InvestorQ : How are dividends paid in stocks and mutual funds?
Shreya Mashelkar made post

How are dividends paid in stocks and mutual funds?

Nikita Damle answered.
1 year ago
In terms of equity markets, dividends are paid on the date designated by a company's board of directors as the payment date. The board announces this date on the dividend declaration date. The board may authorize dividends once a month, quarter, or year, or possibly semi-annually. Dividends are most commonly issued on a quarterly basis.

If you are eligible for dividends, you will receive the dividends in your bank account (primary bank linked with DEMAT), on the dividend payment date. The dividend payment date is generally 30-45 days after the record date.

For mutual fund investors, dividends are paid basis on the mandate of the scheme. It bears to be noted that dividends in terms of mutual funds are profits that are redistributed among investors who have opted for the dividend option. Keeping this in mind, SEBI has recently directed AMCs to rechristen the dividend payout option to the Income Redistributed Capital Withdrawal scheme (IDCW).