Case Study: Broker speed of dividend payments

[urban]

The Fidelity rep told me the shares were bought 9/25.

[livesoft]

The Fidelity rep told me the shares were bought 9/25.

Let me ask you this: What is the "Date Acquired" shown in your account for those shares if you end up selling them in the future?

[sailaway]

The Fidelity rep told me the shares were bought 9/25.

Let me ask you this: What is the "Date Acquired" shown in your account for those shares if you end up selling them in the future?

Thank you: so many seem to be talking about what they heard or when they can see the transaction online. What really matters is the date acquired.

[retiringwhen]

I own VTV (Vanguard Value ETF) in both Fidelity and Vanguard brokerage accounts with dividend reinvestment turned on.

Both brokerages date the reinvestment acquisition date as 9/26. Interestingly, the prices point to different purchase days by the broker.

Vanguard purchased at $139.25
Fidelity purchase at $139.67

Prices for the 26th as reported at Marketwatch.com: Opened at $139.38 (daily high) and closed at $138.39 with a low of $138.25 .
OTOH, for the 25th, it opened at $139.30 closed at $140.12 (daily high) and the low was $139.17.

[urban]

The Fidelity rep told me the shares were bought 9/25.

Let me ask you this: What is the "Date Acquired" shown in your account for those shares if you end up selling them in the future?

Portfolio Activity & Orders screen:

Sep-26-2023
REINVESTMENT VANGUARD INDEX FDS VANGUARD TOTAL ST... (VTI) (Cash)
Date 09/26/2023
Symbol VTI
Symbol Desc. VANGUARD INDEX FDS VANGUARD TOTAL STK MKT ETF
Type Cash
Shares +2.592
Price 213.75
Amount -$553.97

However, in Portfolio Positions > Purchase History:

Acquired: 2023-09-25

I guess the date on the record for this lot would be 9/26. But then it is IRA account, so it is not really important.

[livesoft]

A dividend from DGS that was payable today appeared today in my Schwab account before the market closed, so I had enough time to do something with the money.

So at least this past week AVUV and DGS dividends were timely by Schwab, but VTI dividends were a day later than other brokerages.

[rkhusky]

The Fidelity rep told me the shares were bought 9/25.

Let me ask you this: What is the "Date Acquired" shown in your account for those shares if you end up selling them in the future?

Portfolio Activity & Orders screen:

Sep-26-2023
REINVESTMENT VANGUARD INDEX FDS VANGUARD TOTAL ST... (VTI) (Cash)
Date 09/26/2023
Symbol VTI
Symbol Desc. VANGUARD INDEX FDS VANGUARD TOTAL STK MKT ETF
Type Cash
Shares +2.592
Price 213.75
Amount -$553.97

However, in Portfolio Positions > Purchase History:

Acquired: 2023-09-25

I guess the date on the record for this lot would be 9/26. But then it is IRA account, so it is not really important.

If this was in a taxable account and involved with a wash sale or there was a question of long term vs short term gains, the exact date might be relevant. I would go with the acquisition date of 9/25, and the price doesn’t fit 9/26.

[urban]

The Fidelity rep told me the shares were bought 9/25.

Let me ask you this: What is the "Date Acquired" shown in your account for those shares if you end up selling them in the future?

Portfolio Activity & Orders screen:

Sep-26-2023
REINVESTMENT VANGUARD INDEX FDS VANGUARD TOTAL ST... (VTI) (Cash)
Date 09/26/2023
Symbol VTI
Symbol Desc. VANGUARD INDEX FDS VANGUARD TOTAL STK MKT ETF
Type Cash
Shares +2.592
Price 213.75
Amount -$553.97

However, in Portfolio Positions > Purchase History:

Acquired: 2023-09-25

I guess the date on the record for this lot would be 9/26. But then it is IRA account, so it is not really important.

If this was in a taxable account and involved with a wash sale or there was a question of long term vs short term gains, the exact date might be relevant. I would go with the acquisition date of 9/25, and the price doesn’t fit 9/26.

Yes, I think you are correct.

[indexfundfan]

Can anyone tell me how soon does Schwab post the coupon payments from treasury note and bonds? Might the speed be different from that of dividends from ETFs?

Also, on bond maturity, does Schwab post the credit in the morning?

I'm thinking of moving my treasury purchases from Fidelity to Schwab for its better bond prices.

[sycamore]

I recently transferred a Roth IRA to Robinhood. It has two ETFs in it: VBR and VTI. I elected to reinvest distributions.

