Glossary A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z | 1 | 3 | 4 | 5 Definitions by InvestorWords.com   What is...? Dividend Reinvestment Plan (DRIP) A Dividend Reinvestment Plan (DRIP) is an investment plan, offered by a public company, that enables shareholders to automatically reinvest cash dividends and capital gains distributions in the company's stock without paying brokerage commissions. Many DRIPs also allow the investment of additional cash from the shareholder (this is known as an optional cash purchase). Commissions and fees for optional cash purchases vary and you should read the plan summary for further information. Many DRIPs require that the shareholder own at least one share of the company's stock in his or her name (not "street name") before enrolling. To find out if a particular company offers a DRIP and what its plan policies are, check the Investor Relations page of the company's Web site, or contact their Investor Relations department directly. Some brokerage firms–including E*TRADE Securities–offer brokerage DRIPs. In this arrangement, the investor pays a commission to buy the original share(s), as well as any subsequent purchases made with new money. But the brokerage firm then automatically reinvests dividends and capital gains in the stock, including partial shares, commission-free. Usually mutual funds can also be enrolled in brokerage DRIPs. To enroll a stock or mutual fund in your E*TRADE Securities brokerage account in a DRIP, simply send us a DRIP request. Learn more about DRIPs Copyright ©2009 by InvestorGuide.com. All Rights Reserved.