Some companies pay a percentage of their profits as dividends into a bank account you nominate.
Another option some companies offer is for your dividends to be allocated to you as additional shares in the company.
For long term value investors, both are great options. They enable the compounding effect in growing your wealth.
Read on to see the steps to do the same.
Step 1 – Look up the company share registry
You can do this by looking at the welcome letter you would’ve received as a shareholder. The letter will have your SRN/HIN Number and also the name and website of the registry.
A registry is a 3rd party service used by the company in which you own shares, to manage shareholders holdings, personal details, communication preferences and dividend payments / reinvestment plans.
See example below:
Step 2 – Create an account with the registry
There will be a register or sign up section on the registry website for investors. Go ahead and create an account. You will need your SRN/HIN number, and any one of your company holding details (ASX Code or company name) to complete your account creation.
Step 3 – Update your personal information and bank account details
Update these details and make sure they are correct.
Tip: You can also elect to receive all future communications by email instead of post.
Step 4 – Enrol in Dividend Reinvestment Plan
Check each of your holdings with the registry to see if there is a dividend reinvestment plan option.
The most common registries for reference are: