Mar
19
What is a Dividend Reinvestment Program?
Category: General | 
A dividend reinvestment program or DRIP is an option of investment equity offered by a company in which the shares or stocks are contained. Investors are paid dividends by having the dividends reinvested back into the equity. However, despite the reinvestment and no cash being received annually as normal dividends would be paid, the investor is still responsible for all annual taxes on the dividend amounts earned, whether reinvested or received. The advantages are that there are no brokerage fees, waits for cash accumulations, no commissions paid out, no other additional charges, compounded earnings and better pricing appreciation. In fact, investors can buy additional company stock with the dividend earnings.
