IWeb dividend reinvestment charge? is it worth it?

isayhello

I opened an IWeb ISA a while ago and just realised that for all the dividends I've picked up over the year, for each automatic reinvestment there is a 2% charge of the dividend upto £5, I must have forgotten this if they mentioned it when I first signed up.

Are other IWeb users aware of this? does it make it more worthwhile to switch to a cheaper platform such as Trading212 or Freetrade if the dividends are large enough that it still beats the reinvestment charge?

If you have an accumulating fund, does that bypass this charge or it's still implicitly taken by IWeb?

ColdIron

isayhello said:

If you have an accumulating fund, does that bypass this charge or it's still implicitly taken by IWeb?

Acc funds retain the dividend so reinvestment is not required hence no fee

masonic

I've never used the dividend reinvestment service. I just add any available cash to the next order I place with new money.

ColdIron

I don't think Trading212 or Freetrade offer funds (OEICs/Unit Trusts) so your Acc options will be very limited, mainly ETFs

wmb194

isayhello said:

I opened an IWeb ISA a while ago and just realised that for all the dividends I've picked up over the year, for each automatic reinvestment there is a 2% charge of the dividend upto £5, I must have forgotten this if they mentioned it when I first signed up.

Are other IWeb users aware of this? does it make it more worthwhile to switch to a cheaper platform such as Trading212 or Freetrade if the dividends are large enough that it still beats the reinvestment charge?

If you have an accumulating fund, does that bypass this charge or it's still implicitly taken by IWeb?

I have dividends received by iWeb automatically paid away to my linked current account and then I reinvest them via Trading212, Freetrade and elsewhere. At some point in the future I might consolidate my holdings with these brokers with iWeb but it is useful to have multiple brokers.

isayhello

masonic said:

I've never used the dividend reinvestment service. I just add any available cash to the next order I place with new money.

I must have said yes to it when I joined, I hope there is a way to undo this because your approach makes more sense.

isayhello

wmb194 said:

I have dividends received by iWeb automatically paid away to my linked current account and then I reinvest them via Trading212, Freetrade and elsewhere. At some point in the future I might consolidate my holdings with these brokers with iWeb but it is useful to have multiple brokers.

Good idea as well, thanks for that. I'll have to see if I can find the setting to undo the reinvestment option, as it's happening to a few of the funds and shares I hold, so a waste of money.

wmb194

isayhello said:

wmb194 said:

I have dividends received by iWeb automatically paid away to my linked current account and then I reinvest them via Trading212, Freetrade and elsewhere. At some point in the future I might consolidate my holdings with these brokers with iWeb but it is useful to have multiple brokers.

Good idea as well, thanks for that. I'll have to see if I can find the setting to undo the reinvestment option, as it's happening to a few of the funds and shares I hold, so a waste of money.

it's easy to change your preferences: in the menu go to 'Account Management' and then 'Dividend Options.'

isayhello

wmb194 said:

Good idea as well, thanks for that. I'll have to see if I can find the setting to undo the reinvestment option, as it's happening to a few of the funds and shares I hold, so a waste of money.

it's easy to change your preferences: in the menu go to 'Account Management' and then 'Dividend Options.'

Yup spotted it as well thanks, glad I did its so easy to set up these accounts and forget about them or what choices you made when starting up.

shahpur

Just had a look at mine , I received around £508 in dividends ( lloyds / bp / Inrg )  last year so would I have been charged 2% of this total on this amount? 

Some of the dividends ( around £200 ) I think were paid into my cash ISA as they were not enough to buy a single share .

wmb194

shahpur said:

Just had a look at mine , I received around £220 in dividends ( lloyds / bp / Inrg )  last year so would I have been charged 2% of this total on this amount
? 

Only if they were reinvested by iWeb on your behalf.