Dividend Reinvestment Calculator
Estimate DRIP growth from reinvested dividends.
Optional share appreciation
Results update as you type.
How it works
A dividend reinvestment plan, or DRIP, uses the dividends a stock pays to automatically buy more shares, which then pay their own dividends, compounding your investment over time. This calculator estimates that growth. You enter your initial investment, the dividend yield, the number of years, and optionally an annual share-price growth rate, and it returns the estimated future value and total gain. The model compounds your money each year at a rate equal to the dividend yield plus any price appreciation, capturing the snowball effect of reinvested dividends. Reinvesting rather than taking dividends as cash is a powerful long-term strategy because it harnesses compounding: each dividend buys shares that generate more dividends, accelerating growth the longer you stay invested. Over decades, reinvested dividends have historically accounted for a large share of total stock market returns. This is a simplified estimate that assumes a steady yield and that dividends are reinvested at the prevailing price; real results vary with changing dividends, share prices, and taxes on dividends in taxable accounts. It ignores additional contributions, which would boost growth further. Use it to see the long-term power of compounding dividends and to compare reinvestment against taking the cash. Enter your investment, yield, and time horizon to estimate DRIP growth.
FV = principal × (1 + yield + growth)^years
This estimate compounds the initial investment at a yearly rate equal to the dividend yield plus any share-price growth, over the number of years. Reinvesting dividends buys more shares that themselves pay dividends, so the value compounds. It is a simplified model that assumes a constant yield and reinvestment at the prevailing price.
Source:Investment analysis
We review all our tools from time to time to ensure accuracy.
Worked example
How to use this calculator
- 1
Enter your values
Enter initial investment, dividend yield and years.
- 2
Adjust the options
Adjust annual price growth if they apply — sensible defaults are already set.
- 3
Read your result
Future value updates instantly as you type — no button to press.
Frequently asked questions
What is a dividend reinvestment plan?
A dividend reinvestment plan, or DRIP, automatically uses the cash dividends a stock or fund pays to buy more shares instead of paying you cash. Those extra shares then earn their own dividends, compounding your holding over time. DRIPs are a simple, powerful way to grow investments through reinvested income.
How does reinvesting dividends compound growth?
Each reinvested dividend buys additional shares, which pay their own dividends the next period, which buy still more shares. This snowball effect means your dividend income and share count grow year after year, accelerating the longer you stay invested. Compounding reinvested dividends has historically driven a large part of long-term stock returns.
Should I include share price growth?
If you expect the share price to rise over time, entering an annual growth rate makes the estimate more complete, since your shares gain value on top of the dividends. Leaving it at zero isolates the effect of dividend reinvestment alone. Combining both gives a fuller picture of total return, though future growth is uncertain.
Is this estimate exact?
No, it is a simplified projection. It assumes a constant dividend yield and reinvestment at the prevailing price, but real dividends and prices fluctuate. It also ignores taxes on dividends in taxable accounts and any additional contributions you make. Treat the result as an illustration of compounding rather than a guaranteed outcome.
Why are reinvested dividends so important?
Historically, reinvested dividends have made up a substantial portion of the total return of stock market indexes over long periods. Taking dividends as cash forgoes that compounding. For long-term investors not needing the income, reinvesting dividends is one of the most effective ways to build wealth, which this calculator helps illustrate.