A dividend is a payment a company makes to its shareholders from its profits. When you own shares, dividends can provide regular income on top of any gain if the share price rises, though not every company pays them, and amounts can change year to year.

How dividends work

The company's board decides whether to pay a dividend and how much. If approved, shareholders receive a set amount per share on a scheduled payment date. You must own the stock before the ex-dividend date to qualify for that payout.

Companies that pay dividends regularly are often mature, profitable businesses, think established consumer brands or utilities. Fast-growing companies may reinvest profits instead of paying dividends, betting that growth will reward shareholders through a higher share price.

Dividend yield and what to watch

Dividend yield is the annual dividend per share divided by the share price, shown as a percentage. A very high yield can signal strong income, or trouble if the market doubts the dividend will continue.

Dividends are usually taxable. Rules depend on your country and whether you hold shares directly or through a fund.

Dividends and bunq

When you hold dividend-paying stocks through bunq Stocks, payouts typically land in your investment account according to the platform's process. Track your portfolio alongside budgeting tools and Bank Accounts in one app.

Frequently asked questions

Are dividends guaranteed?

No. Companies can cut or suspend dividends if profits fall or they choose to reinvest instead.

What's the difference between a dividend and interest?

Dividends come from company profits to shareholders. Interest is paid on loans or deposits, like a Savings Account, and isn't tied to company ownership.

Do ETFs pay dividends?

Many ETFs pass through dividends from the stocks they hold, often on a regular schedule.