Understanding the 4 key dates for stock market dividends

Receiving dividends is always nice ☺. But what do dividend dates correspond to? Here is a simple summary to understand the 4 key dates for dividends on the stock market 🧐

On a stock account. There are different dividend dates! Even with a translator. The meaning of some dividend dates is far from simple to understand¹ 😶

After this article, you will understand the essentials of these very important dates 😉

The 4 dividend dates to remember

The 4 key stock market dividend dates to understand are:

• Declaration day
• Ex-dividend day
• Record date
• Payment Day

Declaration day

This date generally announces the ex-dividend day and the record day (we will come back to this later).

To summarize this date. This is when the stock board analyzes the company's finances. In order to decide the date of the next dividend as well as the value of the future dividend.

Ex-dividend day (Declaration date)

⚠️ This date is usually the deadline to receive the next dividend

Note that this date corresponds to the last day on which the stock exchange trades the value of the share without taking into consideration the next dividend.

Record day (Date of recording)

This date generally occurs a few days after the ex-dividend day.

To summarize, this date corresponds to the date on which the board decides which shareholders will be entitled to the next dividend.

Typically, these are all shareholders who purchased the stock before the ex-dividend day.

For example, imagine that a stock has an ex-dividend day on June 15th, a record day on June 16th, and pays the dividend to the shareholder on June 20th.

-> If you buy the stock on June 18th. It is very likely that you will not receive the dividend on June 20th.

Actually, your stock will not be counted for the June 20 dividends. In order to receive your dividends. You will have to wait until the next ex-dividend day to be eligible to receive dividends 🧐.

-> On the other hand, in this example, if you bought your stock on June 14th. That is to say, before the ex-dividend day. In this case, you are entitled to your dividend on June 20th 😊

Payment day (Payment date)

Shareholders' favorite date 😉

This date is simply the date the stock pays the dividend into the shareholder's stock account 😎

That is, you will see the dividend money arrive in your stock account!

Who doesn't love this date? 🤓

IA (Advance Taxes)

This is not really a date. But an important detail to understand when considering the dividend payment date (payment day).

Depending on your dividend received. You may have withholding taxes. Also known as AI, (this time nothing to do with artificial intelligence😜).

🔺Advance taxes are taxes that the government has taxed in advance for your dividends received. In order to avoid tax evasion.

⚠️ Note that in the majority of cases, This tax is recoverable (part of it) when you file your taxes ❗ Therefore, do not forget to declare your dividends when you file your tax return. 😉

Conclusion

Here is a summary of the main dividend dates 🧐

• Declaration day -> Date when the stock board decides the date and value of the next dividend.
  
• Ex-dividend day -> Generally, this is the deadline to invest in order to receive the next dividend.
  
• Record date -> Usually this is the date when the board decides which shareholders will be entitled to the next dividend. (Usually those who held the stock before the ex-dividend day)
  
• Payment Day -> Date when the shareholder receives the money in his account. It is possible that the shareholder receives the dividend reduced because of withholding taxes.
  

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