Does Capital.com pay dividends?
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For stock investors, dividends are an issue that investors are often very interested in because they are related to your profits. So, when investing in stocks on Capital.com, do stock investors pay dividends? Let’s find out in the article below.
Do stock investments on Capital.com pay dividends?
Dividends are amounts that a company periodically pays to shareholders, in addition to dividends or reserves.
Dividends are distributed based on the capital contributed by each shareholder in the company, in the form of giving them a certain amount of money per share they own. For example, if Apple announced a dividend of $0.80 per share, the shareholder with 50 shares would receive a dividend of $40.
In fact, not all exchanges allow you to receive dividends, especially with CFDs trading. But Capital.com alone does this for customers.
Your account may have dividends added or subtracted if the account is trading a dividend-paying stock, ETF, or index.
- If you hold a BUY position, you will receive the dividend payment directly to your available balance.
- If you hold a SELL position, the dividend payment will be deducted from your available balance.
Dividend payment date on Capital.com
In the dividend process there are four important dates you need to keep in mind:
- Announcement Date: The date the company’s management announces its intention to pay dividends. The Board of Directors also announces the dividend value, ex-dividend date and dividend payment date.
- Ex-dividend Date: if trading on this day or after this date, the buyer will not be entitled to dividends. Only owners of shares before the ex-dividend date will receive dividends.
- Record Date: When the company checks the records to see who is eligible to receive the dividend. The record viewing date is one business day after the ex-dividend date.
- Dividend Date: When dividends are actually paid to shareholders of the company (applicable to real assets).
For share CFD assets on Capital.com, dividends will be added (subtracted) to your available balance on the Ex-dividend Date.
Things to keep in mind when investing to receive dividends on Capital.com
- Investment to receive dividends is mainly applied on the US stock market. The European market does not generously offer dividends (no dividends or very little pay). Therefore, you need to consider in the process of choosing stocks to invest in.
- When using a trading strategy to receive dividends, investors should watch out when the stock is in a downtrend. Because it is very likely that the number of dividends you will receive will not be much, but the loss from the falling stock price will be many times larger. You can use short-term analysis techniques to predict whether the price will rise or fall the next day for a better view.
- Remember that when you SELL, you pay a fee equal to the dividend multiplied by the leverage. So when you open a SELL position, you need to check when the dividend will be paid to account for the loss that could eat into your potential profit.
How much tax is deducted on dividends?
The receipt of dividends is a taxed event in some cases and in some jurisdictions.
Specifically, the tax rate applicable to dividends on US stocks is 30%.
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