Does eToro pay dividends to stock investors?
Our comprehensive eToro review explained the different investments you can make on the platform. This beginner-friendly guide takes you through the information you need to know about stock dividends on eToro. Read on to learn if eToro pays dividends to stock investors.
Does eToro pay dividends on stocks?
Yes, eToro pays dividends to stock investors and a few types of other investments. On eToro, you can earn dividends for stocks, ETFs, and indices. It is also possible to receive dividend payments for CFDs. For buy positions, dividend payments will be added to your available balance. For sell positions, dividend payments will be deducted from your balance.
How does eToro pay dividends?
Dividends are paid automatically into your account balance, provided you’ve purchased the stock ahead of the ex-dividend date. If you sell shares before this date, you will miss out on the dividend payment. Here is how eToro pays dividends depending on what asset you own.
- Stocks. The dividend payment will be added to your account balance if you hold a BUY position. If you hold a SELL position, your account balance will be deduced by the dividend payment amount.
- ETFs. If you BUY an ETF, dividend payments will be added to your account balance. If you hold a SELL position in an ETF, your account balance will be deducted by the dividend payment amount.
- CFDs. If you hold a CFD position on the ex-dividend date, eToro will automatically add a dividend payment to your account balance.
- Real Assets. You must have held the position two days before the ex-dividend date to receive dividend payments from real assets. Dividends will automatically be credited to your available balance.
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How can you earn dividends on CFDs with eToro?
eToro is one of the few brokers that pay dividends on CFDs. It does this by collating all open positions and buying stock from an exchange for its own portfolio. It then receives dividends, which it passes on to CFD traders. Here’s an example of how dividends on CFDs work on eToro.
- 100 traders on eToro buy CFDs for company X.
- The open CFD exposure equates to 1000 shares in company X.
- eToro buys 1000 shares from a stock exchange in company X to hold in its portfolio.
- When company X pays dividends, eToro passes on a portion to the 100 CFD traders.
How to find dividend payments on eToro
You can view your dividend payments by visiting your account statement when logged into your eToro trading account. Below are the steps you can follow to view your dividend payments on eToro.
- Log into your eToro account.
- Click the settings button on the left menu.
- Select ‘Account’ followed by ‘Account statement’.
- Set the period you want to view, followed by ‘create’.
- Choose ‘dividends’ from the menu. You will now be able to view all dividend payments in your account.
Do I have to pay tax on my dividends from eToro?
Usually, dividend payments are taxed, although this depends on the laws of the country of your residence. The amount of tax withheld by eToro depends on several factors and differs for each asset. Dividends paid on US stocks and ETFs have a tax rate of between 30% and 37%. For non-US stocks and ETFs, tax rates are specific to the source country’s laws. We recommend you contact a tax professional for more information.
How does eToro compare to other brokers for dividends?
Dividend payments on eToro are similar to those found on other brokerage platforms. Although eToro offers dividend payments on CFDs, many other platforms do not offer it. Payments are usually automatically made overnight and can be found in your account statements.
There are many brokers available that let you earn money through dividend payments. eToro’s platform is beginner-friendly, so it’s a good option for new investors. It is also possible to use copy trading on eToro, where you can earn dividends by copying other investors on the network who invest in dividend-paying assets.
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