VBR Record date is 3/22. On 3/22 Robinhood showed that I had a dividend amount pending. It showed a little timeline with payable date of 3/26 and reinvestment of 3/27.

On 3/26, a portion of the timeline was highlighted in to indicate the payment had happened, and reinvestment was still pending.

I didn't check on 3/27 but on 3/28 the timeline was fully marked to indicate everything was completed. And it said on 3/27 my reinvestment order was filled at 10:32 at 189.03/sh. Alas, the price had gone up quite a bit from 9:30 to 10:32. C'est la vie.

With VTI it was similar except its Record date is 3/25 and Payable date is 3/27 and reinvest date on 3/28.
My reinvestment order was filled at 10:30 at 260.02/sh

[livesoft]

I recently transferred a Roth IRA to Robinhood. It has two ETFs in it: VBR and VTI. I elected to reinvest distributions.

[...]

Thanks for the report on Robinhood. That's sounds good to me since for VBR and VTI as reinvest date was day after payable date. I usually get dividend in cash on payable date and can manually reinvest a day sooner (on that payable date) that folks who have automatic reinvest turned on.

[livesoft]

Now that I have a Schwab account I can compare it to others. Today's comparison is the monthly BND dividend which is payable today April 4, 2024.

TDAmeritrade notes the dividend in my account about 90 minutes into the day and well before the market open. I can manually reinvest at the market open:


So far nothing in my Schwab account. I will update this comment as soon as I see something there and will try to check often.
Update: Schwab shows the dividend payment after the market close and too late to use it on the payable date. This was what I expected from Schwab. Also unlike TDAmeritrade only the date is noted, but NOT the time of day in the journaling of the dividend payment in my account.

[Morik]

[Thread merged into here --admin LadyGeek]

I have dividend reinvesting turned off so that I can buy to rebalance.
I've noticed that Fidelity credits my account for the dividend sometime during trading hours on the dividend payment date. Robinhood so far has credited the amount sometime after trading hours on the payment date and I'm unable to invest that money til the day after the dividend payment date.

E.g., AVES paid its dividend today and in my Fidelity account I was able to invest that money today. It is about 4 hours after markets closed today and I still haven't received the AVES dividend in my Robinhood account.

Is this just Fidelity & most other brokerages allowing me to purchase on margin similar to how I can sell one security & buy another with the proceeds before the sale actually settles (without paying any margin interest), while Robinhood does not allow this? I do notice my Fidelity account activity shows the dividend as 'Processing' even though I was able to use the money to purchase things.

[livesoft]

See this thread for all about this at many brokerages:
viewtopic.php?t=87742

WellsFargo and Fidelity seem to be good. Schwab is pretty bad.

Please add your Robinhood observations to that thread, thanks!

[the_wiki]

ETrade is usually after hours as well.

Reinvesting a few hours earlier is just as likely to be negative as it is positive. If stocks drop a percent late day, you’ll wish it was later.

I’m not worried about it. I always get my dividends.

[CuriousGeorgeTx]

See this thread for all about this at many brokerages:
viewtopic.php?t=87742

WellsFargo and Fidelity seem to be good. Schwab is pretty bad.

Please add your Robinhood observations to that thread, thanks!

Schwab has improved in the last 6 months. Yesterday my VT dividends were paid. They appeared in my Schwab account sometime in the morning and were reinvested the same day. Previously they wouldn’t show up until late in the day and would be reinvested the next day. Now if they just had an attractive settlement fund.

[Morik]

ETrade is usually after hours as well.

Reinvesting a few hours earlier is just as likely to be negative as it is positive. If stocks drop a percent late day, you’ll wish it was later.

I’m not worried about it. I always get my dividends.

Time in market -- one day in the market lost on all dividend payments isn't a huge deal, but I don't consider it equally likely to be positive/negative--assuming the stock market goes up in general over time, one extra day in the market (on all dividend proceeds in my Robinhood accounts) should on average be more beneficial than not having that extra day in the market.

I don't regret lump summing money even if it goes down.

[LadyGeek]

See this thread for all about this at many brokerages:
viewtopic.php?t=87742

WellsFargo and Fidelity seem to be good. Schwab is pretty bad.

Please add your Robinhood observations to that thread, thanks!

I got it, thanks! I merged Morik's thread into the ongoing discussion.

To get our attention sooner, members can report the post using the (report post) in the top-right corner of the post and explain whats wrong. Thanks to the member who did just that.

[Lyrrad]

See this thread for all about this at many brokerages:
viewtopic.php?t=87742

WellsFargo and Fidelity seem to be good. Schwab is pretty bad.

