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Subject:  Re: Roth IRA acct and safekeeping fees Date:  10/4/2013  3:00 PM
Author:  joelcorley Number:  73421 of 78166


You wrote, As I said earlier I am a bit confused with dividends and how they are handled. Though it appears at first glance that TD would give me the ability to reinvest the dividends at low to no cost, provided I accumulated enough to invest them back in; though I could use that as a reason to contribute more to the account.

TD Ameritrade's in-house DRiP (Dividend Reinvestment Program) - like most broker's in-house DRiPs - lets you sign up to have individual stocks (or all future stock purchases) reinvest their future dividends at no additional cost to you. This is typically done by assigning you fractional shares - the only way most brokers will sell you fraction shares of an exchange-traded security.

The purchase is done at the discretion of the broker on the day the dividends or interest payment (some issues pay dividends that are treated as interest) are credited to your account. This is usually done the afternoon after the pay-date. TD Ameritrade will credit your cash account with the income, then deduct it for the purchase - not necessarily in that order, BTW. The additional shares will then appear in your stock positions.

There are two important dates for dividends. There is the date of record (or record date) and the date of payment