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shar187
03-09-2012, 03:15 PM
I own a few shares in Australian listed companies and have a query about the dividend payment. I spoke to my bank and they advised that some companies will pay dividends converted into NZ$, some in AU$ and some will only deposit into an Australian bank account and suggested I talk to their 'sister bank' about setting up an account with them. This is my first time receiving dividends so just trying to get my head around everything.

The bank couldn't tell me whether any of the companies I hold would only use one of these options - they advised I needed to talk to someone that holds the share register or something.

I just wondered how most people deal with this. I think there is a fee (plus obviously the exchange rate costs) every time I deposit a foreign currency cheque to my bank - maybe $25 or something and for say an AU$200 dividend, that could be a lot of fees. The 'sister bank' has sent me the forms for setting up an account with them and told me for now there are no transaction fees but this option still seems like a bit of a hassle.

BTW - I do hold a foreign currency account with the same bank so that I can buy and sell shares and only pay the conversion rate onces but my bank advised that I couldn't get dividends directly to that account as it is an only transfer account only.

Any thoughts/imput would be much appreciated

Jay
03-09-2012, 03:30 PM
Welcome to Sharetrader
There was a similar question to this awhile back shar.
If I recall correctly, companies cannot force you to open an account for the receipt of dividends.
Some will credit a NZ Bank account directly, CBA was one from memory, some will send a cheque or credit an Aus based account

I am with ASB Securities and their FX account does not allow direct credit of Dividends, however when I receive the cheque I can send it to them to credit the AUD FX account or alternatively, I convert the cheque at the Bank to my NZ account, the fee is only 5c stamp duty.

The $25 fee you are thinking of is to "buy" a foreign currency dradft/cheque ie converting NZ$ to a Foreign draft.

Others have opened an account in Australia via one of the Aus owned banks here or when they are over there, others have an account thru Direct Broking which I think can accept direct credits.

shar187
03-09-2012, 03:42 PM
Thanks Jay, thats really helpful. I am with ASB Securities also so not sure why they didn't advise that there was the option to just send them the cheque but perhaps I wasn't asking the right questions. I think I will just stick with that for now - seems the easiest. Cheers

POSSUM THE CAT
03-09-2012, 04:31 PM
Shar 187 check the website for the companies you have or anticipate having shares in as I have several Australian companies saying they will no longer issue dividend Cheques. I have not gone into the legality of this as it does not affect me as I have Australian Bank Accounts. And all dividends are all ready direct credited

777
03-09-2012, 05:19 PM
I am with the National Bank and they now charge $15 to deposit a foreign cheque. OK if a big one but not when small.

if they don't issue cheques then they should offer a direct credit in NZ$ to a NZ account. I have a few PTM and have that option. Others I take the dividend shares choice.

OldRider
03-09-2012, 06:01 PM
There seems to be quite a difference in the amounts charged to bank a foreign cheque into
a NZ bank account. Westpac charges $5.00. Perhaps they make it up on the crossrates

Lizard
03-09-2012, 07:09 PM
Sending the cheque to the broker is a good option (still the best in most cases). However, we seem to be starting to find companies that will no longer even send a cheque. I'm still not sure where this sits - I opened an Aussie bank account after MFG said this last year... it took longer to open than it did to get the dividend and then they turned around and put in place a facility for NZ holders to receive payments in NZD, so was not necessary (especially since it costs me $A5/month for the bank account - which wasn't clear until I was half way through the process.).

For a while, it was difficult to open an Australian bank account, but has become easier again and so that is an option, but not yet as straightforward as one would hope. Hoping eventually I get comfortable with ways of transferring money around between the Aussie and NZ accounts.... so far, do not have enough divs in the Aussie account.

I am interested this season to see how many of my dividends automatically go to the Aussie account and how many turn up as cheques - still not sure whether if same-broker;same-registry will result in same outcome re dividends or whether I will need to manually update instructions on each registry web-site for each new share I buy. I don't have a CHESS account - trade under SRN - so that may be different to most (definitely different to ASB which are all CHESS).

One area that may prove more difficult is in my portfolio as Trustee for an Estate, where I have not yet attempted to set up an Aussie bank account. I anticipate it could become more complex.

Anyway, here is the old thread:
http://www.sharetrader.co.nz/showthread.php?8555-Aussie-Dividends-for-NZ-Investors

Fred114
11-09-2012, 08:34 PM
I opened a CBA account. Was referred from ASB, who passed my details to CBA, who rang my cell phone from Aussie. I told them what it was for, receipt of Aussie divs, emphasizing the size of my portfolio, etc, etc. She recommended a no fee account, that pays interest, Goalsaver. Access to term dep's if I wish. Then they emailed the forms, filled them in, took this ASB with drivers license who signed them and faxed them back to CBA. Online Netbank people rang me to get web access, and I was away. They want some money in the account within three weeks, suggested AUD600. Just the $11 fee for accepting the international money transfer is the only hard part to digest. Not too bad....just need to give the share registry the bank account details....all good.

shar187
24-10-2012, 11:30 AM
Just thought I'd come back and comment in the event that anyone in the future is reading this. Thanks all for comments and suggestions. Now that I have received some cheques I can confirm the following:
ASB Securities were able to bank the cheques for me into my foreign currency call account with no bank charges - just sent them my client code on the cheque.
Only one company would only pay to AUS account or by cheque in NZ dollars (which they convert at some rate they have) which was fine.
ASB sister bank sent me all info for seeting up account with CBA (thanks Fred114 for the info) but I decided not to proceed at the moment as doesn't seem like it's really necessary.