Which Online Broker?

Filed under: Investing Strategies

I’m going to start doing a few definitions of key phrases as a lot of online brokers offer some pretty cool features that differentiate them from others (and you might not know about these!). One of these features is something called DRIP or “Dividend ReInvestment Plans”. Here is the definition:

A DRIP allows shareholders to automatically reinvest cash dividends and capital gains distributions without a broker and the fees they might charge.

So a specific online broker like Computershare might let you invest in certain companies it has deals with to offer DRIPs. For some real world examples of how this works I recommend reading the Sun’s Financial Diary. The post explains why and how he buys into a DRIP at the Bank of America. For even more info the 2MillionBlog has a number of posts on drips. Go here to view them all, he covers strategy, what online brokers sell them, and lots more. Great resource!

Trackback URL for this post: http://www.whichonlinebroker.org/blog/what-is-a-drip-dividend-reinvestment-plans/trackback/