M1 automatically handles and processes your dividend payments.
By default, cash dividends payments are paid to your account’s cash balance and invested according to your Auto-invest settings. You may select alternative handling options by adjusting your dividend handling settings.
You can view your received dividends by navigating to the Activity tab in your account and filtering “Activity type” to only display dividends.
Qualifying for a dividend
You’re eligible to receive the upcoming dividend for a security if you own it before its ex-dividend date.
If you purchase a security on or after the ex-dividend date, you won’t receive the upcoming dividend.
The date you receive the cash dividend payment is the payment date. Dividends are always considered earned before they are paid.
Example
Stock ABC has an ex-dividend date on 1/15 and a payable date of 1/25.
Stacy bought a share of ABC on 1/14, and Eddie bought a share of ABC on 1/15.
Stacy is owed the dividend and Eddie is not. Stacy’s dividend will appear as earned between 1/15 and 1/25. Stacy will be paid the dividend on 1/25.
Negative dividends
If you see a dividend in your account activity with a negative dollar value, that’s an American Depositary Receipt (ADR) fee.
ADRs allow U.S. investors to invest in foreign securities. When you own an ADR, a custodian oversees the ADR and maintains the records.
The custodian collects the dividends paid out to the foreign issuer, converts them into US dollars, and deposits them into your account. The custodian charges a fee for all these services and this fee is called the ADR fee.
Cash distributions that are not dividends
Some securities distribute cash during the year, but this money is not considered dividends. Examples of these payments are partnership distributions, royalties, and return of capital. These types of cash distributions are often treated like dividends when they’re paid, but they may be reported on different sections of your tax form.
All examples above are for informational purposes and should not be considered an offer to buy or sell certain securities. M1 does not provide investment advice.
Brokerage accounts on the M1 platform are either fully disclosed to APEX Clearing or cleared through M1 Finance LLC. Please look at your account statement to determine how your account is cleared.
All investing involves risk, including the risk of losing the money you invest. Past performance does not guarantee future performance. Using margin can add to these risks. Users utilizing APEX cleared margin accounts should review the APEX margin account risk disclosure before borrowing. Users utilizing M1 cleared margin accounts should review the M1 margin account risk disclosure before borrowing. M1 Margin Loans are available on margin accounts with at least $2,000 invested per account. Not available for Retirement or Custodial accounts. Margin rates may vary.
Brokerage products and services are offered by M1 Finance LLC, Member FINRA / SIPC, and a wholly owned subsidiary of M1 Holdings, Inc.
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