How long own shares to get dividend

Some companies give shareholders the option to reinvest dividends in the form of additional shares in the company, rather than in cash.

This is known as a dividend reinvestment plan DRP. Sometimes DRP shares will be offered at a discount to the prevailing market price, to encourage shareholders to continually re-invest in the company. The information on this website has been prepared without taking account of your objectives, financial situation or needs. Because of this, you should consider its appropriateness, having regard to your objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

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The ex-dividend date is set the first business day after the stock dividend is paid and is also after the record date. If you sell your stock before the ex-dividend date, you also are selling away your right to the stock dividend. Your sale includes an obligation to deliver any shares acquired as a result of the dividend to the buyer of your shares, since the seller will receive an I. Thus, it is important to remember that the day you can sell your shares without being obligated to deliver the additional shares is not the first business day after the record date, but usually is the first business day after the stock dividend is paid.

Test your knowledge on common investing terms and strategies and current investing topics. Learn about investing risks in certain companies that provide exposure to China-based businesses. Are you prepared for your financial future? Use this checklist to get started. Please enter some keywords to search. Breadcrumb Home Introduction to Investing Glossary. In order to be one of those shareholders of record, you need to buy or already own shares before the ex-div date, which is the business day before the record date.

In the vast majority of cases, dividends are paid in cash by the company to your brokerage, which puts the money in your account. Some companies offer direct stock investment plans, but with low-cost -- in many cases zero-commission -- trading available from most online brokers, there's minimal benefit to using this option these days. As to the when , the dividends show up in your brokerage account on or within a few days of the payment date, depending on your broker.

If you're counting on those dividends for income , it might take a few more days to transfer that cash out of your brokerage account and into your banking accounts , so factor the additional time in for budgeting purposes.

There are also some stocks that don't pay in cash, instead paying in more shares of a company's stock. This is rare, but it does happen, so make sure you verify whether you're getting a cash or stock dividend. Generally companies make it clear if the dividend is not being paid in cash. Again, if you want cash -- either as dividend income or to invest in other stocks -- a stock dividend means it will take a little longer to get your hands on actual money.

You'll have to sell the shares, then wait for the trade to settle -- several more business days -- before your broker will let you take the cash out of your account. Discounted offers are only available to new members. Stock Advisor will renew at the then current list price. Average returns of all recommendations since inception. Cost basis and return based on previous market day close. Investing Best Accounts. Stock Market Basics. Stock Market.