Keep These Four Important Dates in Mind to Receive Dividend Payouts

Date : 22/12/2022
Read: 3 mins

Four important dates relevant for receiving a dividend on stocks held

There are different types of investors and traders in the share market. If you invest in stocks, you must have formed an identity of your own. You may be an aggressive day trader looking to book intra-day profits. You may be a swing trader looking to cash in on the ebbs and flows of the stock prices. You may have picked blue-chip stocks intending to stay invested for the long term.

Or you may have cherry-picked companies that have a track record of offering high dividends. If yes, then you must have the question in mind – how do I receive dividend payments? All you need to do is be clear about the various important dates that are important from a dividend payout standpoint. Anyone with investments in the stock market should be familiar with four dividend payment-related dates.

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Dividend declaration date – A dividend is the profit of the company that is decided to be distributed among the shareholders. Once decided, the dividend becomes a liability for the company. The date on which the board of directors declared a dividend is the dividend declaration date. It is important for accounting purposes, as the liability is booked on this date.

Record Date – The company then reviews the list of shareholders and identifies the ones that are “holders of record” as on the date of record. The shareholders of record are the ones who are originally eligible for the dividend, although the ex-dividend date is of great importance in this matter too. The date of record is announced on the date of the dividend declaration.

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Ex-dividend date – Ex-dividend date is of significance to investors who want to earn the dividend income as declared by the company. You must buy a share on or before the ex-dividend date to receive the dividend declared by the company. Thus, if you have purchased the share after the ex-dividend date you will not receive the dividend when it is distributed.

Payment date – The payment date too, is declared on the dividend declaration date. It is the actual date on which the company passes on its profits to the eligible shareholders in the form of dividends. If you hold a share or it is on your watchlist, these are the four dates that you must note once the news about the dividend declaration comes out.

As the shareholder, you are part-owner of the company. If the company distributes dividends against the profit earned, you are eligible to earn the same. If you have held the stock for a few days, you must consider these important dividend payment dates and collect your rightful share of profit.

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