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Mutual funds are one of the most popular tools of investment.

While investing in mutual funds, investors generally have 3 options to choose from.

They are Growth, Dividend and Dividend Reinvestment.

While in the growth option, there is no payout.

In the dividend payout, the profits are paid out to investors on a regular basis.

In the third option, the dividends that are paid out by the mutual funds, are used to buy extra units of the fund.

Here, even though the NAV decreases, the units increase as the dividend is used to buy 
more units. 

Hence, while the units remain the same in the growth and dividend plan, they increase in a dividend reinvestment plan.

It is very important for investors to decide which plan they want to opt.

Click here to read more about 
dividend reinvestment options.

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What is the dividend reinvestment option in mutual funds?

Mutual funds give three options to investors at the time of investment: Growth, dividend, and Dividend Reimbursement. 

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What is the dividend reinvestment option in mutual funds?

Mutual funds give three options to investors at the time of investment: Growth, dividend, and Dividend Reimbursement.

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