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Has anyone ever used the DRIP option offered by Etrade? I'm new to the investing world and found out about DRIP's in about March of 1998. I'm been experimenting with different ways to set them up mostly just to figure out how they work. I have a brokerage account at Etrade.

They have a program for DRIPS for DOW stocks. I'd like to know what you guys think. I bought 4 shares of MO and followed the directions below to enroll in the DRIP. I'm thinking that once Etrade enrolls these four shares I could send in OCP's. I copied some of the info from their Learning Center below:

"If you hold positions in any of the Dow 30 companies and you want to take your dividends in stock rather than in cash, you can enroll in the Dividend Reinvestment Plan (DRIP). Under this plan, when the company whose stock you hold pays out a dividend, you can reinvest that dividend in the company, thereby receiving more shares or partial shares. It's a simple, free way to buy more stock in a company that you already hold.

Soon we'll make the program available for other securities. Stay tuned!

You can enroll for each and every position you hold in the Dow 30 stocks. You can enroll no matter how many shares you hold. However, enrolling means that all the shares for a stock become enrolled. You can't split your investment in a company and enroll only part of the shares in the DRIP.

Your stock will be part of the DRIP program as soon as we process your request. The dividends will continue to be reinvested until you tell us you want to withdraw from the program. We'll send you an Account Alert message confirming that your position is enrolled. Once you've enrolled in DRIP for a stock, subsequent purchases of the same stock are automatically enrolled in the DRIP program - even if you've sold all of your holdings in a stock and buy it again later.

Important information about timing. To reap the benefits of DRIP for any particular holding:

the shares must have settled in your account by the dividend record date (that means you must have bought them at least four days before the record date)

and you must have enrolled the shares at least three days prior to the dividend record date. For more information, see Find out the record and payable dates for dividends, below.

Dividends are not pro-rated based on how long you own shares.

How to enroll. To enroll in DRIPs, go to the Service Center. Select Move Your Money and Securities, then select Setting up and using DRIPs. From there, just fill out the form and click Submit.

When you get the stock. When the market opens on the day that the dividends are payable, your dividends will be reinvested in the stock when we purchase shares or partial shares equal to the dividend cash amount that you would otherwise receive.

What you pay for it. The share purchase price will be the opening price on the payable date. Dividend activity always appears on your account statement.

Where to look for dividends. Purchases of whole shares will be included in your Account Positions on the day following the purchase. Unfortunately, fractional shares won't appear in your online portfolio or in account positions; they will appear on the account statement that you receive in the mail.

How to
Find out the record and payable dates for dividends
Here you can find out what the dividend or split type is, how much it will be, what the record and payment dates are, and the ex-dividend date (also called the x-date, this is the date by which you must own the stock to be eligible to receive a dividend). You can search for dividend and split announcements based on dates or symbols, or you can get a list of announcements for stocks in your system portfolio.

Select Stocks & Options, then select Dividends & Splits.

To get the dates for a particular stock:

In the middle section of the page enter the stock symbol, for example, EGRP.

Enter a date from which you want a list of all the announcements made by the company regarding dividends and splits. For example, 010198. You'd get a list of all the dividend or split announcements made by the company since January 1, 1998 up to today.

To get the dates for the stocks in your system portfolio:

In the bottom section of the page, enter the date from which you want a list of all the announcements made by each company regarding dividends and splits.Sell fractional shares of a stock
Generally, you won't have fractional shares in your account - unless you've enrolled in the Dividend Reinvestment Plan (DRIP). At some point you may want to sell a position that includes fractional shares, and there's a special way to do this. E*TRADE liquidates the partial shares for you, without charging you a commission on the trade.

Note! We want both the trade of the whole shares and the liquidation of the partial shares to execute at the same price. That will happen if you place both orders within five days of each other. That is, if you place your request to sell the partial shares within five days of having sold the whole shares. To sell your fractional shares, the order to sell the whole shares must have executed, because you need to know the price they sold at.

First, place an order to sell all of the whole shares in your position. Select Trading, and then under Stocks, select Enter Order. If you need more information about placing an order, see Enter a Stock Order in the Learning Center.

Having placed the order to sell all of your whole shares, now go to the Service Center to request to sell the fractional shares.

Select Move Your Money and Securities, and then select Sell Fractional Shares.

Fill in the form with your contact information, the security (or securities) you want to sell the fractional shares of, and the date you placed the order to sell the rest of the shares. Most importantly, enter the price at which your whole shares sold.

Click Submit Request.

Cancel participation in DRIPs
Once you've enrolled a security to be in the Dividend Reinvestment Plan (DRIP), you can also withdraw from the program. To cancel participation in DRIPs for a security, go to the Service Center. Select Move Your Money and Securities, then select Setting up and using DRIPs. From there, just fill out the form for the DRIPs you want to remove, and click Submit."

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