Investing Simple Logo
Get 1 Free Stock Worth Up To $200 From Robinhood!
Sign up with Robinhood, deposit any amount and get 1 Free Stock. It takes less than 3 minutes to sign up and claim your Free Stock Bonus.
Earn 5.00% APY with M1 High-Yield Savings Account
M1 Plus members can earn 5.00% APY on their deposits with no minimum balance required.
Webull free stock promotion
Get Up To 5 Free Stocks From Webull
Open a new Webull brokerage account today and deposit any amount of money to receive 5 free stocks. Webull offers commission free stock, ETF, option and crypto trading.
Written by Cari Scribner on March 26, 2023
FTC Disclosure: Some of the links on this site are affiliate links. Read our full disclaimer here.

What Happens With Dividends On Robinhood?

Dividends are one of the most rewarding parts about investing.

By providing a consistent income stream, it's even possible to generate enough cashflow to allow you to retire early with dividends.

By picking winning dividend stocks, you can benefit from the growth of the share price over time while being rewarded with regular payments in the form of dividends.

Or, you could take a more passive approach and invest in a high dividend yield index fund. This gives you built in diversification.

Robinhood is one of the most popular investing apps available today. You may be wondering how dividends are handled with Robinhood. Here's what happens when you earn dividends in your Robinhood account as well as where they end up going!

Best Free Stock Promotions

Robinhood LogoGet 1 Free Fractional Share Worth $5 To $200Download
Webull LogoGet Up To 12 Free Fractional SharesDownload
Moomoo LogoGet 5 Free Stocks When You Deposit $100+Download
Acorns LogoGet A $20 Bonus When You Invest $5+Download

What Happens With Dividends On Robinhood?

If you own dividend stocks, you will likely earn a dividend on a quarterly basis. Most companies and funds pay out dividends at this frequency. However, some dividend stocks such as "O" pay them out every single month.

You have two options for what to do with dividends when they become available to you on the Robinhood platform:

  1. Take the cash payment
  2. Reinvest the dividend

There’s always the option to pull the money out of your account as cash. But ask yourself, is there a chance you will blow it all on Friday night dinner and drinks? Is it even enough to cover that?

The wiser option in many cases is to reinvest the money.

Robinhood has set up a functionality to reinvest your dividends automatically if you wish. However, by default, your dividends will go to your cash balance within your Robinhood account. You may want to consider reinvesting to maximize compound interest.

Dividends will be paid at the end of the trading day on the designated payment date.

Robinhood's Dividend Reinvestment (DRIP)

If you use the dividend reinvestment feature, dividends earned will be reinvested back into the issuing stock. Robinhood will purchase fractional shares of the stock or ETF, so you don't need to worry about the share price.

On the app, all you have to do is turn on Dividend Reinvestment Plan or "DRIP" for short.

Here's how to enable dividend reinvestment on the Robinhood app:

  1. Go to the account tab by clicking on the person icon
  2. Tap on the 3 bar icon in the top left
  3. Click on "Investing"
  4. Scroll down until you see "Dividend Reinvestment"
  5. Tap on "Enable Dividend Reinvestment"

To turn the feature off, you would follow steps 1-4. You would then tap on "Edit Dividend Reinvestment" and turn off the toggle if desired.

You can also turn off dividend reinvestment for certain stocks while leaving the feature turned on for other stocks. When you tap "Edit Dividend Reinvestment," you can switch off the checkmark for certain stocks in your portfolio.

Robinhood Free Training Shortcode (#8) (#9)

Robinhood Free Training

We put together a free 30 minute video training that walks you through the entire process, step by step. This training will help you get up and running in no time at all.


What Stocks Are Eligible For Dividend Reinvestment?

Any stocks or ETFs eligible for fractional shares are also eligible for dividend reinvestment. 

Dividend payments will be split based on the fraction of shares owned, then rounded to the nearest penny.

Robinhood will reinvest your dividends on the trading day after the dividend pay date. You will get a notification letting you know when your dividends have been reinvested.

At this point, you'll own more fractional shares in that stock and will see a compounding effect on your returns if you continue reinvesting.


You basically have two options when it comes to earning dividends on Robinhood:

  1. You can take the cash and withdraw it or invest it on your own
  2. Or, you can use the dividend reinvestment plan, as long as you have fractional shares enabled

Robinhood’s dividend reinvestment plan is a sound way to put your dividends back to work for your portfolio.

Don't forget to grab your free stock worth up to $200 from Robinhood today!

Article written by Cari Scribner

Read more

Power Your Investing

Choosing the right product and service is essential for your investing. Here are some of the tools and services to help your portfolio grow.
Robinhood provides an easy-to-use free trading platform for beginner investors. Robinhood has $0 account minimums. Get a free stock when you open an account below.
Try Robinhood
M1 Finance
M1 Finance offers a free investing platform where users can build portfolios of stocks and ETFs. Users can also choose from a variety of pre-built portfolios offered for free.
Try M1 Finance
Passively invest in private real estate deals with as little as $10. Fundrise allows you to own residential and commercial real estate across the U.S. starting at a 1% annual fee.
Try Fundrise
Copyright © 2018 – 2023 Investing Simple LLC. All Rights Reserved.
Investing Simple is a financial publisher that does not offer any personal financial advice or advocate the purchase or sale of any security or investment for any specific individual. Members should be aware that investment markets have inherent risks, and past performance does not assure future results. Investing Simple has advertising relationships with some of the offers listed on this website. The information on Investing Simple could be different from what you find when visiting a third-party website. All products are presented without warranty. For more information, please read our full disclaimer.
Website managed by Stallion Cognitive™

Get 1 Free Stock Worth Up To $200 From Robinhood!

Don't Miss This Opportunity!

Investing Simple readers can claim a free stock from Robinhood worth up to $200 when they open a brokerage account and deposit any amount.

For US Residents only. Investing Simple is affiliated with Robinhood, and we may earn a commission when you sign up for Robinhood.

linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram