Dividend Reinvestment Calculator (DRIP)
Calculate the power of dividend reinvestment. Compare DRIP vs non-DRIP returns, analyze yield on cost, tax impact, and long-term wealth creation with automatic dividend reinvestment.
Current Investment: ₹1,00,000
Current Yield: 5.00%
Automatically reinvest dividends to buy more shares
| Year | DRIP Shares | DRIP Value | Non-DRIP Value | DRIP Advantage |
|---|---|---|---|---|
| 1 | 104.5 | ₹1,17,040 | ₹1,16,500 | ₹540 |
| 2 | 109.03 | ₹1,36,773 | ₹1,34,800 | ₹1,973 |
| 3 | 113.6 | ₹1,59,595 | ₹1,55,102 | ₹4,493 |
| 4 | 118.18 | ₹1,85,959 | ₹1,77,629 | ₹8,330 |
| 5 | 122.78 | ₹2,16,378 | ₹2,02,634 | ₹13,744 |
| 6 | 127.38 | ₹2,51,435 | ₹2,30,394 | ₹21,041 |
| 7 | 131.99 | ₹2,91,796 | ₹2,61,221 | ₹30,575 |
| 8 | 136.6 | ₹3,38,212 | ₹2,95,461 | ₹42,751 |
| 9 | 141.19 | ₹3,91,540 | ₹3,33,502 | ₹58,038 |
| 10 | 145.77 | ₹4,52,751 | ₹3,75,774 | ₹76,977 |
Final Portfolio Value (With DRIP)
₹4,52,751
145.77 shares @ ₹3105.93
Without DRIP (For Comparison)
₹3,75,774
100 shares (unchanged)
DRIP Advantage
₹76,976
+20.48% more wealth
DRIP increases your holdings by 45.8% over 10 years
Your yield on cost grows from 5.00% to 8.94%
Tax reduces total returns by ₹8,939
• Use DRIP during accumulation phase (20s-50s)
• Choose stocks with consistent dividend growth history
• Monitor dividend sustainability (payout ratio)
• Consider DRIP in tax-advantaged accounts
• Switch to cash dividends when you need income
Explore other calculators to optimize your investment strategy
What is DRIP?
A Dividend Reinvestment Plan (DRIP) is an investment strategy where cash dividends are automatically used to purchase additional shares of the same stock. Instead of receiving dividend payments in your bank account, these dividends buy more shares, which then generate their own dividends in future periods. This creates a powerful compounding effect that can significantly increase wealth over long periods.
Benefits of DRIP
- Automatic Compounding: Your money grows exponentially as reinvested dividends generate more dividends
- Rupee Cost Averaging: Buy more shares when prices are low, fewer when prices are high
- No Transaction Costs: Many DRIPs offer commission-free reinvestment
- Disciplined Investing: Removes emotion and ensures consistent investment
- Growing Yield on Cost: Your effective yield increases as dividends grow
How to Use This Calculator
Enter your current stock holdings, dividend information, and expected growth rates. Toggle the DRIP option on or off to compare how reinvesting dividends affects your long-term wealth versus taking cash dividends. Adjust tax rates based on your country and income bracket to see the real after-tax impact.
DRIP vs Cash Dividends
The choice between DRIP and cash dividends depends on your life stage and financial goals. Use DRIP during your accumulation years (typically 20s through 50s) when you don't need the income and want to maximize long-term wealth. Switch to cash dividends during retirement or when you need the income stream. The calculator shows that over 20-30 years, DRIP can generate 50-100% more wealth than taking cash dividends, especially when combined with dividend growth.