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DRIP Brokers: Best Brokers for Dividend Investing of July 2024

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.

Written by Arielle O'Shea
Investing and Retirement Specialist; Banking Specialist
Profile photo of Chris Davis
Edited by Chris Davis
Assigning Editor
Fact Checked

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The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.

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.)

Our deep, independent analysis of brokers sorts through key account details to find and evaluate the information investors want when choosing a brokerage firm. To see our full methodology and learn more about our process, read our criteria for evaluating brokers and for evaluating robo-advisors.

Over 60 investment account providers reviewed and rated by our expert Nerds.

More than 50 years of combined experience writing about finance and investing.

Hands-on testing of the account funding process, broker websites and stock-trading platforms.

Dozens of objective ratings rubrics, and strict guidelines to maintain editorial integrity.

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.)

Our deep, independent analysis of brokers sorts through key account details to find and evaluate the information investors want when choosing a brokerage firm. To see our full methodology and learn more about our process, read our criteria for evaluating brokers and for evaluating robo-advisors.

Over 60 investment account providers reviewed and rated by our expert Nerds.

More than 50 years of combined experience writing about finance and investing.

Hands-on testing of the account funding process, broker websites and stock-trading platforms.

Dozens of objective ratings rubrics, and strict guidelines to maintain editorial integrity.

🤓Nerdy Tip

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

NerdWallet rating 

4.9

/5
Charles Schwab
Learn more

on Charles Schwab's website

Fees

$0

per online equity trade

Account minimum

$0

Promotion

None

no promotion available at this time

Pros

  • Commission-free stock, options and ETF trades.

  • Four trading platforms with no minimums or fees.

  • Above-average mobile app.

  • 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

NerdWallet rating 

5.0

/5
Interactive Brokers IBKR Lite
Learn more

on Interactive Brokers' website

Fees

$0

per trade

Account minimum

$0

Promotion

None

no promotion available at this time

Pros

  • Commission-free stock, options and ETF trades.

  • Large investment selection.

  • Strong research and tools.

  • Over 19,000 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.

NerdWallet rating 

4.3

/5
Robinhood
Learn more

on Robinhood's website

Fees

$0

per trade

Account minimum

$0

Promotion

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.

  • High interest rate on uninvested cash.

Cons

  • No mutual funds.

  • Limited customer support.

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.

NerdWallet rating 

4.2

/5
J.P. Morgan Self-Directed Investing
Learn more

on J.P. Morgan's website

Fees

$0

per trade

Account minimum

$0

Promotion

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

  • Limited tools and research.

  • Portfolio Builder tool requires $2,500 balance.

  • 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

NerdWallet rating 

4.4

/5
E*TRADE
Learn more

on E*TRADE's website

Fees

$0

per trade. Other fees apply.

Account minimum

$0

Promotion

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.

  • Advanced mobile app.

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 beginner investors benefit from a large library of educational resources.

NerdWallet rating 

4.2

/5
Vanguard
Learn more

on Vanguard's website

Fees

$0

per trade

Account minimum

$0

Promotion

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.

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.

NerdWallet rating 

4.4

/5
Firstrade
Fees

$0

per trade

Account minimum

$0

Promotion

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 24/7 customer support.

  • 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.

NerdWallet rating 

4.2

/5
SoFi Active Investing
Learn more

on SoFi Invest's website

Fees

$0

per trade

Account minimum

$0

Promotion

Up to $1,000

in free stock for users who sign up via mobile app

Pros

  • Commission-free stock, options and ETF trades.

  • Free financial counseling.

  • IPO access.

Cons

  • Low interest rate on uninvested cash.

Why We Like It

SoFi Active Investing's $0 trading commission, free access to financial advisors, fractional shares and $1 account minimum are attractive to new investors. More advanced investors will appreciate the company's wide mutual fund selection and IPO access.

NerdWallet rating 

5.0

/5
Fidelity
Fees

$0

per trade for online U.S. stocks and ETFs

Account minimum

$0

Promotion

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.

NerdWallet rating 

4.2

/5
Merrill Edge® Self-Directed
Fees

$0

per trade

Account minimum

$0

Promotion

None

no promotion available at this time

Pros

  • Commission-free stock, options and ETF trades.

  • Robust third-party research.

  • Integrated with Bank of America.

  • High order execution quality.

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.

NerdWallet rating 

4.4

/5
Ally Invest
Fees

$0

per trade (on eligible US securities)

Account minimum

$0

Promotion

None

no promotion available at this time

Pros

  • Commission-free stock, options and ETF trades.

  • No account minimum.

  • Strong web-based platform.

  • Integration with Ally Bank, with easy transfers to high-yield savings account.

Cons

  • No fractional shares.

  • Limited third-party research providers.

Why We Like It

Ally Invest’s robust trading platform and lineup of free technical tools makes it a good choice for active traders, as do its free stock trades and low options trading costs. But its lack of fees, portfolio management feature and cash management options also make it a good choice for beginner investors.

Last updated on July 2, 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.