What is drip and how do i know if that stock, etf, or mutual fund is drip or not?

i have an account with scottrade and someone here on this forum said scottrade has drip. and how do i know the stocks, etf, or mutual funds has drip or not? thx in advance.

i own some stocksl ike exxom, franklin templeton, some ishares..how do i know they are drip or not?

DRIP stand for Dividend Reinvestment Plan. DRIPs were popular in the 90s but have not heard much about them in recent years. Basically, dividends company pays to investor is used to purchase shares and you basically reinvest the funds to purchase stock. Papermoney has list of all DRIPs available and I have put the link below.

I checked Scottrade site and according to them:

Stock Dividend Reinvestment

Scottrade does not currently offer dividend reinvestment as an account option.

Cash dividends which are paid to your account are automatically swept into an interest bearing cash account.

You have the option to have the cash dividends mailed from your account. Dividends are mailed twice monthly.

Please contact your local Scottrade branch office to request this option

If you wish to participate in a dividend reinvestment program, you would need to sign up directly through the transfer agent of the company in which you own stock

You will need to hold the physical stock certificate in order to participate in the program

To request a certification be mailed to you, please contact your local Scottrade Branch Office.

Scottrade or Sharebuilder do not have drips.

what they have are 'pseudo drips' ...to functionally get the same goal... however they are not true drip therefore some of the advantgages of dripping is not available to u. Report It

I do all my normal investing via Edwardjones (litterally free in my case) ...and do dripping directly with the companies thru moneypaper.com (its temper service).. Report It

The ultimate goal with any drip is to avoid as much of the fees as possible.

I drip like crazy and other than the 1st share.have paid zero in fees or commission in 5 years Report It

My best friend and i have been doing the exact same investing for 8 years... Yet I now have $100k more than he because I had no fees & costs, while he has had too much.

$25k of my additional is what would have been fees... Report It

If you own dividend paying stocks and you don't need the dividend cash in the near term, then a dividend re-investment program or DRIP is a great option. Your returns over the long term will be much better.

There are two basic ways to do it. One way is to send your money directly to the company whose stock shares you are buying. The company then sells its shares to you at zero commission and then holds the shares for you. Then when they pay out the dividend, they give you more shares instead of cash, also with zero commission. Many companies do this, but many do not.

I know of one company "American Capital Strategies" that has a high dividend (7.7%) and if they hold your shares they will give you a bonus DRIP. You will receive 5% more shares in their DRIP than the regular dividend would have produced.

The second way is to use a broker like ETrade or TD Ameritrade. Once you've bought a stock, you can enroll the holding in a DRIP. Then when the dividend cash arrives in your account ETrade will automatically trade the cash for more shares at zero commission. The zero commission detail is very important. Otherwise the fees eat up the value of the dividend payout.