Reinvesting dividends is one of the easiest ways to help your investments grow over time. Instead of receiving dividend payments as cash and leaving that money unused, you can set up automatic dividend reinvestment so your dividends are used to purchase additional shares.
In this guide, you’ll learn how to turn on dividend reinvestment and start building your portfolio automatically with dividends on ETRADE.
Why Reinvest Dividends on ETRADE?
When you enable dividend reinvestment, every dividend payment you receive is automatically used to buy more shares of the investment that paid the dividend. This process is called a Dividend Reinvestment Plan (DRIP).
For example, if you own shares of a company or ETF that pays dividends, ETRADE can automatically use those payments to purchase additional fractional or full shares instead of sending the money to your account as cash.
Over time, these extra shares can generate their own dividends, creating a compounding effect that helps your portfolio grow.
How to Enable Dividends on ETRADE Step by Step
Turning on dividends on ETRADE only takes a few minutes. Follow these steps:
Step 1: Open the ETRADE Menu
From the main ETRADE screen, tap the “Menu” button located at the bottom right corner of the app.
Once the menu opens, select “My Profile.”
You will see a long list of account settings, including options to update personal information, change your username, change your password, and more.
Step 2: Find the Dividend Reinvestment Option
Scroll through the options until you find “Dividend Reinvestment.”
This option is located below “View Account Number.” Tap on it to open the dividend reinvestment settings.
Step 3: Select Your Account and Investments
On the new screen, you will see your account listed at the top.
Below your account information, ETRADE will display all the positions you currently own along with their DRIP status.
Your list may include stocks, ETFs, or other investments. If you only recently purchased your first investment, you may only see one position listed, and that is completely normal.
Each investment will have a checkbox next to it.
To activate dividends on ETRADE for a specific investment, simply check the box next to that position.
How to Enroll All Current and Future Investments in DRIP
Instead of manually selecting each investment, ETRADE also gives you the option to enroll everything at once.
At the top of the investment list, you will see an option that says:
“Enroll current and future securities from this account in DRIP.”
Checking this box will automatically:
- Enroll all your current investments in dividend reinvestment
- Automatically enroll future investments you purchase in the same account
For many beginners, this is the easiest option because you can set it once and allow your investments to continue growing automatically.
How to Submit Your Dividend Reinvestment Request
After selecting the investments you want enrolled, ETRADE will show a confirmation pop-up.
The screen will display the number of positions being enrolled and a purple “Submit” button.
Tap “Submit” to complete your request.
A green confirmation message will appear saying that your request has been submitted.
Keep in mind that ETRADE notes the update may take up to 48 hours to appear in its systems.
This does not mean there is a problem with your account. It simply means ETRADE needs time to process the change.
What Happens After You Turn On Dividends on ETRADE?
Once your DRIP enrollment is active, future dividend payments will automatically be used to purchase additional shares.
You no longer need to manually:
- Receive dividend payments as cash
- Place buy orders yourself
- Decide when to reinvest each payment
Your dividends will continue working in the background, helping your portfolio compound over time.
This is one of the simplest ways to make your investments more automatic.
Reinvesting Dividends Works Best With Regular Contributions
While dividends on ETRADE can help your portfolio grow, reinvesting dividends alone is usually not enough to build significant wealth.
The biggest results come from combining:
- Regular contributions to your account
- Automatic dividend reinvestment
- Long-term investing
Adding new money consistently gives your portfolio more opportunities to grow, while reinvested dividends increase the number of shares you own.
Final Thoughts on Dividends on ETRADE
Learning how to activate dividends on ETRADE is a simple but powerful step for long-term investors. In just a few minutes, you can turn on DRIP and allow your dividend payments to automatically buy more shares.
Once enabled, your investments can continue compounding in the background without requiring constant attention.
For an even more automated approach, consider combining dividend reinvestment with recurring investments on ETRADE, so new money is added to your portfolio automatically every month.
