Login to your Shareview portfolio account. More information. Open Portfolio Account. Login to Portfolio. ISAs and investment accounts are now on EQi. To access your account, please log in on EQi. Open an EQi account. Login to your EQi account. Dividend Reinvestment Options. Companies that offer Dividend Reinvestment Options. Separate elections are required for each shareholding. For individual and jointly held shareholdings, elections are applied to the entire holding.
For your own benefit you should read and retain the relevant Terms and Conditions carefully before submitting your application as they form the basis of the services that will be provided. If you do not understand any point please contact us using the contact details on this page.
In order to participate in respect of a particular dividend, elections must be received by the last day for election details available in the relevant Terms and Conditions or by contacting us , otherwise your election will be applied to subsequent dividends. Need more help? Investors can usually enroll in an automatic dividend reinvestment program through their brokerage account.
They should be able to find this feature in their account settings menu. Once it's selected, investors usually have the following options:. Investors who chose to automatically reinvest all their current and future dividends will have a truly automated experience.
This program will add new stocks or funds to the plan as soon as they enter the portfolio. Likewise, when a company initiates a dividend, it will automatically get reinvested since the initial enrollment covers all current and future dividend payers. However, if an investor enrolls only their current stocks or a portion of their portfolio in the plan, they will have to add new ones manually. Because of that, they need to carefully consider whether they want the convenience of full automation or to retain some control over how they allocate a portion of their cash dividends.
There are many reasons why investors might consider reinvesting their dividends. It's easy to set up, usually commission-free, typically allows the purchase of fractional shares, and enables investors to put cash to work quickly. However, the best reason to consider automatic dividend reinvestment is to benefit from the miracle of compounding.
That return is the price growth only, as it assumes no dividends. However, adding in dividends changes the equation dramatically. Given that much higher return potential, investors should consider automatically reinvesting all their dividends unless:.
Cash dividends are usually taxable even if investors reinvest that money automatically through their brokerage account or via the company's DRIP. However, tax rates can vary significantly depending on the type of dividend paid qualified or non-qualified and an investor's taxable income.
In addition to qualified dividends earned by investors in the lowest income bracket, another type of payout that isn't taxable is those paid in stock by companies that don't give investors an choice between cash and stock. In a case like that, investors usually don't need to pay taxes on the stock dividend until they sell.
Most investment brokers make it easy for an investor to reinvest all their dividends by setting up an automatic reinvestment plan. However, investors can also opt to participate in DRIPs offered directly by a dividend-paying company. These programs provide similar benefits to those offered by brokers since many are commission-free and enable investors to buy fractional shares.
In addition to that, some companies sell shares via their DRIP program at a discount to the current market price. Most DRIPs allow investors to buy shares commission-free or for a nominal fee, and at a significant discount to the current share price ; they may set dollar minimums. While DRIPs are usually intended for existing shareholders, some companies do make them available to new investors, usually specifying a minimum purchase amount.
Although the shareholder does not actually receive the reinvested dividends, they still need to be reported as taxable income unless they are held in a tax-advantaged account, like an IRA. There are several advantages of purchasing shares through a DRIP, for both the company issuing the shares and the shareholder.
DRIPs offer shareholders a way to accumulate more shares without having to pay a commission. Between no commissions and a price discount, the cost basis for owning the shares can be significantly lower than if the shares were purchased on the open market.
Through DRIPs, investors can also buy fractional shares, so every dividend dollar is really going to work. Long term, the biggest advantage is the effect of automatic reinvestment on the compounding of returns. When dividends are increased, shareholders receive an increasing amount on each share they own, which can also purchase a larger number of shares. Over time, this increases the total return potential of the investment. Because more shares can be purchased whenever the stock price decreases, the long-term potential for bigger gains is increased.
Dividend-paying companies also benefit from DRIPs in a couple of ways. First, when shares are purchased from the company for a DRIP, it creates more capital for the company to use. Second, shareholders who participate in a DRIP are less likely to sell their shares when the stock market declines. Partly that's because participants tend to be long-term investors and recognize the role their dividends play in the long-term growth of their portfolio.
Of course, another factor is that DRIP-purchased shares are not as liquid as shares purchased on the open market—they can only be redeemed via the company. Administered by the company's transfer agent, EQ Shareowner Services, it gives registered shareholders the option of using all or a portion of their dividends designated either by dollar percentage or by number of shares to buy shares; if they don't choose an option when they enroll in the plan, all their dividends will be reinvested.
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