DRIP Dividend Reinvestment Calculator
Enter your starting investment, its dividend yield, expected annual price growth, and any yearly contributions. This DRIP calculator compounds your money using the total return — dividends plus share-price appreciation — reinvesting every payout so it buys more shares that then earn their own dividends. You get a projected future value, the total you contributed, how much of the balance is pure growth, and a year-by-year view of the snowball. It is a planning estimate, not investment advice.
Investment
Total return
Future value
$21,589.25
8.00% total return (3.00% yield + 5.00% growth), 10 yrs
Total contributed
$10,000.00
Investment growth
$11,589.25
Breakdown
Balance over time
Compare scenarios
Run the same calculation with two or three input sets side by side. Differences are highlighted; every number comes from the same tested formula as the calculator above.
| Input | Scenario A | Scenario B |
|---|---|---|
| Principal | ||
| Dividend Yield Pct | ||
| Price Growth Pct | ||
| Annual Contribution | ||
| Years |
How it works
Each year your balance grows by the total return, which is the dividend yield plus the share-price growth. At the default 3% yield and 5% price growth, that is an 8% total-return factor of 1.08 applied to the whole balance every year. A dividend reinvestment plan (DRIP) automatically uses each dividend to buy more shares, so the yield portion is not paid out as cash — it stays invested and compounds alongside the price growth.
If you add annual contributions, that new money is credited at the end of each year and then compounds in every year that follows. Total contributed is simply your starting principal plus all the contributions you make; the rest of the final balance is growth. Because reinvested dividends buy shares that pay their own dividends, the growth accelerates over time rather than adding the same amount each year.
The year-by-year chart plots your balance from year one to the end of your horizon so you can see the compounding curve steepen. The calculator holds the yield and growth rates constant for clarity — a deliberate simplification. Real dividend yields, dividend cuts, and share prices all move year to year, so treat the projection as a smooth-average scenario for comparing choices, not a forecast of any specific outcome.
Frequently asked questions
What does 'total return' mean here?+
Total return combines two sources of gain: the dividend yield (income paid to shareholders, here reinvested) and price growth (capital appreciation as the share price rises). This calculator adds them into a single annual growth rate — 3% yield plus 5% growth equals an 8% total return. Separating the two matters because a stock with a high yield but flat or falling price can deliver a lower total return than a lower-yield stock whose price is climbing. Total return is the honest measure of how your money actually grows.
Why does reinvesting dividends make such a difference?+
When you reinvest a dividend instead of taking it as cash, it buys additional shares. Those new shares pay their own dividends the next period, which buy still more shares — the classic compounding snowball applied to income, not just price. Over long horizons this reinvestment can account for a large share of an investor's total return. Taking dividends as cash instead removes that compounding engine, so the same yield produces meaningfully less over decades.
How realistic is a constant yield and growth rate?+
It is a simplification. This model assumes your dividend yield and price growth stay the same every year, which keeps the math transparent but does not reflect real markets: yields change, companies raise or cut dividends, and prices can fall for years at a time. Use the calculator to compare scenarios and understand the mechanics of reinvestment, not to predict a precise balance. It is an educational planning tool and not investment advice — for decisions about your own money, consult a qualified financial professional.