RetireJapan

Hi All,

This is a hypothetical because it will depend on IBM's share price next year....

Next year I am considering using a big fraction of my NISA allowance to purchase around $10,000 worth of shares with IBM (This year is already maxed out). My reasons for this is that IBM supposedly have a solid annual divided yield of approx $6.48 per share. Not to mention they are a consistent company...so maybe a low risk investment?
https://www.fool.com/investing/2019/10/ ... -know.aspx

As it stands IBM shares are fluxing around $126 a share. So that would mean (at current value) that would be around 79 shares for my $10,000 (I would probably buy 80 shares just to round it up), which can return my a nice divide yield each year of holding.

I am quite new to investing and especially investing in Japan (this is my first year investing) My question is... How does one receive dividends on Rakuten Sec? Would they be directly paid into my Rakuten account? Would they be directly paid into a bank account? Would I receive an old fashioned cheque in the post?

Additionally, are dividends taxable when gained from shares held in a NISA account?

IBM's website claims
"Direct deposit of dividends
IBM offers registered stockholders the opportunity to deposit dividends directly to their account at a financial institution. Through the Direct Deposit service, your dividend will be sent by Electric Funds Transfer (EFT) directly to your designated bank account on the payable date. Contact Computershare (see contact information) for information on Direct Deposit or to request an enrollment form."
https://www.ibm.com/investor/help/ibm-c ... d-payments

So is it something I would have to set up myself with IBM or with Rakuten? (Ideally hoping IBM as my Japanese ability is low and want to avoid contacting if I can help it)

Thanks again for the help.

If you buy US stock in a NISA, I believe dividends are subject to 10% US withholding tax, which you cannot claim back.

The dividends should be processed automatically and credited to your account in USD (but I'm not sure if this is how Rakuten handles it).

Also worth mentioning that Enron was a very large and stable company too. Likewise for General Electric. All individual stocks are high risk investments compared to total market index funds - the tide could change at any time.

"If you buy US stock in a NISA, I believe dividends are subject to 10% US withholding tax, which you cannot claim back."

Thats good to know. Thank you for that.

"The dividends should be processed automatically and credited to your account in USD (but I'm not sure if this is how Rakuten handles it)."

As long as it's automatic that should be fine. Played around with Rakuten and I may have to set up the "Rakuten bank account" on...thought I did set that up anyway but I guess now.

"Also worth mentioning that Enron was a very large and stable company too. Likewise for General Electric. All individual stocks are high risk investments compared to total market index funds - the tide could change at any time."

Haha yea that one is a given. It's still something I just considering for now. But I am very tempted..

Thanks for your reply though. I will look into Rakuten Sec some more and make sure it's all set up for automatic dividend processing.

Do you get hit by the same 10% if the fund reinvests the dividend for you?

Kanto wrote: ↑Tue Aug 25, 2020 12:31 pm Do you get hit by the same 10% if the fund reinvests the dividend for you?

Yes