What a dividend reinvestment plan builds when every payment buys more shares
Estimates only, not financial advice. What you type stays on your device. Updated on 25 Oct 2026.A reinvestment plan compounds twice over: each payment buys more shares, and those shares receive the next payment, which is itself a little larger if the company raises its dividend. Every payment is worked out on its own date here, at the share price on that date, rather than rolled up into one annual step.
Reinvest every payment is switched on, so each dividend buys more shares.
Enter the Amount invested, Share price and the Dividend yield.
Set the dividend and share price growth you expect, and the number of years under For.
Read Shares held and Value of the holding at the end, and follow the growth on the chart.
Modelling reinvestment without dividend growth, or the reverse, understates a decade badly.
Three numbers get confused with each other whenever dividends are discussed, and this page keeps them apart.
Reinvestment is modelled payment by payment rather than once a year, because that is what happens: a quarterly dividend buys shares four times at four different prices, and those shares receive the next payment. Rolling that up into an annual step visibly understates the share count within five years.
The tax setting matters more than people expect. In a taxable American account a dividend is income in the year it is paid, whether it reaches your bank or buys more shares, so a rate entered here is deducted before anything is reinvested. In an IRA or a 401(k) nothing is due as it is paid, and zero is the right setting. Whether a dividend is qualified depends on the company and how long you held it, so the rate is yours to decide rather than ours to assume.
The rest of the article, and all 7 questions about Dividend Calculator, are on the Dividend Calculator page.
Multiply the number of shares by the annual dividend per share, or multiply the amount invested by the yield, which comes to the same figure. A 10,000 dollar holding at a 3.50% yield pays 350 a year. Divide by four for a quarterly payer, or by twelve for a monthly one.
Yes, in a taxable American account. The dividend is income in the year the company pays it, whether the money reaches your bank or buys more shares, and a 1099-DIV arrives either way. Enter your rate above and only the after-tax amount is reinvested. In an IRA or a 401(k), leave the rate at zero.
Reinvesting compounds, so over long periods it produces more: each payment buys shares that receive the next payment. Taking the cash produces income you can spend or invest elsewhere. Run both settings above with the same assumptions to see the size of the gap before deciding which suits the account.
Yields move with the share price every trading day, differ between share classes, and are never the yield your own purchase locked in. A figure printed here would be wrong for most readers on most days, so the yield is taken from the quote or annual report in front of you instead.
Formula only: no rates or limits are read from an official source.
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