Back
Dividend Reinvestment Plan (DRP) versurs manually reinvesting: which option is cheaper?
Dividends and Tax
Hi there, I’m currently using Dividend Reinvestment Plans through Computershare to automatically reinvest my dividends, but I’m considering having dividends paid into a cash account and manually reinvesting them instead. Which option is cheaper in terms of fees? I don’t mind the extra step of manual reinvesting if it saves on costs, but if fees are similar, I’d prefer the simplicity of DRP. Any advice would be appreciated! Thanks!
21 views
Share
0 likes
Isabella O'Conner
Asked on 23 September 2024
Comments (2)
Sign in to add a comment
Hi Isabella,
It depends how you do it.
If you take the dividends in cash and then reinvest by buying more shares as a separate transaction, then you will pay brokerage for that.
But if you take the dividends in cash and simply use it towards your next investment and combine it with your regular savings, then it makes no difference – you were going to pay brokerage on the next purchase anyway. So it’s the same in that regard, no cheaper or more expensive than DRP.
I personally just take the cash and put it towards my next purchase, but either method is fine.
Cheers, Dave
Reply
1 like
Great points Dave, Just to add, our Automate tool has some pretty powerful ways to track and allocate your dividends too – so you can add your unique Pearler account at the share registry and through certain references, it tells us where you want the cash to be stored or used towards your next purchase. No more manually logging in to transfer random amounts 😀
Reply
0 likes