Does Schwab not do ETF dividend re-investment?

[PaunchyPirate]

I'm a relatively new Schwab customer. I have a Vanguard ETF (VEU) in my account which did its quarterly distribution yesterday (3/23/23). The proceeds from this distribution appeared in my account overnight. I see it in my cash balance and I see an entry in my transaction history.

However, I have that investment set to re-invest -- The "Reinvest?" column on my positions page says "Yes". I set it that way after moving the investment over from Vanguard in early February. This is the first distribution since I have moved the investment.

I chatted Schwab this morning and the agent confirmed my setting was correct on their side. They said there is sometimes a delay in re-investing. Is that really how it works? My only Schwab investments (Money Market and a mutual fund) reinvested on the same day as it was distributed. It seems that if there is this much of a delay that people would do other things with that money while it sits in the cash balance for the account. Like transfer it to a money market fund that pays better interest.

Thoughts?

[MarieIG]

I had some stock transferred over to TD Ameritrade/Schwab from their transfer agents, and the stocks came through quickly, but dividends showed up in the old accounts a while later. I tried to schedule the transfers prior to the ex dividend date too. It took me a few months to get the old accounts emptied and closed out.

With TD/Schwab, I sometimes see the dividends sitting in the sweep account for a day or two before showing up as a purchase.

[pb4uski]

^^^ When they show up as a purchase after a day or two are the purchases backdated to the date of the dividend? or perhaps the following day?

[PaunchyPirate]

Quote:

Originally Posted by MarieIG I had some stock transferred over to TD Ameritrade/Schwab from their transfer agents, and the stocks came through quickly, but dividends showed up in the old accounts a while later. I tried to schedule the transfers prior to the ex dividend date too. It took me a few months to get the old accounts emptied and closed out. With TD/Schwab, I sometimes see the dividends sitting in the sweep account for a day or two before showing up as a purchase.

Interesting. I guess I’ll leave the cash there and see what happens. It’s not a huge amount.

[Accidental Retiree]

Quote:

Originally Posted by PaunchyPirate I'm a relatively new Schwab customer. I have a Vanguard ETF (VEU) in my account which did its quarterly distribution yesterday (3/23/23). The proceeds from this distribution appeared in my account overnight. I see it in my cash balance and I see an entry in my transaction history. However, I have that investment set to re-invest -- The "Reinvest?" column on my positions page says "Yes". I set it that way after moving the investment over from Vanguard in early February. This is the first distribution since I have moved the investment. I chatted Schwab this morning and the agent confirmed my setting was correct on their side. They said there is sometimes a delay in re-investing. Is that really how it works? My only Schwab investments (Money Market and a mutual fund) reinvested on the same day as it was distributed. It seems that if there is this much of a delay that people would do other things with that money while it sits in the cash balance for the account. Like transfer it to a money market fund that pays better interest. Thoughts?

Yes, that’s how it works at Schwab with dividend reinvestment. The divs plop into your account and then show up as reinvested in a day or two.

[PaunchyPirate]

Thanks everyone. I was already debating whether I really wanted to do auto reinvests in this account. After this round of dividends completes, I think I’ll just turn it off. That way I can redirect the funds elsewhere if I want. It’s more flexible and I won’t be wondering when they will do the reinvest.

[PaunchyPirate]

To close the loop on this thread... Schwab did the automatic re-investment of the VEU dividends overnight. So basically, dividend appeared in my account as cash on Friday morning and stayed that way all day. Then by Saturday morning it was gone and the additional shares of VEU were in my account.

[braumeister]

Quote:

Originally Posted by PaunchyPirate To close the loop on this thread... Schwab did the automatic re-investment of the VEU dividends overnight. So basically, dividend appeared in my account as cash on Friday morning and stayed that way all day. Then by Saturday morning it was gone and the additional shares of VEU were in my account.

I'm guessing this was because it's a Vanguard ETF. I've had Schwab's own SCHD reinvest shares immediately.

[audreyh1]

Quote:

Originally Posted by braumeister I'm guessing this was because it's a Vanguard ETF. I've had Schwab's own SCHD reinvest shares immediately.

Same here.

It usually shows as next day, and I guess the reinvestment price is based on a closing price?

[MarieIG]

Quote:

Originally Posted by braumeister I'm guessing this was because it's a Vanguard ETF. I've had Schwab's own SCHD reinvest shares immediately.

Ahhhhh. Now that you mention it, I don't recall seeing SCHD floating about in my sweep account.

[Dash man]

If you look on the Balances screen, you would have seen the funds on “Hold” until they are reinvested.