Fractional shares?

Hi Gabbi.

Great question. In Australia, the excess money that is leftover after a dividend reinvestment (where there’s not enough for a whole share), is typically put aside until there is enough for a whole share to be acquired.

Some people don’t mind this. But other people find this annoying. If that’s the case, you could always switch to receiving the dividends to your bank account and add that money towards your next purchase :)

Hope that helps.
Dave

When dividends are funneled back into a dividend reinvestment plan (DRIP), the received funds are utilized for acquiring extra shares of the company’s stock. In cases where the dividend doesn’t cover the cost of a full share, the fractional portion is generally retained by the plan administrator until it accumulates to a point where a whole share can be purchased.