Please add your Robinhood observations to that thread, thanks!

Schwab has improved in the last 6 months. Yesterday my VT dividends were paid. They appeared in my Schwab account sometime in the morning and were reinvested the same day. Previously they wouldn’t show up until late in the day and would be reinvested the next day. Now if they just had an attractive settlement fund.

I've had the same experience, seeing recent improvements. In one account I saw the old behavior in early March and the new behavior in late March.

I think the timelines I've seen are:
Schwab: Available on Payable date, Automatic reinvestment on Payable Date.
Fidelity: Available on Payable date, Automatic reinvestment day before Payable Date (though not visible/settled until the Payable Date)
Robinhood: Available after closing on Payable Date, Automatic reinvestment day after Payable Date

I believe Merrill Edge is similar to Fidelity in that it also reinvests on the day before the Payable Date (though not visible/settled until the Payable Date)

Fidelity used to reinvest ETFs two days before the payable date in order to settle on the payable date. I assume it changed to the day after the move to T+1, though I don't have enough data to be sure.

Before late March, Schwab had a three day difference from Fidelity, now it's down to 1 day. I'd prefer Robinhood to reinvest sooner, but I expect the difference to likely be much less than a basis point/year, and they gave me 300 of them to move my IRA.

I’m not worried about it. I always get my dividends.

I've had dividends not appear before at TD Ameritrade for a Vanguard mutual fund until after I contacted them more than a week after it was due. I'm not sure how I can realistically always be sure a brokerage pays dividends properly.

[livesoft]

Schwab: another data point and a good transaction finally.
Taxable account, dividend payable 07/01 received while market was open, so then manually submitted ACH money transfer to external checking. Earliest date to choose was 07/02, so did that. And the ACH transfer happened overnight and is in my external checking account by 3 am on 07/02.

That's about as quick as possible when ACH transfer needed, so I am pleased. Not as quick as WellsTrade where ACH transfer not needed.

I'll report on another dividend expected in Schwab account later today 07/02.

[jebmke]

Schwab: another data point and a good transaction finally.
Taxable account, dividend payable 07/01 received while market was open, so then manually submitted ACH money transfer to external checking. Earliest date to choose was 07/02, so did that. And the ACH transfer happened overnight and is in my external checking account by 3 am on 07/02.

That's about as quick as possible when ACH transfer needed, so I am pleased. Not as quick as WellsTrade where ACH transfer not needed.

I'll report on another dividend expected in Schwab account later today 07/02.

That’s pretty good for old technology (ACH).

[jocdoc]

I noticed that dividends payable on the same date appear at different hours of the day. at Schwab eg. today Schwab credited me the dividend for viov, and vbr but has not yet credited the dividend for VTI.

[livesoft]

I noticed that dividends payable on the same date appear at different hours of the day. at Schwab eg. today Schwab credited me the dividend for viov, and vbr but has not yet credited the dividend for VTI.

We also have not seen VTI dividends at Schwab today yet. We have VTI in 3 different Schwab accounts, so I may be able to see if timing is also affected by account type. But I will note that VTI would come later in an alphabet list of dividend payers, so if Schwab is working alphabetically through such a list, then it will take longer.

Oh, WellsFargo has already posted dividends for VTI and VV (payable 07/02) and I have moved them into my checking already already.

[retiringwhen]

@livesoft, your logic is impeccable!

[jebmke]

I noticed that dividends payable on the same date appear at different hours of the day. at Schwab eg. today Schwab credited me the dividend for viov, and vbr but has not yet credited the dividend for VTI.

The payable date for VTI is 7/2. VBR 7/1

[livesoft]

Schwab has my VTI dividends in all accounts now showing at around 2 pm Eastern -- about 12 hours after my other brokerages, but at least before the stock market closes.

[jocdoc]

As of the close Etrade did not credit me the vti dividend.

[livesoft]

This morning in a Schwab account, my BND dividend payable today has already shown up in my account history well before the market opens today. I must say I am surprised. However, since BND comes alphabetically before VTI maybe my hypothesis that Schwab updates a list of dividends from ticker symbols held in street name alphabetically is true.

But recall I reported BND dividend for April showed up after the market closed in this comment:
viewtopic.php?p=7804053#p7804053

So one cannot expect any consistency from Schwab at this time.

[jocdoc]

Etrade posted my VTI dividend one buisness day after Schwab.

[livesoft]

Etrade posted my VTI dividend one buisness day after Schwab.

