Most brokers let you automatically reinvest dividends into the same stock, mutual fund, or ETF without charging any fee. If it’s a taxable account and you don’t want to automatically reinvest dividends, you don’t have to remember to transfer the dividends out manually on your own. You can set it up to automatically transfer out to any bank account you designate.
To set this up online with Fidelity, if you’re transferring to an external bank account, you need to link it for Electronic Funds Transfer (EFT) if it isn’t linked already.
Link Account for EFT
Click on “Accounts & Trade” and then “Transfers.”
Click on “Manage bank accounts” under the “Manage” heading.
Click on the “Link a new bank or recipient” button to the right.
Choose “ETF” and “Myself” and go from there. You can either link instantly by logging in to online banking or use the random deposit process to link and verify your bank account.
Recurring Transfer of Earnings
After your bank account is already linked and verified, click on “Transfer” in the ribbon.
Choose the source and destination accounts. The destination account can be another Fidelity account if you’re using Fidelity as a checking or savings account. Chooses “Recurring” and “Withdraw only my earnings from this account.” The frequency can be daily, weekly, monthly, or quarterly. I leave it as “Every business day.”
This will automatically transfer all dividends and interest payments to the chosen destination account. Proceeds from selling shares or matured bonds or CDs won’t be transferred.
Merrill Edge requires a form. After you log in, click on “Help & Settings” and then “Forms & Applications.”
Search for “funds transfer” and find “Funds Transfer Service Enrollment – Merrill Edge.” You can either e-sign the form or download the PDF form, fill out the form and sign, and submit a scan to customer service.
The destination can be either a Bank of America account or an external account.
You can choose to link the bank account as one-way out of Merrill Edge or both into Merrill Edge and out of Merrill Edge. Options 4 or 6 will transfer dividends and interest daily. Options 5 or 7 will transfer dividends and interest monthly. I chose option 6 to transfer dividends and interest daily.
Now all dividends will automatically go to your linked external bank account.
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