Setting Up a Broker DRIP
Before you buy your first share of stock with any broker, ask about the broker’s policy on reinvesting dividends. Many do allow their customers to reinvest dividends at no cost. It’s a service they provide.
If a broker you are considering responds that they do charge commissions on dividend reinvestment, and you want to start using DRIP investment strategies, don’t open the account. So many brokers do not charge for dividend reinvestment that you can easily take your business elsewhere, and we recommend that you do just that if you want to be a DRIP investor.
Reinvesting your dividends at no cost is a service provided by brokers called a “synthetic DRIP.” It’s not the real thing, but if the company you choose doesn’t ...