DRIP Brokers: Best Brokers for Dividend Investing of May 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.
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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.)
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. As of close of market on March 28, the S&P 500's one-year total return — which includes dividends — was 29.88%.
DRIP Brokers: Best Brokers for Dividend Investing
| Broker | NerdWallet rating | Fees | Account minimum | Promotion | Learn more |
|---|---|---|---|---|---|
 J.P. Morgan Self-Directed Investing Learn more on J.P. Morgan's website | $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. | Learn more on J.P. Morgan'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 | |
 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 | |
 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 | |
 Vanguard Learn more on Vanguard's website | $0 per trade | $0 | None no promotion available at this time | Learn more on Vanguard's website |
$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
Easy-to-use platform.
$0 commissions.
App connects all Chase accounts.
No account minimum.
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
Best Online Broker for Advanced Traders 2024
$0
per trade
$0
None
no promotion available at this time
Pros
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.
Why We Like It
Interactive Brokers' IBKR Lite is a strong option for frequent traders: The broker offers international trade capabilities, no stock-trading commission and a quality trading platform.
$0
per online equity trade
$0
None
no promotion available at this time
Pros
Four trading platforms with no minimum or fees.
Above-average mobile app.
Extensive research.
Large fund selection.
Commission-free stock, options and ETF trades.
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.
$0
per trade
$0
1 Free Stock
after linking your bank account (stock value range $5.00-$200)
Pros
No account minimum.
Streamlined interface.
Cryptocurrency trading.
IRA with 1% match.
High interest rate on uninvested cash.
Cons
No mutual funds or individual bonds.
Limited customer support.
Why We Like It
Robinhood provides free stock, options, ETF and cryptocurrency trades, and its account minimum is $0, too. Mutual funds and bonds aren't offered, and only taxable investment accounts are available. Still, if you're looking to limit costs or trade crypto, Robinhood is a solid choice.
$0
per trade
$0
None
no promotion available at this time
Pros
Large mutual fund selection.
Commission-free stock, options and ETF trades.
Leader in low-cost funds.
High interest rate on uninvested cash.
High order execution quality.
Cons
Basic trading platform only.
Limited research and data.
Why We Like It
Vanguard is the king of low-cost investing, making it ideal for buy-and-hold and retirement investors. But active traders will find the broker falls short despite its $0 trade commission, 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
Easy-to-use tools.
Excellent customer support.
Advanced mobile app.
Commission-free stock, options, mutual fund and ETF trades.
Cons
Website can be difficult to navigate.
Low interest rate on uninvested cash.
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.
$0
per trade
$0
Up to $200
in Transfer Fee Rebates
Pros
Commission-free stock, ETF and options 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.
$0
per trade
$0
Up to $1,000
in free stock for users who sign up via mobile app
Pros
Commission-free stock, ETF and options trades.
Fractional shares available.
Free financial counseling.
IPO access.
No account minimum.
Cons
Low interest rate on uninvested cash.
Why We Like It
SoFi Active Investing's $0 trading commission, 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.
$0
per trade for online U.S. stocks and ETFs
$0
None
no promotion available at this time
Pros
Commission-free stock, ETF and options 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 offers $0 trading commissions, a selection of more than 3,300 no-transaction-fee mutual funds and top-notch research tools and trading platform. Its zero-fee index funds and strong customer service reputation are just icing on the cake.
$0
per trade
$0
None
no promotion available at this time
Pros
Robust third-party research.
Integrated with Bank of America.
High order execution quality.
Cons
Advanced traders may find fewer securities on offer.
Low interest rates on uninvested cash.
Why We Like It
Merrill Edge offers high-quality customer service, robust research and low fees. Customers of parent company Bank of America will love the seamless, thoughtful integration, with a single login to access both accounts.
$0
per trade (on eligible US securities)
$0
None
no promotion available at this time
Pros
Commission-free trades on eligible U.S. stocks, options and ETFs.
No account minimum.
Strong web-based platform.
Cons
No fractional shares.
Limited third-party research providers.
Why We Like It
Ally Invest’s robust trading platform and lineup of free research, charting, data and analytical tools make it a good choice for active traders. But it’s also appropriate for beginning investors who will appreciate that there is no account minimum and no annual fees.
Last updated on March 29, 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...
