IRA advice needed!?

Question

I just opened a ROTH IRA account at TDAmeritrade. (45 days of free trading for me yay)

Unfortunately, Ameritrade does not allow clients to hold fractional shares, cash is paid for dividends left after full shares are purchased. Unless the stock company itself pays out in shares.

Do all IRA accounts function like this? Does anyone have an Etrade account and have similar problems?

I want an account where my dividends get reinvested. For example Diageo says 2% divs, I want the divs to get reinvested in more shares.

Thanks for your advice in advance.

How do I know if an ETF is open ended? Is there a way to filter for them? Thanks.

Also, is there a way to check which stocks are?

Answer 1

ETrade has a DRIP program and allows for fractional share purchase - ONLY through DRIP. Example - buy 100 shares MCD and sign up for DRIP - every time you receive a dividend it goes to purchasing shares of MCD.

Answer 2

This is really a matter of opening an account within an account. If your IRA is self directed you can choose companies that will gladly reinvest their dividends back into more shares. Other wise let the funds build only long enough to cover the cost of more shares, or go with mutuals.

Answer 3

You can't do it inside the discount broker account for individual stocks.

But you can purchase Mutiual Funds or open-ended ETFs where dividends will be reinvested.