Dividend Reinvestment Plan (DRIP)
A plan offered by a corporation that allows investors to reinvest their cash dividends by purchasing additional shares or fractional shares on the dividend payment date. Investopedia Says:
A DRIP is an excellent way to increase the value of your investment. Most DRIPs allow you to buy shares commission free and at a significant discount to the current share price. Most DRIPS don't allow reinvestments much lower than $10.
This term is sometimes abbreviated as "DRP". Related Terms:
Automatic Investment Plan
Compounding
Direct Stock Purchase Plan
Distribution Reinvestment
Dividend
Dividend Rollover Plan
Dollar-Cost Averaging - DCA
Fractional Share
Reinvestment |