DRIP Brokers: Best Brokers for Dividend Investing for April 2024

A combination of global stock market access, impressively low fees, and advanced trading and research tools make Interactive Brokers the go-to platform for traders and investors.

It’s easy to enroll in IBKR’s automatic stock dividend reinvestment. Just head to Dividend Election in your account settings and choose whether you want to receive cash or reinvest. US and Canadian shares are eligible for the DRIP.

The Interactive Brokers DRIP may not be perfect—you can only enroll at the account level, so you can’t pick specific stocks for reinvestment. Another thing to be aware of is that you’ll be charged a commission on stocks purchased through the DRIP.

This is even true for IBKR Lite clients, who don’t usually pay commissions on stocks and ETFs. However, with commissions of just $0.005 and no account fees, Interactive Brokers is still one of the most affordable trading platforms.

The DRIP can actually be combined with IBKR’s Stock Yield Enhancement Program. This means you can earn extra income by lending the shares in your DRIP plan.

Beyond the DRIP, standout features include comprehensive reporting, market commentary podcasts, and IBKR GlobalAnalyst for finding undervalued stocks worldwide.

Schwab brings decades of experience to the table, combining the traditional with the modern. If you like classic first-rate customer service, you can call up your broker and have them place orders on your behalf, for a fee.

But Schwab’s acquisition of TD Ameritrade means you’ll also have access to the state-of-the-art thinkorswim® platforms. This means deep customization, 400+ technical analysis tools, and a trading simulator for test-driving strategies.

Automating dividend reinvestment is as simple as heading to your Positions page and choosing Yes in the Reinvest column. The best part is that all of your cash dividends can be reinvested with fractional shares, so your investment can compound all the faster.

Wondering which stocks are best for a DRIP? Schwab’s screener will help you with that. Filter stocks by dividend yield, frequency, growth rate, and more. Look at charts for stocks that interest you and compare them side by side.

If your DRIP is for your retirement, Schwab offers a variety of IRAs. These come with retirement resources, calculators, insights, and no additional fees.

Talking of fees, Schwab’s pricing is another benefit. The broker charges a 0% commission on stocks or ETFs, and there’s no fee for dividend reinvestment. With no platform, inactivity, or account opening fees, you can easily avoid paying a dime.

The one downside is that Schwab isn’t the most straightforward platform to navigate for new users. If you’re not familiar with technical charts, screeners, and detailed trade tickets, you might have a bit of a learning curve with Schwab. Thankfully, there are plenty of how-to videos, trading guides, market commentary, and support is just a phone call away.

Fidelity is the go-to platform for mutual funds. It offers more than 10,000 of them, along with tools, analysis, and insights from its expert fund managers. The best part? Fidelity’s mutual funds are eligible for a DRIP.

If you head to the Dividends and Capital Gains page in your account, you can choose whether to reinvest in the same assets with fractional shares or pool your dividends to buy other stocks and funds.

The research tools are handy for finding your ideal investments. Easily find mutual funds for income generation or screen stocks according to dividend yield. On top of that, you’ll get access to Morningstar data and the latest news.

If you want to reinvest dividends to build your retirement savings, Fidelity is also a great place to do just that. You’ll get a free personalized retirement plan, timely insights, and a choice of tax-advantaged accounts.

Fidelity stands out for its support and advice. You can go old-school with a dedicated advisor and phone access. Meanwhile, modernists will appreciate digital advice and robo-investing. Alternatively, go down the DIY route if you want full control over your portfolio.

The fees are more than affordable. Benefit from no platform fee and a 0% commission on stocks and ETFs.

So are there any downsides? Well, Fidelity isn’t the most intuitive platform for newbies. In fact, it’s not that dissimilar to Schwab, but the difference is that Fidelity’s trading tools aren’t quite as advanced.

New to DRIPs or investing in general? Then Robinhood is a good place to start. The app is designed to be easy to use, whatever your experience. There are big, clear buttons that make navigation obvious. Plus you can learn investing basics in the Learn section.

