DRIP Dividend Reinvestment Plan

A Dividend Reinvestment Plan (DRIP) allows you to automatically reinvest your cash dividends to purchase additional shares or fund units of the company that paid you those dividends.

Any cash dividends you earn will automatically be reinvested with no commissions to buy more shares or units of that stock or fund.

• Automatic Reinvestment: With a DRIP, your dividends are automatically reinvested, eliminating the need to place orders manually. This "set it and forget it" approach ensures that your dividends are consistently working for you, and that your cash doesn’t sit idle.
• Compounding Growth: By continuously reinvesting dividends, you can take advantage of compounding growth, potentially increasing your returns over the long term.

When you set up a DRIP, Questrade will use your cash dividends to purchase shares based on the current market price. If you hold fractional shares, DRIP will spend your entire dividend on fractional shares. If you do not hold fractional shares, DRIP will purchase whole shares and deposit any leftover cash into your account.

For example: You own 100.5 shares of ABC Company that have paid you $110 in dividends. If ABC trades at $25 per share, Questrade will purchase 4.4 additional shares.

If you do not own fractional shares of ABC company and that $110 dividend is coming from 100 shares, Questrade will purchase 4 additional shares for $100, with $10 remaining as cash in your account.

Important note: If you do not own fractional shares and ABC Company pays you dividends again in the future, your $10 remaining from the earlier DRIP would not be added to the new amount. Leftover DRIP amounts will remain in your cash balances, and do not accumulate towards new DRIPs.

Setting up DRIP for your accounts is an easy, online process.

1. Log in to Questrade on a web browser.
2. Go to Management > Dividend Reinvestments
3. Click the toggle to opt yourself in.

That’s it. Once you register, all of the eligible positions in all of your accounts will be enrolled in 2 business days.

Any new dividend-paying securities you acquire will also be automatically enrolled (up to 48 hours after the trade settles).

And if your strategy changes, you can easily exclude specific securities or entire accounts at any time.

Sometimes, your dividends might not be reinvested due to:

Enrollment Timing: If your DRIP opt-in is processed after the ex-dividend date, the upcoming dividend will not be reinvested, but future dividends will be. (Processing takes 2 business days after you opt-in)

Note: The information in this blog is for educational purposes only and should not be used or construed as financial or investment advice by any individual. Information obtained from third parties is believed to be reliable, but no representations or warranty, expressed or implied, is made by Questrade, Inc., its affiliates or any other person to its accuracy.