Dividend Reinvestment Calculator (DRIP)
See how reinvesting dividends compounds your portfolio over time. Enter your initial investment, dividend yield, and growth rates to compare DRIP vs no-DRIP with a year-by-year projection. Free, no sign-up required.
The amount you invest initially in dividend-paying stocks or funds.
The annual dividend as a percentage of share price. S&P 500 average is ~1.5-2%; quality dividend stocks yield 2.5-5%.
Annual rate at which the dividend per share increases. Many Dividend Aristocrats raise dividends 5-10% per year.
Expected annual share price appreciation. S&P 500 historical average is ~10%; use 7% for a conservative estimate.
How long you plan to hold and reinvest dividends. Longer periods benefit more from compounding.
💰 Portfolio Value with DRIP
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Without DRIP
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DRIP Advantage
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Total Dividends
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Final Shares
Effective CAGR
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📊 Year-by-Year Projection
| Year | DRIP Value | No-DRIP Value | Dividends |
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DRIP value includes reinvested shares. No-DRIP value shows stock appreciation only (dividends taken as cash).
💡 What this means
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- Enter Initial Investment — the amount you plan to invest in dividend-paying stocks or funds.
- Enter Annual Dividend Yield — the current yield of the stock or fund (e.g., 3% means $300/year on a $10,000 investment).
- Enter Dividend Growth Rate — how much the dividend per share increases each year. Dividend Aristocrats typically grow dividends 5-10% annually.
- Enter Stock Price Growth Rate — the expected annual share price appreciation. Use 7% for a conservative estimate or 10% for the historical S&P 500 average.
- Enter Investment Period — how many years you plan to hold and reinvest dividends. Longer periods benefit more from the compounding snowball effect.
- Click Calculate — see your portfolio value with and without DRIP, total dividends received, final share count, effective CAGR, and a year-by-year comparison table.
📌 5 tips for DRIP investing
- ✓ Focus on dividend growth, not just yield. A 3% yield growing 8% per year will generate more income over 20 years than a 5% yield that never increases. Look for companies with a history of consistent dividend increases.
- ✓ Use DRIP in tax-advantaged accounts. In an IRA, 401(k), TFSA, or RRSP, reinvested dividends compound tax-free or tax-deferred. In a taxable account, you still owe taxes on dividends even when reinvested, which slows compounding.
- ✓ Be wary of yields above 6%. An unusually high yield often signals a falling stock price or an unsustainable payout ratio. Check the payout ratio (ideally 30-60%) and dividend coverage before investing.
- ✓ Patience is the real superpower. The DRIP advantage is modest in the first 5 years but accelerates dramatically after 10-15 years. The compounding snowball gets bigger with every year you stay invested.
- ✓ Diversify your dividend portfolio. Don't concentrate in one high-yield stock. A mix of Dividend Aristocrats across sectors (consumer staples, healthcare, utilities, financials) reduces risk while maintaining a reliable income stream.
Disclaimer: This calculator provides estimates for educational purposes only. It assumes constant growth rates, which do not reflect real-world market volatility. Dividends are not guaranteed and can be cut or suspended. Stock prices can decline, reducing both capital value and dividend yield. Past performance does not guarantee future results. Consult a financial advisor for professional investment guidance.
Related Tools
DRIP investing is one piece of your dividend and compounding toolkit. These six calculators cover the rest — from compound interest and CAGR to ROI, inflation-adjusted returns, investment fees, and retirement planning.
- Compound Interest Calculator — project how any investment grows with compounding at a known rate, the foundational concept behind DRIP's snowball effect.
- CAGR Calculator — calculate the compound annual growth rate of any investment, the natural companion to DRIP for measuring total portfolio performance.
- ROI Calculator — measure the total return on investment for any project or capital allocation, including dividend-focused portfolios.
- Investment Fee Calculator — see how management fees erode your DRIP returns over time. Even a 1% fee can reduce long-term compounding by 20%+.
- Retirement Savings Calculator — project your retirement nest egg using DRIP-style compounding assumptions for long-term dividend portfolio growth.
- Inflation Calculator — adjust your DRIP returns for inflation to see the real (inflation-adjusted) growth of your dividend portfolio.