DRIP Brokers: Best Brokers for Dividend Investing
Choosing a broker that offers DRIP, or dividend reinvestment plans, is key for dividend investors. The best DRIP brokers offer fractional shares and free commissions.
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Why trust NerdWallet
Many people opt to invest in dividend stocks (either directly or through funds, like mutual funds or exchange-traded funds) because of the steady stream of income these companies pay. The regular dividend payments offer cash flow, and speed up the process of earning your initial investment back.
But maybe you don't currently need that cash flow — in which case, you might opt to reinvest those dividends. Many online brokers and companies make this easy by offering what's called a DRIP, or dividend reinvestment plan. These plans automatically reinvest dividends back into the stock or fund that paid that dividend. Over time, reinvesting dividends allows you to slowly invest more money by putting those dividends back to work. Dividend reinvestments also reduce the chance of holding idle cash in your brokerage account. (Though some brokers are now paying higher interest rates on idle cash, many are not.)
The brokers below all offer dividend investment plans, or DRIP plans, that automatically reinvest dividends. They also charge no commission, which means you won't pay to purchase those additional shares.
Note: Many public companies offer direct investment into DRIP plans without the use of a brokerage account, sometimes at a discount compared to the market price per share. It's worth investigating these options, but keep in mind that some charge fees that could wipe out any discount offered. They may also require an investment minimum. (Read more about the pros and cons of company DRIPs.)
Why trust NerdWallet
Many people opt to invest in dividend stocks (either directly or through funds, like mutual funds or exchange-traded funds) because of the steady stream of income these companies pay. The regular dividend payments offer cash flow, and speed up the process of earning your initial investment back.
But maybe you don't currently need that cash flow — in which case, you might opt to reinvest those dividends. Many online brokers and companies make this easy by offering what's called a DRIP, or dividend reinvestment plan. These plans automatically reinvest dividends back into the stock or fund that paid that dividend. Over time, reinvesting dividends allows you to slowly invest more money by putting those dividends back to work. Dividend reinvestments also reduce the chance of holding idle cash in your brokerage account. (Though some brokers are now paying higher interest rates on idle cash, many are not.)
The brokers below all offer dividend investment plans, or DRIP plans, that automatically reinvest dividends. They also charge no commission, which means you won't pay to purchase those additional shares.
Note: Many public companies offer direct investment into DRIP plans without the use of a brokerage account, sometimes at a discount compared to the market price per share. It's worth investigating these options, but keep in mind that some charge fees that could wipe out any discount offered. They may also require an investment minimum. (Read more about the pros and cons of company DRIPs.)
Reinvesting your dividends rather than taking them in cash may boost your investment returns over the long term.
DRIP Brokers: Best Brokers for Dividend Investing
| Broker | NerdWallet rating | Fees | Account minimum | Promotion | Learn more |
|---|---|---|---|---|---|
 Robinhood Learn more on Robinhood's website | $0 per trade | $0 | 1 Free Stock after linking your bank account (stock value range $5.00-$200) | Learn more on Robinhood's website | |
 Charles Schwab Learn more on Charles Schwab's website | $0 per online equity trade | $0 | None no promotion available at this time | Learn more on Charles Schwab's website | |
 Interactive Brokers IBKR Lite Learn more on Interactive Brokers' website | $0 per trade | $0 | None no promotion available at this time | Learn more on Interactive Brokers' website | |
 Vanguard Learn more on Vanguard's website | $0 per trade | $0 | None no promotion available at this time | Learn more on Vanguard's website | |
 E*TRADE Learn more on E*TRADE's website | $0 per trade. Other fees apply. | $0 | Get up to $1,000 when you open and fund an E*TRADE account | Learn more on E*TRADE's website |
$0
per trade
$0
1 Free Stock
after linking your bank account (stock value range $5.00-$200)
Pros
Commission-free stock, options and ETF trades.
Streamlined interface.
Cryptocurrency trading.
IRA with 1% match (3% for Gold members).
High interest rate on uninvested cash.
Cons
No mutual funds.
Little third-party research.
Why We Like It
Robinhood provides free stock, options, ETF and cryptocurrency trades (but no bonds or mutual funds), and its account minimum is $0, too. Robinhood Gold offers a high interest rate on uninvested cash and low margin rates.
$0
per online equity trade
$0
None
no promotion available at this time
Pros
Commission-free stock, options and ETF trades.
Five trading platforms with no minimums or fees.
Access to thinkorswim platforms.
Extensive research offerings.
Large fund selection.
Cons
Low interest rate on uninvested cash.
Why We Like It
Charles Schwab has earned its strong reputation: The broker offers high-quality customer service, four free trading platforms, a wide selection of no-transaction-fee mutual funds and $0 commissions for stocks, ETFs and options.
Best Online Broker for Advanced Traders 2024
$0
per trade
$0
None
no promotion available at this time
Pros
Commission-free stock, options and ETF trades.
Large investment selection.
Strong research and tools.
Huge selection of no-transaction-fee mutual funds.
High order execution quality.
Cons
High minimum to earn interest on uninvested cash.
Website can be difficult to navigate.
