Dividend Month on EasyEquities: Auto-reinvest like a pro
Let your dividends do the heavy lifting and buy more shares for you. Enough checking screens; set reinvestment to go and watch your future self thank you.
South Africans love a payout, then forget to tell that money what to do. Dividend Month is your reminder to put cashflows on a leash. If you already hold dividend-paying ETFs or local shares, you can switch on reinvestment so the next payout buys more units for you, quietly compounding in the background. This fits in with smart diversification in a core-and-satellite portfolio, which is where most SA investors should be anyway.
The second win is behavioural. Schedule your contributions and reviews once, then let the rules run the show while markets do their thing. Pair automatic dividend reinvestment with automated contributions so new cash and old cash both keep buying, month after month. The combo reduces timing FOMO and keeps your allocation honest.
Dividend reinvestment is not hype. It is admin done right: payouts buy more of the thing that paid you, fees are contained, and your future self inherits a larger slice without extra screen time.
What “auto-reinvest” means on EasyEquities
EasyEquities lets you set a dividend payout preference at account level and, if you want, per instrument. Choose Reinvest and future cash dividends from that share or ETF are used to purchase more of the same asset. Cash dividends under R1 do not reinvest, they land in your cash wallet. You can change the preference at any time, and a per-share setting overrides the account default.
Some ETFs handle reinvestment inside the fund. If an ETF is labelled “total return”, distributions are reinvested within the portfolio instead of paid out to you, which achieves a similar effect without a setting on your side.
If you like rules you do not have to babysit, add recurring investments on EasyEquities so fresh money lands monthly, then let dividends top it up. Two flies, one whack."
The best part about auto-reinvesting is that it turns a once-off win into a habit. Dividends arrive, units increase, next dividend lands on a bigger base. Rinse, repeat, without chasing signals.
Fees, tax, and the fine print
Dividends from South African companies are generally exempt from income tax for individuals, although a 20% Dividends Tax is withheld before the cash reaches you. That withholding happens whether you take the cash or reinvest it, so reinvesting does not increase the tax rate, it simply keeps your capital working.
Using a tax-free savings account (TFSA) on EasyEquities? Dividends that arrive inside a TFSA do not count toward your annual contribution limit, which means reinvesting them does not “use up” allowance.
Distributions and frequency vary by ETF. For example, the Satrix 40 indicates quarterly distributions, while some other ETFs pay semi-annually or monthly. Check the factsheet before you plan your cashflow.
Tax happens regardless, performance varies by fund, and the rand moves when it wants. The controllable edge is process: automate contributions, reinvest distributions, and review on a calendar you choose.
Step-by-step: set it once, let it work
- Check your current settings
Open Dividend payout preferences in your EasyEquities profile. Confirm Reinvest is selected at account level. If you want different rules for a specific share or ETF, set the preference on that instrument. Remember that payouts under R1 will not reinvest. - Decide where reinvestment makes sense
Reinvest by default on broad-market ETFs and quality dividend payers you plan to hold for years. If you hold a speculative single stock for a trade, take the cash instead. - Pair it with a debit order
Enable a monthly recurring investment into your core holdings. The debit order feeds the portfolio, the dividends top it up, and your weighting stays closer to target between rebalances. - Know your ETF’s distribution policy
If an ETF is total return, the fund reinvests internally. If it distributes, your Reinvest setting buys more units on pay-day. Either way, the compounding wheel turns. - Review quarterly
Scan fees, weights, and whether your auto-reinvest is still aligned with the plan you set when markets were not shouting at you. Keep the rules, not the mood.
Quick maths to see the point
Say you hold R20 000 in a low-fee ETF with a 3% cash yield. Without reinvestment, you collect R600 over the year, which often gets spent on takeaways and petrol. With reinvestment and a steady price, the R600 buys more units that earn their own dividends next time. Add R1 000 per month through a debit order and you are compounding contributions and payouts. No hero trades required.
Where this fits in your SA portfolio
Auto-reinvesting shines inside a diversified base of ETFs and a handful of researched local shares. It keeps your risk spread while converting income into growth, which is handy when inflation behaves and global risk appetite is lukewarm. Pair with a modest offshore sleeve, keep emergency cash separately, and save the YOLO bets for money you can afford to see evaporate.
Use reinvestment to remove guesswork. The goal is not to out-predict a headline. The goal is to own more quality over time, funded by the cashflows your assets already produce.
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