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Financial management

Keep your dividends working for you

Stretch the power of your invested dollars by reinvesting dividends in additional shares of the security that issued them.
3 minute read

Points to know

  • Reinvesting dividends is another way to make investing automatic and add to your investment's growth.
  • Take advantage of Vanguard's dividend reinvestment program, which has no fees or commissions.
  • Understand the importance of the record date and ex-dividend date.

Choose to reinvest

When you buy shares of a security, you'll be asked whether you want any dividends transferred to your money market settlement fund or reinvested in more shares.

Select Reinvest to buy additional shares. For long-term investors, reinvesting dividends has several benefits:

  • You don't have to think about investing. It's automatic.
  • You're buying at various prices, averaging out the price per share over the long term.
  • You're compounding your investment's growth by continually adding more shares which, in turn, will generate dividends of their own.

The Vanguard Brokerage dividend reinvestment program

This no-fee, no-commission program allows you to reinvest dividend and capital gains distributions into additional shares of the investment that's making the distribution.

Investments include eligible stocks, closed-end mutual funds, ETFs (exchange-traded funds), funds from other companies, and Vanguard mutual funds held in your Vanguard Brokerage Account.

Get details of our dividend reinvestment program

Important dates

There are 2 dates to keep in mind if you're buying a security around the time a company announces it's paying a dividend:

  • Record date: You must be a shareholder on the record date set by the company to receive a dividend.
  • Ex-dividend date: In addition, you must complete your purchase before the ex-dividend date to receive a dividend.

Companies set these dates to make sure they pay dividends to investors who actually own shares of the company's stock.

Find out why you should avoid buying the dividend

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All investing is subject to risk, including the possible loss of the money you invest.