Setting Up DRIPs with Fidelity

I checked one thing off the list below so far, so a quick update in case it can help anyone!

What is DRIP investing?

DRP stands for Dividend Reinvestment Plan, also known as Drip Investing, a very fitting name for what it is. When dividend stocks pay out dividends, a dividend reinvestment plan automatically reinvests the money paid out back into the stock. This allows you to take advantage of dollar cost averaging while increasing your holdings – automatically! And slowly but surely (drip, drip) your wealth hopefully increases.

How to set up dividend reinvesting in your Fidelity Account:

In my Schwab account, when I make a purchase I’m given the option of automatically reinvesting dividends or not when I set up the trade. It’s really easy. However, I couldn’t figure out how to do that with Fidelity and thought maybe it wasn’t an option. I realized this week that there must be a way, and used Fidelity’s handy chat tool to quickly ask a representative. They sent me nice easy instructions, and I’ve now set all my holdings to automatically reinvest. In case you too have been bashing your head against a wall looking for how to do this online, here’s quick and easy instructions:

  1. Hover over “Accounts & Trade” in the top menu bar on the far left.
  2. Select “Update Accounts / Features” from the drop down menu.
  3. Select “Dividends and Capital Gains”.
  4. There will be a list of all your securities. Some of them might already be set up to reinvest (for instance your Fidelity Cash Reserves). For those that aren’t, select “Update” under Action.
  5. Select “Reinvest in Security” instead of “Deposit Into Core Account”.
  6. Now you can also decide whether to apply this to all equity positions currently in the account, and/or future equity purchases.

Then click update and you’re done! Now you can feel like a dunce for not figuring this out sooner ;-)

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