Before I opened a self-directed brokerage account at BMO InvestorLine I owned some shares that I kept in a safe deposit box at the bank. Every quarter, about a week before it was payable, a dividend cheque would arrive from the company’s agent. On the payable date, I would deposit the cheque in my account and could spend my capitalistic largesse immediately. So I was very curious when I first bought stock in my InvestorLine and Investor’s Edge accounts to see when the dividends would appear.
BMO InvestorLine Is Not Too Swift
I was a bit disappointed to discover, and verify over many payments, that BMO InvestorLine takes one full day after receiving a dividend on my behalf to post it to my brokerage account.
For example, Cineplex, which pays a monthly dividend which is great for income seekers, paid its June dividend on July 31 this month. If I had received a paper cheque in the mail, I could have cashed it and spent the money going to a movie that night. With InvestorLine, however, the money doesn’t appear in my account ready to spend till the morning of August 1.
Frankly given this is all done electronically, I’m a bit surprised by the delay. Since the paper cheques are mailed and delivered to my home several days before the payable date, one would think the electronic file would be available ahead of time too.
Now let’s look at Investor’s Edge.
CIBC Investor’s *Edge* Isn’t a Faster Dividend Payment
CIBC may be trying to give investor’s an edge but if they are it’s not by paying them their dividends on the day they are earned. Just like BMO, CIBC is taking one full day after receiving a dividend on my behalf to show it in the transaction history and cash balance of my brokerage account.
Is There a Benefit to Brokerages In This Delay?
Having a nasty suspicious mind, I wonder whether there is any benefit to the brokerages in this delay. Where is the money during the missing one day? Still in the issuing company’s bank account? Or sitting in an undisbursed slush pile in my brokerage? I think I should send a secure email by MyLink to BMO InvestorLine and ask them.
Checking Your Transaction History for Your Dividends
I’ve mentioned before that BMO InvestorLine back dates dividend payments to when they should have been made in the Transaction History.
CIBC Investor’s Edge does the same thing in its Transaction History.
Why Does It Matter If the Dividend Shows Up a Day Late?
For ultra conservative slow poke investors like me, it doesn’t particularly matter if the dividend payment is made a day late. But I can see how it might matter to others:
- if there is a great buy available on the day the dividend money should have been available, it must hurt to watch it slide out of reach while waiting one more day: even GIC rates flutter day by day
- if someone is using the dividend income to pay bills, even a day’s delay might cause problems depending on how the dates line up between bills and dividend payments
- My Dividend Just Doubled for CU! Or Did It? Stock Splits and BMO InvestorLine
- What is in the Transaction History for a BMO InvestorLine Account and What Should I Watch Out for?
When does your brokerage pay your dividends? Remember you can’t always tell by the Transaction History. You may have to actually check your cash balance on the day the money should have appeared. Please share your experiences with a comment.