outcome under your assumptions, not a forecast.