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If you buy stocks on eToro, how do you collect your dividends?

Trading in stocks has now been made easy by technology and the internet as you do not have to go through conventional brokers to buy your stocks anymore.

There are different online brokerage platforms such as eToro, where you can buy stocks, ETFs, CFDs, and many other financial commodities. However, it is essential to do your homework on the brokerage platform to confirm whether such platform trades in your preferred financial commodity.

Setting up an account on platforms like eToro is quite easy. First, read about their terms and conditions, then open an account using your valid information. 

The next step is to credit your account with trading capital, and you are good to go. You can then buy your preferred stock and monitor it regularly and wait for your dividend.

Dose eToro Pays dividends? 

eToro distributes dividends on stocks or ETFs that you buy through your eToro account. eToro platform bases trading of financial commodities on CFDs. 

What this means is that when you buy a financial commodity such as shares, you are not purchasing the real shares, you are simply speculating on the change in the price of the shares. 

So when you buy stocks on eToro, you can get your dividends when the Company distributes its dividends.

eToro is able to pay you dividends because it combines the purchase of real shares with a hedging policy on CFDs in the real market. 

This means that eToro separately combines the various positions of its traders and buys the equivalent of these positions in real shares. 

This allows eToro to get dividend payments from the listed Company, which are, in turn, distributed to the traders on its platform in their respective proportions.

This is a strategy employed by most of the online brokerage platforms like eToro.

>> Learn how to build a dividend paying portfolio with eToro >>

Lastly, it is essential to note that receiving dividend payments is subject to tax, depending on the peculiarity of your trading and the jurisdiction. 

The percentage of the tax to be withheld on the dividend payment depends on the tax laws of the country in which the issuing company is incorporated. 

You should also prepare your mind that after receiving the dividend payment, you may still be liable for tax payment depending on your country of residence and whether such country has an applicable tax treaty.

Susan Wilson

Susan Wilson

Susan is a financial writer with over 5 years of experience in financial analysis. She writes on finance, real estate, cryptocurrency, investments, and she has also published several articles with various blog sites. Her favorite topics are financial analysis and personal finance.

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