DRIP Dividend Reinvestment Plan

A Dividend Reinvestment Plan (DRIP) allows you to automatically reinvest your cash dividends to purchase additional shares or fund units of the company that paid you those dividends.

This reinvestment process is commission-free, making it an efficient, automatic way to grow your investment portfolio over time.

You can set up a DRIP for most stocks or funds including Exchange Traded Funds (ETFs).

Any cash dividends you earn will automatically be reinvested with no commissions to buy more shares or units of that stock or fund.

• Automatic Reinvestment: With a DRIP, your dividends are automatically reinvested, eliminating the need to place orders manually. This "set it and forget it" approach ensures that your dividends are consistently working for you, and that your cash doesn’t sit idle.
• Commission-Free: Reinvesting dividends through a DRIP is commission-free, which means you can save on transaction costs compared to buying additional shares on your own.
• Compounding Growth: By continuously reinvesting dividends, you can take advantage of compounding growth, potentially increasing your returns over the long term.

When you set up a DRIP, Questrade will use your cash dividends to purchase the largest number of whole shares based on the market price. Any leftover cash will remain in your account.

For example: You own shares of ABC Company that have paid you $110 in dividends. If ABC trades at $25 per share, Questrade will purchase 4 additional shares for $100, with $10 remaining as cash in your account.

Important note: If ABC Company pays you dividends again in the future, your $10 remaining from the earlier DRIP would not be added to the new amount. Leftover DRIP amounts will remain in your cash balances, and do not accumulate towards new DRIPs.

Setting up a DRIP with Questrade is a straightforward process:

1. Download the DRIP Application Form:
   • Fill out your account number on the top right. For multiple accounts, please submit a separate form for each account.
   • Read through the terms and conditions.
   • Complete your name, date, account number, and provide your signature (e-signatures are accepted).
2. Select Your Securities:
   • Choose either "All eligible securities" or "Individual securities".
   • If selecting individual securities, list the ticker symbol, names of the stocks or ETFs, and the exchange they trade on.
3. Submit the Form:
   • Upload the form directly to your account.
   • For multiple accounts, upload each form separately under the appropriate account number.

Most DRIP applications are processed within 2-3 business days. If you’re submitting an application close to a dividend payment date and would like to take advantage of the DRIP, please take this processing time into consideration.

If the position was enrolled after the ex-dividend date it will not be enrolled in this dividend but will be reinvested in future dividends.

Sometimes, your dividends might not be reinvested due to:

• Insufficient Dividends: If the dividends received are less than the price of one full share, the cash will remain in your account. Past dividends do not accumulate for future purchases.
• Enrollment Timing: If your DRIP form is processed after the ex-dividend date, the upcoming dividend will not be reinvested, but future dividends will be.
• Currency Restrictions: If you only enroll one currency (CAD or USD) at the time of DRIP setup, only securities in that currency will be reinvested. Submit a new form if you plan to hold positions in both currencies.

Note: The information in this blog is for educational purposes only and should not be used or construed as financial or investment advice by any individual. Information obtained from third parties is believed to be reliable, but no representations or warranty, expressed or implied, is made by Questrade, Inc., its affiliates or any other person to its accuracy.