TradeStation DRIP (Dividend Reinvestment) in 2025

TradeStation dividend reinvestment program fee and enrollment. TradeStation DRIP plan for stocks, mutual funds, ETFs, and ADRs. Is it free?

DRIP Service at TradeStation

Unfortunately, TradeStation does not offer DRIP service, even for clients who are willing to pay for it. This is a significant disadvantage this broker has, especially given the fact that many of the investors who use the broker are stock traders.

Even mutual fund distributions cannot be reinvested at TradeStation. They are deposited as cash into an account’s core position. This is a real failure at this broker. Virtually all online discount brokers allow mutual fund distributions to be reinvested.

Traders who want to call and complain can reach the broker at 1-800-770-4049. Maybe if enough customers requested reinvestment services, the broker would provide them, at least at some price. This would be especially helpful to stock and ETF traders, as many of these securities today do pay dividends at least on an annual basis, if not more frequently.

DRIP Service at Other Brokers

Many brokerage houses today offer DRIP service, and it’s usually free. For example, WellsTrade, Merrill Edge, Vanguard, and Interactive Brokers all provide DRIP service. It is free of charge at the first three brokerage houses. IB charges its standard commission for each dividend reinvestment.

Other brokerage firms that provide a dividend reinvestment plan for stocks and ETF’s (and mutual funds) include E*Trade, Charles Schwab, and TIAA. The enrollment process varies. , for example, provides an easy-to-use online enrollment form where users can sign up or modify a security’s DRIP status. TIAA, on the other hand, requires its customers to fill out a paper form, which then has to be faxed in or snail mailed.

TradeStation DRIP Plans

A dividend reinvestment plan, often abbreviated as a DRIP, offers a convenient way to take cash dividends from stocks and exchange-traded funds and reinvest these distributions as additional shares of the securities that paid them.

This service was inspired by mutual funds, which for many decades have offered the ability to reinvest cash distributions as additional shares. Mutual funds can do this because they trade in fractional shares, so it’s easy for a fund to issue such shares. Usually, the amount of a dividend or capital gain distribution doesn’t work out to a whole share.

How a DRIP System Works

Stocks and ETF’s don’t trade in fractional shares, so a system had to be developed to allow their cash payments to be reinvested. Under the DRIP scheme, a broker takes the cash payment, purchases whole shares if the dividend is large enough, and then pockets the remaining amount. It then credits the customer’s account a fractional share for the remaining balance based on the current market price of the equity.

If a broker has multiple clients receiving the same dividend, the firm can pool these dividends and use the funds to purchase whole shares. It can distribute the whole shares later to accounts that accumulate enough fractional shares to reach one whole share.

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Updated on 2/10/2025.

About the Author

Chad Morris is a financial writer with more than 20 years experience as both an English teacher and an avid trader. When he isn’t writing expert content for Brokerage-Review.com, Chad can usually be found managing his portfolio or building a new home computer.