- The amount of information platforms provide on how they deliver dividends varies
- Overseas equity dividends and platform transfers can be costly
Dividends are a vital part of many investors' incomes, particularly those in retirement. So understanding dividend payment processes and how your investment platform delivers them to you can help to establish when you will receive them.
There are four key dates relating to dividend payments: the declaration, record, ex-dividend and payment dates. The declaration date is when a company’s directors announce what size the dividend will be and the day it will be paid. The company has a legal responsibility to pay the dividend once it has been declared. The ex-dividend date is one day before the record date, and you must have bought shares before this date to be entitled to the dividend. Shares typically fall on this date to adjust for the dividend amount. The reason you have to buy shares at least one day before the ex-dividend date is because shares typically take two days to settle.