A common question: How do I get my dividends to reinvest?
While this blog posts continually about dividend reinvestment, the mechanism to actually put it in motion is not always obvious. Here are some ways:
If you own stock though the transfer agent and the stock is registered in your name, you can easily determine if you have the ability to set dividend reinvestment in motion. If you do not find the ability to turn on dividend reinvestment on the transfer agent website, then you can either check through the company stock information (plan documents), or give the transfer agent a call. In many cases, dividend reinvestment is available by clicking a checkbox.
However, there are times that the company and/or the transfer agent do not have a dividend reinvestment option. Then what to do?
How to Dividend Reinvest Even If a Company does not have a Reinvestment Plan
But what happens if you have some stock in company that does not have such a plan, but you still wish you could dividend reinvest?
As it happens, some brokers will have the option for you to reinvest dividends. For example, Fidelity is one that does this, numerous others do as well. In this era of no-commission investing, dividend reinvestment is usually without a commission charge.
Again, in many cases, dividend reinvestment is available by clicking a checkbox. If you don’t see it, give your broker a call.
So you can get the best of all worlds: no commissions to invest, and no commissions on dividend reinvestment.
So if your broker allows you the option to dividend reinvest, with each dividend received, additional shares or parts of a share, will be added to your account.
Do you reinvest dividends? Tell me about it here.
The illustration is from “Der naturen bloeme” (The Flower of Nature) by Jacob van Maerlant, published in Dutch in 1350. It contains illustrations of ‘homines monstruosi’, strange races that were said to live in distant lands. Among them are cannibals and cyclopses, and people with only one leg and feet so large that they could be used as a parasol. Courtesy National Library of the Netherlands.
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