How to receive a dividend, step by step

Step 1. Check whether the payout has been declared

A board recommendation does not yet create a right to money. Check the status: recommended, or approved by the meeting.

Step 2. Work out the last day to buy

The right to a dividend goes to whoever is on the register on the record date. Settlement does not happen on the day of the trade, so the security has to be bought earlier — by the length of the settlement cycle.

Step 3. Buy and hold through the record date

Owning the security on the date the register is fixed is enough. Holding it longer for the dividend is unnecessary — but selling immediately after the record date is pointless too: the price has already fallen by the payout.

Step 4. Wait for the payment

Weeks pass between the record date and money in the account. The period is set by law and counted from the date the register was fixed.

What not to do

Do not buy a share the day before a record date purely for the payout. The dividend gap takes back exactly what the dividend gives, and tax makes the operation loss-making.