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Learning, Sharing, and Teaching => Investor Alley => Topic started by: xander on July 19, 2017, 12:28:18 PM

Title: Question on Vanguard dividend reinvestment.
Post by: xander on July 19, 2017, 12:28:18 PM
Hello all,

After a successful first thread here that informed me with many things to get to my goal of FI, I have opened up my Vanguard account! Very excited needless to say. I have purchased VTSAX and have chosen to have my dividends and capital gains reinvested. Just three days later a dividend payment showed up in my settlement fund. $4.93...woohoo!

So onto my (noob) question. The $4.93 has been sitting in my settlement fund for two days now and I was sort of expecting it to be transferred back into my brokerage account. In my current scenario, do the dividends stay in this settlement fund until the balance is high enough to purchase another share of VTSAX? Or does it get reinvested at a certain time period after it's been distributed to me?

Thanks!
Title: Re: Question on Vanguard dividend reinvestment.
Post by: seattlecyclone on July 19, 2017, 12:39:09 PM
Vanguard reinvests mutual fund dividends the same day. If you saw cash show up in your account, that means you did not experience an automatic dividend reinvestment. Manually reinvest this one, and double-check your settings for future dividends.
Title: Re: Question on Vanguard dividend reinvestment.
Post by: xander on July 19, 2017, 03:28:23 PM
Thanks for the reply Seattle.

I updated my distribution elections. Now the area by settlement fund shows "Reinvest" instead of "N/A"...not available I presume.

That has fixed the issue, but as you said I still need to reinvest the $4.93 back into VTSAX. I need to look up how to do this.
Title: Re: Question on Vanguard dividend reinvestment.
Post by: smallstache on July 19, 2017, 06:35:04 PM
Just place a buy order for that amount.  Set it tonight and Vanguard will execute it at tomorrow's price.
Title: Re: Question on Vanguard dividend reinvestment.
Post by: TheAnonOne on July 20, 2017, 09:37:57 AM
Just place a buy order for that amount.  Set it tonight and Vanguard will execute it at tomorrow's price.

^This

Though, make sure you get it working! You'd hate to forget about it for a few years!
Title: Re: Question on Vanguard dividend reinvestment.
Post by: frugalcanuck on July 21, 2017, 02:40:43 PM
Where my current investments are, they do not allow DRIPs (dividend reinvestment plan) with Vanguard products.  I am thinking of transferring from my banks investment house to Questrade because they have free etf purchases.  I am hesitant because it has no bricks and mortar buildings but it will be much cheaper in the long run.
Title: Re: Question on Vanguard dividend reinvestment.
Post by: Retire-Canada on July 23, 2017, 09:45:12 AM
Where my current investments are, they do not allow DRIPs (dividend reinvestment plan) with Vanguard products.  I am thinking of transferring from my banks investment house to Questrade because they have free etf purchases.  I am hesitant because it has no bricks and mortar buildings but it will be much cheaper in the long run.

I have $750K with QT. No issues and no concerns or fears. The free ETF buys are nice.