Free Calculator
DRIP Calculator
Estimate how dividend reinvestment, monthly contributions, and compounding may affect your portfolio. Compare your projected value with and without reinvesting dividends to understand the long-term impact of a DRIP strategy.
Your inputs
Enter your investment details to model DRIP growth.
Growth over time
Projected value each year — with DRIP, without DRIP plus cash dividends, and what you put in.
View yearly projection
| Year | Contributions | With DRIP | Without DRIP | Cash dividends | Annual income (DRIP) |
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Want a projection using your actual holdings?
The Portfolio Forecast models your real portfolio with dividend growth, taxes, inflation, market events, withdrawal goals, and Monte Carlo outcomes — the full version of what this calculator estimates.
Assumptions used
The calculator simulates month by month. Contributions are added at the start of each month, dividends land on payment months (based on the selected frequency) on the portfolio value at that point, and share-price growth compounds monthly. In the DRIP scenario dividends immediately buy fractional shares; in the cash scenario they accumulate separately.
- The dividend yield stays constant — dividends per share grow with the share price.
- Cash dividends (without DRIP) earn 0% while accumulated.
- Fractional shares are allowed; reinvestment has no fees.
- Price growth excludes dividends and compounds each period.
- Taxes, fees, and inflation are excluded. In a taxable account, reinvested dividends are generally still taxable income.
- Results are in nominal (future) dollars.
Understanding DRIP
A Dividend Reinvestment Plan (DRIP) automatically uses your dividend payments to purchase additional shares instead of paying out cash. This creates a compounding effect where your reinvested dividends generate their own dividends, accelerating portfolio growth over time. The longer your investment horizon, the more powerful this snowball effect becomes. Many brokerages offer commission-free DRIP programs, and some companies even offer discounted share purchases through their direct DRIP programs.
DRIP vs. taking dividends in cash
Reinvesting usually ends ahead when prices are flat or rising, because each reinvested dividend buys shares that produce their own dividends. When prices decline over the whole period, reinvesting can end behind taking cash — the reinvested shares keep falling while cash holds its value. The comparison here assumes the cash earns nothing; parking it in an interest-bearing account would narrow the gap.
Does DRIP avoid dividend taxes?
No. In a taxable account, dividends are generally taxable in the year received even when automatically reinvested. This calculator excludes taxes, so treat results as a pre-tax comparison.
Does payment frequency matter?
Modestly, and in both directions. For a lump sum, more frequent payments reinvest sooner and compound slightly harder. With ongoing contributions the effect can reverse a little, because with a less frequent payer each new contribution still collects the full period’s dividend at the next payment. Either way, yield and growth assumptions matter far more than frequency.