Why We Like It
Don't let the name fool you: IBKR Lite offers commission-free stock trading (including international trade capabilities), more than 19,000 mutual funds, and a well-featured platform.
$0
per trade
$0
None
no promotion available at this time
Pros
Commission-free stock, options and ETF trades.
Leader in low-cost mutual, index and exchange-traded funds.
High interest rate on uninvested cash.
High order execution quality.
Cons
Basic trading platform only.
Limited research and data.
No fractional shares for stocks.
Why We Like It
Vanguard is the king of low-cost investing, making it ideal for buy-and-hold and retirement investors. It offers a top-notch selection of proprietary, low-cost mutual funds, including many ESG options. Despite its $0 trade commission, active traders will find the broker falls short due to the lack of a strong trading platform.
$0
per trade. Other fees apply.
$0
Get up to $1,000
when you open and fund an E*TRADE account
Pros
Commission-free stock, options and ETF trades.
Easy-to-use tools.
Strong customer support.
Volume discount on options contract fees.
Cons
Website can be difficult to navigate.
Low interest rate on uninvested cash.
No fractional shares.
Why We Like It
E*TRADE has long been one of the most popular online brokers. The company's $0 commissions and strong trading platforms appeal to active traders, while intermediate investors benefit from a large library of educational resources.
$0
per trade
$0
Get up to $700
when you open and fund a J.P. Morgan Self-Directed Investing account with qualifying new money.
Pros
Commission-free stock, options and ETF trades.
Easy-to-use platform.
App connects all Chase accounts.
In-person customer support at Chase branches.
Cons
Bare-bones trading platform isn't for advanced traders.
Low interest rate on uninvested cash.
Why We Like It
J.P. Morgan Self-Directed Investing is a clear-cut investment platform that is great for beginners looking to learn how to buy and sell investments. More advanced investors, however, may find it lacking in terms of available assets, tools and research. INVESTMENT PRODUCTS: NOT A DEPOSIT • NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
$0
per trade
$0
Up to $200
in Transfer Fee Rebates
Pros
Commission-free stock, options and ETF trades.
$0 contract fee on options trades.
All mutual funds are commission-free.
Chinese language options.
Cons
No forex, futures or crypto trading.
Low interest rate on uninvested cash.
Why We Like It
In addition to free stock and options trading, Firstrade charges no commission for mutual funds, a deal no other broker matches. Options traders will appreciate that the broker charges no contract fee, also a rarity among brokers.
$0
per trade
$0
Get up to $1,000
in stock when you fund a new account.
Pros
No commissions on stock, options and ETF trades
Complimentary access to financial planners.
IPO access.
IRA match.
Cons
Low interest rate on uninvested cash.
Why We Like It
SoFi Active Investing's $0 trading commission, complimentary access to financial advisors, fractional shares and $0 account minimum are attractive to new investors. More advanced investors will appreciate the company's wide mutual fund selection and IPO access.
$0
per trade for online U.S. stocks and ETFs
$0
None
no promotion available at this time
Pros
Commission-free stock, options and ETF trades.
Large selection of research providers.
Strong customer service.
Expense-ratio-free index funds.
Highly rated mobile app.
High interest rate on uninvested cash.
Cons
Relatively high broker-assisted trade fee.
Why We Like It
Fidelity is one of the largest and most well-established brokerages, and it shows. Fidelity charges no trading commissions, offers an extensive set of no-fee, no-minimum index funds. It also stands out for its top-notch research tools, a renowned trading platform and very strong customer service.
$0
per trade
$0
None
no promotion available at this time
Pros
Commission-free stock, options and ETF trades.
Integrated with Bank of America.
High order execution quality.
24/7 phone support.
Cons
No fractional shares.
Low interest rates on uninvested cash.
Why We Like It
Merrill Edge's extensive research and educational offerings, its Idea Builder investment-finder tool, and its seamless integration with other Bank of America accounts make it a solid choice for beginner investors.
$0
per trade (on eligible US securities)
$0
None
no promotion available at this time
Pros
Commission-free stock, options and ETF trades.
No account minimum.
Integration with Ally Bank, with easy transfers to high-yield savings account.
Low options contract fee.
Cons
No fractional shares.
Limited third-party research providers.
Basic trading platform.
Why We Like It
Ally Invest’s lack of fees, portfolio management feature and cash management options make it a good choice for beginner investors.
Last updated on October 1, 2024
Methodology
NerdWallet’s comprehensive review process evaluates and ranks the largest U.S. brokerage firms by assets under management, along with emerging industry players. Our aim is to provide an independent assessment of providers to help arm you with information to make sound, informed judgements on which ones will best meet your needs. We adhere to strict guidelines for editorial integrity.
We collect data directly from providers through detailed questionnaires, and conduct first-hand testing and observation through provider demonstrations. The questionnaire answers, combined with demonstrations, interviews of personnel at the providers and our specialists’ hands-on research, fuel our proprietary assessment process that scores each provider’s performance across more than 20 factors. The final output produces star ratings from poor (one star) to excellent (five stars).
For more details about the categories considered when rating brokers and our process, read our full methodology.
To recap our selections...
