One of the more popular google search terms that have led readers to my site lately has been loyal3 dividends. I’m guessing people are asking what happens to dividends you receive from stocks you hold in your Loyal3 account. This isn’t made very clear on Loyal3’s website and it was something that I too wondered about until I received my first dividend recently.
Dividends received are collected in your cash account, which is the “Available Funds” portion on your account overview page. They are not automatically reinvested but with the $10 minimum purchase you could easily set an order to pick up some more fractional shares if your dividends total at least $10.
When you go to make a new purchase using your credit/debit card Loyal3 will automatically use the cash collected in your account from dividends first and then charge the rest from your card. For example if you have $5 in dividends in your cash account and you put in a order using your credit card for $100 of McDonald’s stock, the cash will be applied to the order and you will be charged $95 on your card.
You can also transfer funds out of your “Available Funds” to your checking account if you have it linked to your Loyal3 account if you want to spend your dividends or put them into a different account. You can also use this option to add money to your “Available Funds” if you don’t want to use your credit card. Personally I prefer to use a credit card so I can get cash back rewards for all of my purchases. With no commissions or fees to buy stock through Loyal3, it’s like getting paid to buy stocks. Awesome deal, right? 😉
Hope this helps!
Disclosure: I am long McDonald’s.