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Reinvesting dividends? Your RESP may not do the DRIP

Dear Nancy

Is it possible to reinvest the dividends from USD stocks in non-registered accounts and RESP accounts?

Yours truly, S.T.

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Dear S.T.,

Whether or not you can set up your cash account and RESP account for dividend reinvestments (DRIP) is dependent on where your accounts are held. Some brokerages have the ability to DRIP and some do not. You would have to check with them.

If your institution does offer the option to reinvest the dividend, see if they will also round up the purchase to a full share rather than rounding down and not using the full amount of the dividend. You would have to keep a cash balance in the account to cover any extra cost, but you would be able to purchase that extra share without the commission cost.

Nancy

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Nancy Woods is an associate portfolio manager and investment adviser with RBC Dominion Securities Inc. To reserve a seat for her March 6 seminar in Toronto, "How to Build an Income Portfolio" visit her website www.nancywoods.com or send an email request to asknancy@rbc.com. You can send your questions to asknancy@rbc.com as well.

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