Best Brokers for Dividend (DRIP) Investing [2023]

Dividend reinvestment plans at the best online brokerage companies: Fidelity, TD Ameritrade, Ally Invest, Merrill Edge, Etrade, Charles Schwab, Firstrade, Vanguard and others.

Firstrade - Best Broker For DRIPs

Investors at Firstrade have access to a free Dividend Reinvestment Plan (DRIP) that will convert cash distributions into additional shares of the securities that pay them. One stock or ETF can be enrolled, or an entire account. There is no charge to sign up, and even better, the broker-dealer does not charge any commissions when additional shares are purchased with dividends.

A stock or ETF must have a market price of $4.00 or higher to be eligible for Firstrade’s DRIP. The security must also be marginable. This means it must be eligible to be borrowed. Not all securities are marginable. For example, recent IPO’s and Bulletin Board stocks aren’t marginable under U.S. securities regulations.

Some foreign stocks are eligible for Firstrade’s DRIP. In order to receive shares of the security instead of cash, the equity must be purchased and the trade settled by the record date of the dividend.

Because of good DRIP policy and $0-commissions on almost all investment products, Firstrade is rated the Best Broker For Dividend Reinvestment Plan in 2023.

Fractional shares: Yes.

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M1 Finance - Best Broker For DRIPs

Instead of a Dividend Reinvestment Plan, M1 Finance offers something called auto-invest. With this system, once an account’s cash balance reaches $10, the free cash balance is automatically invested in Pies.

M1 Finance DRIP

A Pie is a basket of investments, either stocks or ETF’s or a combination. M1 creates its own Pies, and customers of the broker can create their own. When cash is invested in a Pie, either from a dividend or a deposit, the funds are allocated to target percentages.

For example, say a Pie had 20% invested in ExxonMobil, 50% in an S&P 500 ETF, and the last 30% invested in Facebook. A $100 cash deposit would be invested at those ratios—$20 in XOM, $50 in SPY, and $30 in FB.

Because M1’s Pies invest in fractional shares of securities, it’s possible to invest whole-dollar amounts in stocks and funds.

Because of good DRIP policy and $0-commissions on almost all investment products, M1 Finance is rated the Best Broker For Dividend Reinvestment Plan in 2023.

Fractional shares: Yes.

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TD Ameritrade Dividend Reinvestment Program

Investors at TD Ameritrade can sign up for the broker’s Dividend Reinvestment Plan, also known as DRIP. There is no charge for this service, and it can be used for stocks, exchange-traded funds, and many American Depository Receipts (ADR’s).

To sign up for the broker’s DRIP service, click on ‘My Account’ at the top of the TD Ameritrade website. In the drop-down menu that appears, select ‘Dividend Reinvestment.’ Here, you will find helpful information on reinvesting cash dividends.

Fractional shares: Yes.

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Charles Schwab Dividend Reinvestment Plan

Charles Schwab traders can have stock and mutual fund dividends reinvested into the securities themselves, instead of receiving cash payments. A helpful page on the broker’s DRIP service is available on the website. It can be located by typing in “dividend reinvestment” in the search field that appears in the upper-right of the site. The page can also be found by selecting “Products” in the top menu, and then choosing “Stocks”. A page entitled “Dividend Reinvestment” will then appear in the left-hand column.

This area describes the broker’s dividend reinvestment plan, or DRIP. The broker does offer the service for ETF’s too. And of course, distributions from mutual funds can be rolled back into the fund as shares, instead of deposited into the account’s core position as cash.

Fractional shares: Yes.

E*Trade Dividend Reinvestment Plan

E*Trade’s DRIP service has a few policies. First, a security must have a market price of $5 or higher to be enrolled. Of course, the stock or ETF must be in an E*Trade brokerage account, and it must also be currently paying a dividend.

To enroll an equity in the broker’s DRIP service, you must submit a form. This can be downloaded as a pdf document; alternatively, E*Trade offers it as an on-line form. To locate it, you can go to us.etrade.com/forms-applications without logging in. If you’re logged in, just point your browser to ‘Account’ and then select ‘Documents.’ Next, scroll down to ‘Deposits and Withdrawals’ and choose ‘More.’ Finally, there will be a DRIP enrollment form, which will also allow you to unenroll if you wish. The form is available in both hard-copy and electronic forms. It takes the broker up to five business days to complete an enrollment.

Fractional shares: Yes.

Fidelity Investing DRIP

Fidelity offers dividend reinvestment plans for both securities (stocks and ETFs) and mutual funds. At the broker approximately 6,000 securities are eligible for DRIPs.

Mutual fund dividends default setting is to reinvest unless a customer changes it. Stock dividends are set by default to pay into customer cash.

Fractional shares: Yes.

Merrill Edge/Lynch DRIP

For stocks and ETFs, investors can reinvest dividends and capital gains or receive cash. For mutual funds, investors can reinvest dividends and capital gains or reinvest capital gains only. Or, investors can elect to receive cash payments.

To enroll, contact a Merrill Edge Investment Center representative.

Fractional shares: Yes.

JP Morgan Dividend Reinvestment Plan

Chase's J.P. Morgan offers a Dividend Reinvesting free of charge. It can be used to reinvest cash distributions as additional shares in ETF’s and stocks. Penny stocks are not eligible because Chase does not allow the trading of them.

There is no minimum price that a ETF or stock must be trading at to be eligible for the DRIP service; although esoteric equities may also have some exceptions.

Fractional shares: Yes.

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T. Rowe Price Dividend Reinvestment Plan

Most securities listed on the New York Stock Exchange or the American Stock Exchange or traded on the National Association of Securities Dealers Automated Quotation (NASDAQ) system are eligible for the Dividend Reinvestment Service. Non-listed foreign securities, nonpublicly traded limited partnerships, preferred issues, and short positions are not eligible.

Enrollment in Dividend Reinvestment Service becomes effective on the first business day after an investor elects to enroll and the broker receives account application.

Fractional shares: Yes.

Vanguard Dividend Reinvestment Program

All eligible stocks, closed-end mutual funds, exchange-traded funds (ETFs), FundAccess® funds, or Vanguard mutual funds are eligible for Vanguard Dividend Reinvestment Program.

Enrollment in the Dividend Reinvestment Program can be done by phone or by accessing an account on vanguard.com.

Fractional shares: Yes.

Best Brokerages for DRIP Investing in 2023