The sequence starts with the declaration date, when a company’s board announces the dividend: how much per share, and the dates that follow. Then comes the ex-dividend date — the only date most investors need. Buy the shares before the ex-date and the upcoming dividend is yours. Buy on or after it, and the seller keeps it.
Declaration date
The board announces the dividend and the dates that follow.
Ex-dividend date
The one that decides ownership. Buy before it, the dividend is yours.
Record date
The company checks its shareholder register.
Pay date
Cash lands in your account — or a DRIP buys your new shares.
The record date is the administrative checkpoint — the day the company looks at its shareholder register — and with modern one-day settlement it falls right around the ex-date. Finally the pay date, days or weeks later, is when cash actually lands in your account (and when a DRIP typically buys your new shares).
The trap these dates set: on the ex-date, a stock’s price typically drops by roughly the dividend amount, all else equal, because the cash is no longer attached to the share. Buying the day before the ex-date to ‘grab the dividend’ therefore gains you nothing before tax — and in a taxable account it can leave you worse off, since the dividend is taxable income while the price drop is just a paper loss until you sell.
Practical takeaway: if you were going to buy anyway, buying before the ex-date is a small bonus, not a strategy. Check the dates on the fund’s or company’s official page, let the calculator handle the long-term maths, and never let a pay date make a decision your research wouldn’t.