DRIP stands for Dividend Reinvestment Plan. It's a voluntary election that you can opt-in for cash distributions, such as dividends, to be reinvested into shares. DRIP is a valuable feature for long-term investors to compound and grow their long stock and ETF positions. Since a dividend payment may not be enough to purchase a whole share, they can result in fractional shares too. There are no commissions or fees to enable or disable DRIP.
TABLE OF CONTENTS
- How do I enroll for DRIP?
- How to Opt-out of DRIP?
- View dividend and DRIP history
- How are DRIP shares displayed?
- How to close out of fractional shares
- DRIP on Monthly Statements
- Security Level DRIP
How do I enroll for DRIP?
First, your account must have a fully-settled DRIP eligible security to enroll. Equity stock and ETF opening trades take 2 business days to settle. DRIP elections must be made no later than the day before the ex-dividend date for automatic reinvestment to process. DRIP elections made on or after the ex-dividend/record date will NOT automatically reinvest, and the dividend will remain as cash. However, DRIP will apply to future dividend payments.
Next, log into manage.tastyworks.com and then navigate to MY PROFILE -> DIVIDEND REINVESTING. You will then be presented with the page below. Click on the REQUEST OPT IN button to submit your DRIP enrollment request.
Once clicked, the request button will turn gray and your Opt-in request will begin processing. Opt-in requests take at least 1 business day to process and complete. Once complete, you will see the messaging "you are currently opted in" on this same page.
How to Opt-out of DRIP?
To opt-out of DRIP navigate to the dividend reinvesting page by logging into manage.tastyworks.com and then click on MY PROFILE -> DIVIDEND REINVESTING. Click on the 'REQUEST OPT OUT' button to submit an opt-out request.
Example of DRIP opted-in account page
While your request is processing, you will also have the option to cancel the request and stay opted-in.
Example of DRIP opted-out request processing
Opt-out requests take 1-2 business days to process and complete. Once your account is opted out of DRIP your page will update to the image below.
Example of DRIP opted-out account page
How are DRIP shares displayed?
Whole and partial shares from a dividend reinvestment will appear on your platform.
For illustration purpose only: example of DRIP shares with fractionals displayed on the Positions tab.
View dividend and DRIP history
When DRIP is applied and a dividend is paid, the cash dividend will display in your History tab. The reinvested dividend will appear immediately above the cash dividend as a debit, and reinvested shares will appear on your platform after the dividend payment date. Our clearing firm will reinvest the shares at the average price of shares purchased in the market on the dividend payment date.
Example of a DRIP transaction in the History tab on the desktop trading platform.
How to close out fractional shares
If you decide to close your entire position, you may only close whole shares and exclude any fractional (decimalized) shares from your closing order. You can find more details in this link here.
DRIP on Monthly Statements
You can refer to the Portfolio Summary section of your monthly statement to see which positions have DRIP applied. Any positions enrolled in DRIP will list an asterisk (*), as outlined in the screenshot below. For customers with DRIP applied on an account level, you will see an asterisk list for every stock or ETF, even if the underlying does not pay a dividend.
Example of a monthly account statement displaying positions with DRIP enabled.
It is important to note that some underlyings have DRIP automatically applied even if you did not opt-in. Please check with the underlying's investor relation site for more information.
Security Level DRIP
You can apply DRIP on a portfolio or position basis. To enable or disable DRIP on a position basis please reach out to us at email@example.com and we will manually process your request.