Thanks. So then there is a detail: I think you noticed that the Etrade VTI dividend was posted on July 3, but maybe it was posted on July 2 on the payable date in the 8 hours between the market close and midnight.

I'm curious if the date of the dividend in your account is listed as 07/02/2024 or something else. I note that in my Schwab account paid dividends have always been listed as the payable date published by Vanguard.com even when the dividend is posted after the market close on that date.

[jocdoc]

you are right.I used the word posted incorrectly. The dividend t was posted on the 2 July. The dividend was not evident to me at the close of the market and I did not check my Etrade account after that until the next day. . I did receive a notification on July 3 that the VTI dividend deposited into my account.

[Arbitrage]

Hey everyone,
I hold the Treasury MM fund and send the monthly interest over to the settlement fund.

Well, it's the first of the month, the interest is payable today yet nothing is showing up in my settlement fund.

I've spoken to Vanguard and I was told it was indeed payable today, and that I should wait awhile.

My opinion: This should be a simple process, it's the first of the month, no weekend or holiday to confuse the issue and yet no posting.

All of my other brokerages have paid.

Has anyone had a similar experience? I've been with Vanguard for years, this is a new one.

[retiringwhen]

I have a similar setup for VUSXX into VMFXX, and yes, at Vanguard it appears a day later than logically expected. What is weird is that I think the money is actually there (it shows in the Total Credits and Debits line on the Holdings page), it is just that the backend is not able to show the actual transaction. So the dividend is posted on the 1st, but you won't see the ledger entries until the evening of the 1st. This is consistent with several bond funds that I have a well, but most are not on the 1st, but dates like the 3rd.

I think the bottom line here is that Vanguard does not post transactions into the cash account until they also post the transaction into the sweep (settlement). So since the sweep happens at the close of business, you don't see the pair of transactions until after the close of the payable date. I am not sure they are right or wrong, but at least they are consistent. I don't have such a process setup at any other brokerage to see what happens for comparison.


Related to the rest of the thread: I now own VTV in three brokerage houses, and in two different configurations (reinvestment and transfer to settlement account) here is the score for each:

Vanguard Brokerage transfer to Settlement -> Posted 9/30, Swept into Settlement 9/30
Vanguard Roth Brokerage reinvest -> Posted 9/30, reinvested 9/30 @ $173.41/share
Chase/JPM Roth Brokerage reinvest -> Posted 9/30, reinvested 9/30 @ $173.46/share
Fidelity Roth Brokerage reinvest -> Posted 9/30, reinvested 9/30 @ $174.34/share

According to Marketwatch VTV:
opened @ $173.52
high for the day: $174.57
low for the day: $173.09
closed @ $173.81

Speed-wise, all three are prompt, but price, Vanguard won the day handily; Fidelity did not seem to even try

[edited for clarity]

[livesoft]

Related to the rest of the thread: I now own VTV in three brokerage houses, and in two different configurations (reinvestment and transfer to settlement account) here is the score for each:

Vanguard Brokerage transfer to Settlement -> Posted 9/30, Swept into Settlement 9/30
Vanguard Roth Brokerage reinvest -> Posted 9/30, reinvested 9/30 @ $173.41/share
Chase/JPM Roth Brokerage reinvest -> Posted 9/30, reinvested 9/30 @ $173.46/share
Fidelity Roth Brokerage reinvest -> Posted 9/30, reinvested 9/30 @ $174.34/share

Vanguard.com lists the "Payable date" for VTV to be 09/30/2024, so to have the dividend automatically reinvested on 09/30/2024 is quite good. finance.yahoo.com has the 09/30/204 open/high/low/close to be 173.93 / 174.72 / 173.00 / 174.57

[Geologist]

Hey everyone,
I hold the Treasury MM fund and send the monthly interest over to the settlement fund.

Well, it's the first of the month, the interest is payable today yet nothing is showing up in my settlement fund.

I've spoken to Vanguard and I was told it was indeed payable today, and that I should wait awhile.

My opinion: This should be a simple process, it's the first of the month, no weekend or holiday to confuse the issue and yet no posting.

All of my other brokerages have paid.

Has anyone had a similar experience? I've been with Vanguard for years, this is a new one.

If you are having dividends paid from one fund to another on the brokerage platform, this happens on the payable date. For the Treasury MM (and other funds that pay monthly), this is the first business day of the next month. It is paid today, but it won't be posted (i.e., visible in your account) until after the close of business. That's the way it works. It is a simple process. It just doesn't happen in real time.