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StrangeBrew
LSU Fan
Salvation Army-Thanks Obama
Member since May 2009
12975 posts

Has the FlexibleRIP made the DRIP obsolete?


I just signed up for this program with Scottrade. Looks like it takes away the paying of commissions when reinvesting which was the beauty of the DRIP.

quote:

A typical brokerage DRIP requires you to reinvest dividends from a dividend-paying security back into that same security. However the Flexible Reinvestment Program™ lets you invest dividends into up to five different eligible securities
. The chart below provides a quick review of the differences between FRIP™ and DRIP.


quote:

Feature
FRIP™
Typical Brokerage DRIP

Commission-free reinvesting
Yes
Yes

Automatic Reinvesting
Yes
Yes

Pool of Accumulated Dividends
Yes. All designated dividend-paying securities feed into the pool
No. Dividends paid by a security can be invested only in that same security

Reinvest in Most Stocks or ETFs, Including Non-Dividend Securities
Yes
No


Flexible Allocation Percentage
Yes
No

Flexible Reinvestment Date
Yes. Date to invest funds can be altered at any time
No. Reinvest occurs only after a security pays a dividend

Fractional Shares
No. Only whole shares purchased
Yes








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Vols&Shaft83
Tennessee Fan
Member since Dec 2012
8706 posts

re: Has the FlexibleRIP made the DRIP obsolete?


Not obsolete because of

quote:

Fractional Shares No. Only whole shares purchased Yes


But it definitely gives the DRIP some serious competition.






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Volvagia
LSU Fan
Baton Rouge
Member since Mar 2006
39880 posts

re: Has the FlexibleRIP made the DRIP obsolete?


quote:

No. Only whole shares purchased


Deal breaker.

Especially as pretty much all of my trades are commission free anyway, I might as well just dump the dividends into a sweep fund and allocate myself.






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StrangeBrew
LSU Fan
Salvation Army-Thanks Obama
Member since May 2009
12975 posts

re: Has the FlexibleRIP made the DRIP obsolete?


The other thing that jumps out at me is the money will be accumulated in a reinvestment pool. This pool will not earn any interest. They will be able to use this pool of money until it is needed to purchase shares in your account monthly or quarterly or whatever time frame you choose. The have a pool of free money to utilize in exchange for commission free trades.





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matthew25
Ole Miss Fan
Member since Jun 2012
3275 posts

re: Has the FlexibleRIP made the DRIP obsolete?


Do it monthly. You are only missing out on .01 earnings on an annual basis.





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