Dividend Reinvestment Calculator

Dividend reinvestment calculator for DRIP growth and compounding

If you invest in dividend-paying shares or ETFs, one of the biggest long-term drivers of growth is what you do with the cash dividends. A dividend reinvestment plan (often called DRIP) means you use each dividend payment to buy more shares. That increases your share count, which can increase the next dividend payment, which can buy even more shares. This feedback loop is compounding, but it is easy to underestimate without running the numbers.

This Dividend Reinvestment Calculator is built for a single purpose: estimating how one investment could grow over time when dividends are reinvested back into the same holding. You enter a starting amount, the current share price, the dividend yield, and your time horizon. The calculator then models share accumulation through dividend reinvestment and shows a practical summary of the outcome, including the ending value, total contributions, and an estimate of how much of the growth came from dividends versus price movement.

The default view is quick: it assumes you reinvest dividends and makes conservative baseline assumptions for the optional inputs. If you want a more realistic estimate, open the advanced options. There you can add a monthly contribution, a price growth rate, dividend growth, dividend tax withholding, and a reinvestment fee. These options matter most when your time horizon is long or when taxes and fees meaningfully reduce the amount that actually gets reinvested.

How to use it: start with the amount you plan to invest today and your best estimate of the current share price. The share price is required because dividend reinvestment creates new shares, and the calculator needs a price to convert cash dividends into fractional shares. Then enter an annual dividend yield. Yield is the annual dividend divided by the current price, so it is a convenient starting point even if you do not know the company’s exact dividend-per-share figure. Finally, set the number of years you plan to hold the investment.

Once you calculate, focus on the primary result: the estimated ending value. Then scan the supporting figures. Total dividends earned tells you how much cash the holding produced over time before reinvestment and taxes. Ending shares tells you whether compounding meaningfully increased your ownership. If you add price growth and dividend growth, the ending share price and the approximate growth rate help you sanity-check whether the scenario is realistic for your market.

This calculator is intentionally locked to a single holding. It does not model portfolio rebalancing, buying multiple tickers, changing yield over time due to business cycles, or switching between reinvesting and taking dividends as income. If your real situation includes those complexities, treat this as a planning estimate, not a precise forecast.

Assumptions and how to use this calculator

• Dividends are paid and reinvested at the selected frequency (monthly, quarterly, semiannual, or annual) and reinvestment buys fractional shares at the then-current modeled share price.
• Dividend yield is used to estimate an initial annual dividend-per-share based on the current share price, and dividend growth (if provided) increases dividend-per-share over time at a steady rate.
• Share price growth (if provided) is applied smoothly over time as a constant annual rate converted to a monthly compounding rate.
• Dividend tax withholding (if provided) reduces each dividend payment before reinvestment; it does not model additional tax rules, personal tax brackets, or end-of-year tax settlements.
• Any reinvestment fee is treated as a flat cost per dividend payment and cannot reduce a payment below zero; fees and taxes are simple estimates and may differ from your broker or jurisdiction.

Common questions

Is dividend yield the same as dividend growth?

No. Dividend yield is the current annual dividend divided by the current price. Dividend growth is how the dividend-per-share increases over time. A company can have a high yield with low growth, or a lower yield with stronger growth. This calculator uses yield as a starting point and then applies dividend growth (if you add it) to the dividend-per-share.

Why do you require the share price?

Reinvesting dividends increases your share count. Without a share price, the calculator cannot convert cash dividends into fractional shares. If you do not know the exact price, use your best estimate or the current market price, then rerun the calculation with a slightly higher and lower price to see how sensitive the outcome is.

What does “total dividends earned” mean if I reinvested everything?

It is the cumulative cash dividends generated by the holding over the period before tax and fees. Even if you reinvest every cent, the investment still produced that cash flow. Reinvestment simply converts it into more shares instead of spending it as income.

How should I set price growth and dividend growth?

Use conservative numbers unless you have a strong basis. For price growth, many investors use a long-term average return assumption for the asset class, then adjust down for realism. For dividend growth, look at the holding’s multi-year dividend history if available. If you are unsure, leave these at zero to get a baseline estimate that isolates the reinvestment effect.

Does this include trading costs, bid-ask spread, or real-world dividend timing?

No. It uses a simplified schedule with smooth monthly price growth and discrete dividend payments at the frequency you select. Real markets fluctuate daily, dividends can change, and reinvestment can occur a few days after payment. If fees and timing matter to you, use the reinvestment fee field and treat the estimate as directional rather than exact.