What are dividends and how do they work?
Companies can decide whether they'd like to distribute some of their net profits of surplus to their shareholders. This is called a dividend. It is a regular payment to shareholders and can be issued in multiple ways such as cash, stocks or others.
We do not recommend eToro for long-term investors focusing on collecting dividends from US stocks. This is because the previously mentioned tax: eToro deducts the 30% default US dividend tax, rather than the – usually lower – tax treaty rate deducted by most other brokers.
eToro USA LCC does not offer CFDs, only real Crypto assets available.
Your capital is at risk
ETF or indices dividends
ETFs and indices also pay dividends if some or all of the securities within the ETF/index pay dividends. They are either paid in cash or in more exposure within the ETF.
CFDs with stock as underlying pay dividends. In this case, the broker owns the shares, therefore payment comes from the broker itself. Sometimes - as in eToro's case - with extra tax.
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81.2% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Past performance is not an indication of future results. Trading history presented is less than 5 complete years and may not suffice as basis for investment decision.
Copy trading is a portfolio management service, provided by eToro (Europe) Ltd., which is authorised and regulated by the Cyprus Securities and Exchange Commission.
Cryptoasset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.
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