Reinvestment Preferences

Reinvestment Options for Cash Dividends and Capital Gains Distributions

For each stock, ETF, and mutual fund you own, you can choose whether cash dividends and capital gains distributions are reinvested in the same security (at no charge) or paid out in cash.

Just follow the instructions below to get started:

Go to Accounts > Portfolio > Dividend Reinvestment (sign in required). Click Edit next to a security to make changes to its reinvestment settings.

If you want your cash dividends and capital gains distributions to be the same for all of your stocks, ETFs or for all of your mutual funds, you can change them all at once with a single click of the button:

  1. Under `Stocks & ETFs', click Edit all if you want to change the settings for all of your stocks and ETFs
  2. Under `Mutual Funds', click Edit all if you want to change the settings for all of your mutual funds

Keep in mind that not every stock, ETF, or mutual fund pay a dividend. Also, while mutual funds often do have capital gains, it is very rare for a stock or ETF to have capital gains.

If you'd like to look at the cash dividends and capital gains distributions that have posted to your account (and any reinvestments if you've chosen this option), click on Accounts > Transaction History (sign in required). You'll see the following codes for these postings in your transaction history:

  • Cash dividend – DIV
  • Dividend reinvestment – DRV
  • Short-term capital gains distribution – CGS
  • Long-term capital gains distribution – CGL
  • Capital gains reinvestment – DRV

Dividend reinvestments show up in your transaction history, but will not generate a trade confirmation.

Stocks and ETFs – Reinvestments
If you choose to have your cash dividends and capital gains distributions reinvested, any reinvestment will take place on the payable date at the previous day's closing price.

Mutual Funds – Reinvestments
If you choose to have your cash dividends and capital gains distributions reinvested, any reinvestment will be based on the "ex-date" closing price.

Tip: One-time special cash dividends will not be reinvested, even if you have chosen to reinvest cash dividends.

Dividends and Capital Gains Options

For each stock, ETF, or mutual fund you own, you can choose whether to reinvest cash dividends and capital gains distributions into more shares, or receive a cash payment.

Automatic Investments
When you buy a stock, ETF, or mutual fund for the first time in your Automatic Investment Plan, the new position will be set to reinvest cash dividends and capital gains distributions by default.

Mutual Fund Trades
Whenever you invest (by placing an order to buy or exchange into) in a mutual fund that you currently don't own, you'll be asked to choose how you want your cash dividends and capital gains distributions handled.

You can make any changes to how cash dividends and capital gains distributions are handled for securities you already own by going to Accounts > Portfolio > Dividend Reinvestment (sign in required). Click Edit next to a security to make changes to its reinvestment settings.

Tip: Please keep in mind that not every single stock, ETF, and mutual fund pays a dividend. Also, while mutual funds often have capital gains, it is very rare for a stock or ETF to have capital gains distributions.

Dividend Dates

When a stock, exchange-traded fund (ETF) or mutual fund pays a dividend, there are a few important dates that you should know about:

  • Announcement Date – When the Board of Directors tells the public about an upcoming dividend
  • Ex-Dividend Date – Meaning “after dividend,” you must buy the security before this date or sell on or after this date to receive the dividend
  • Payable Date – When the dividend is paid by the company and arrives in your account

We reinvest dividends from stocks and ETFs on the payable date at the previous business day’s closing price. We reinvest dividends from mutual funds on the payable date, at the closing price of the ex-dividend date.