DRIP stands for Dividend Reinvestment Plan — automatically using the cash payouts you receive from an investment to buy more of it, instead of taking the cash. That's what lets a balance compound instead of just collecting payouts on the side. See the glossary for more terms like this.
It's just how often the fund pays out. Most stocks that pay dividends do it quarterly (four times a year) — but a lot of the Canadian covered-call and high-income ETFs this site focuses on pay monthly, and a few pay semi-monthly (twice a month). More frequent payouts don't necessarily mean more total income over a year, but they do mean DRIP reinvestment compounds slightly faster, since your money starts working again sooner after each payout.
A covered call ETF sells the right for someone else to buy its stocks at a set price later, in exchange for extra cash now. That extra cash becomes part of the fund's payout — which is why these funds can show much higher yields than a typical dividend stock. The tradeoff is capped upside: if the stock market shoots up, a covered call fund won't fully participate, because it already agreed to sell at a lower price. Higher income, less room to run.
It's built specifically around the Canadian dividend and DRIP investing landscape — the fund picker's default options are all TSX-listed, and the TFSA guide is Canada-specific. The core math (compounding a starting balance and contributions at an assumed payout rate) isn't tied to any country, though, so the calculator itself works fine with numbers from anywhere — you'd just be entering your own payout rate and frequency manually instead of using the picker.
The compounding math is exact — it's been checked against a private tool that runs the same calculations for real accounts, and the results match. What's an estimate is the fund picker's payout rates, which are periodically updated by hand, not pulled from a live market feed. Every result shows an "as of" date for that reason, and you can always type in your own numbers if you have a more current figure.
Because trying to predict whether a fund's yield goes up, down, or gets cut isn't something any calculator can honestly do. Rather than guess, this one is upfront: it applies whatever rate you enter evenly across the whole projection, and says so directly in the "what this assumes" section next to the results.
Those are hand-researched and periodically checked for accuracy, covering common lower, medium, and higher-risk Canadian options — five lower-risk, five medium-risk, and four higher-risk. Building it this way (instead of pulling from a live financial data API) turned out to be the more realistic option — free-tier market data APIs consistently treat Canadian and TSX-listed fund data as a premium feature, so a hand-maintained list was the more honest choice for a free tool.
You can always type in your own payout rate and frequency manually — the picker is just a shortcut, not a requirement. The Single Fund Calculator's assumptions section links to Yahoo Finance Canada with instructions for looking up any fund's numbers yourself.
The Coffee Shop Theorem is a quick, no-setup "what if" — enter a daily habit cost, see what redirecting it into investing could grow into over 1, 5, and 10 years. The Single Fund Calculator is the real planning tool for one holding: a real starting balance, a real monthly contribution, a chosen payout rate, and either a time horizon or an income goal to solve for. The Portfolio Mix Calculator does the same thing but for as many holdings as you want at once, blended into one combined projection.
Because for most people just starting out, it's the account where investment growth and payouts aren't taxed at all, and it's flexible enough to withdraw from without penalty. See the full TFSA explainer for the details.
No. Everything here is general information and a tool to help you think through the math — not personalized advice for your specific situation. Investing involves risk, including the possibility of losing money. If you want advice tailored to you, talk to a licensed financial advisor.
By default, no — your last-entered calculator inputs are saved in your own browser only, not on any server. If you choose to create a free account, we store your email and whatever calculator settings you save, so they're there for you on your next visit or another device. See the privacy policy for the full details, including how ads work on this site.