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Investing strategies

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 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.

Vanguard's advice services are provided by Vanguard Advisers, Inc. ("VAI"), a registered investment advisor, or by Vanguard National Trust Company ("VNTC"), a federally chartered, limited-purpose trust company.

The services provided to clients will vary based upon the service selected, including management, fees, eligibility, and access to an advisor. Find VAI's Form CRS and each program's advisory brochure here for an overview.

VAI and VNTC are subsidiaries of The Vanguard Group, Inc., and affiliates of Vanguard Marketing Corporation. Neither VAI, VNTC, nor its affiliates guarantee profits or protection from losses.