Simply enable dividend reinvestment in the Investing section of your account. This will show you a list of the eligible stocks you hold. Toggle on the ones for which you want to enable a DRIP.

You can reinvest the full dividend amount as Robinhood offers fractional shares. In fact, it’s a great app for those with a modest portfolio. There’s a minimum investment of just $1, plus no commissions on stocks.

Robinhood has branched into retirement services with its IRA account. You’ll get a 1% match on contributions, or a 3% match if you subscribe to Robinhood Gold. Robinhoods other offerings include crypto, options, and a debit card.

Now for the negatives. By catering to beginner investors, Robinhood compromises on advanced trading functionality. You’ll still get access to customizable charts, but with significantly fewer technical indicators and order types than the other brokers on this list.

You should also be aware of the limited asset offering. You won’t find many asset types such as mutual funds, bonds, and futures. Plus, Robinhood’s 5,000 securities are a drop in the ocean compared to Schwab’s 14,000+. But then Robinhood’s spot crypto features are something you won’t find on Schwab.

Looking for somewhere to reinvest dividends for your retirement? Chase has got you covered. It has plenty of retirement guides and calculators. The JP Morgan Wealth Plan is a great way to plan your goals, track progress, and simulate different scenarios.

Use the Chase Mobile app to schedule a meeting with a JP Morgan Advisor if you want expert input. You can choose a traditional IRA, a Roth IRA, or a General Investment Account. But the best bit is that when transfer or rollover to one of these JP Morgan Self-Directed Investing accounts you could get up to $700 free.

If you want to start reinvesting your dividends, you won’t be able to set this up through the Chase Mobile app. Instead, head to the Chase website and look for the Automatic reinvestment option in your Settings.

Choose what you want to do with any dividends or capital gains for all stocks, ETFs, and mutual funds in your account. Or decide whether you want to reinvest for individual securities.

There’s no fee for Chase’s DRIP feature. In fact, there’s no commission at all when trading stocks, ETFs, and options. But you could still run into third-party fees charged by the mutual funds themselves.

The main downside is that it’s difficult to get a feel for the platform in advance as there’s no demo account. And if you do later decide you want to transfer to a different broker, you’ll face a $75 termination fee.

Vanguard is affordable for any size portfolio given the low expense ratio of its funds and its no-commission online trading. However, the best benefits are reserved for biggest balances.

Those with over $1 million can expect exclusive resources and personalized investment advice from experts. They can also avoid fees when placing trades by phone.

Enrol in dividend reinvestment during your application, or else access your account online or by phone. You can find the option under Profile & Settings in your Account Information. There’s no fee or commission for the service.

Vanguard has a wide selection of stocks, ETFs, closed-end mutual funds, FundAccess funds, and Vanguard mutual funds—all eligible for dividend reinvestment. You’ll receive fractional shares rounded to three decimal places.

Wondering what other investment products and services to expect? Well, Vanguard also offers money market, CDs, and bonds. You’ll get a choice of account types—IRAs, small business retirement, 403(b), 529 saving plans, and more. Plus, there’s a robo-advisor service.

Last but by no means least comes E*TRADE, which merged with Morgan Stanley in 2020. If you’re drawn to DRIP investing because you like the hands-off approach, then this is the platform for you.

As well as DRIP, E*TRADE offers managed portfolios. They let you leave investment decisions to experts or a combination of human and robo-advisors. Then there’s Automatic Investing. This lets you set up recurring investments in your retirement or brokerage account.

It’s simple enough to automate dividend reinvestment. Just click the dividend reinvestment icon in your portfolio. You’ll be able to choose individual shares to reinvest in or apply settings to your entire portfolio. Your full dividend amount will be invested as E*TRADE gives you fractional shares.

You’ll get a decent range of investment choices at E*TRADE. These include futures, options, mutual funds, bonds, CDs, and IPOs. Even better, there’s no commission on stocks, ETFs, and mutual funds.

Things you should be aware of are that the prebuilt portfolios come with an investment minimum of $2,500 for ETFs. Also, only stocks above $5 are eligible for a DRIP, and some users have complained of having difficulty turning off their DRIPs.