Last two weeks I have been thinking about relocating my RDSA stock from my online brokerage account to the brokerage account I have at my home bank. This bank is where I have my mortgage, some of my saving accounts, my payment account and my credit card.
The reason why I wanted to move the stocks there was being eligible for the dividend reinvestment plan (DRIP) of Royal Duytch Shell. Owning 60 shares of RDSA I am receiving sufficient dividend each quarter to receive 1 extra share, even now that the stock price has risen significantly over the last few months.
However, while my online broker has very low transaction fees for regular buys of shares, I would have to pay €7,50 when I would want to DRIP. Buying 1 share in the regular way would only cost €2. So DRIPping at my online broker is no option and paying 2 euros to buy one share is no option form me as well, because this would mean a transaction fee of over 8%.
However, at my home bank, DRIP is free. It has much higher regular transaction fees but DRIP costs nothing.
So last week I sold my 60 shares of RDSA in my online brokerage account and bought those share back in my home bank brokerage account. I also bought an extra 10 shares in the process to make sure to be eligible for DRIP if the price goes up over €0 a share.
These transactions cost me €12,31 whereas if I would have just moved the shares from one account to the other it would've cost me €100.
So now I own 70 shares RDSA with which I can DRIP every quarter. This transaction will increase my forward dividend with almost 18 euros dividend income to €273.