I own some New Zealand, Australian and recently bought some American shares.
I have both a NZD and AUD account where I put my dividends into when I receive them. This isnít a big issue as I normally buy shares in lots of $3-4k to get brokerage below 1%
However, with my USD dividends that I will start receiving soon, the brokerage is slightly higher so Iím buying in lots of $15k or so to keep brokerage down below that 1% level.
Here comes my dilemmaÖ
Do I put these dividends ($400-500 per year) into a separate foreign currency account and leave it there earning 0% interest. Or do I move it into a local currency account where I can earn 3-4% interest on it. I know Iíll lose out on the foreign exchange spread if I move it back and forth too often. However, since it takes me 18 months or so to save up to buy one lot of US shares and then I may wait a bit until something I like becomes good value to buy, it may be sitting in mu USD account earning 0% interest for 2+ years doing essentially nothing.
For those who invest in US, UK or other overseas markets directly, what do you do with your foreign dividends?