Record Date
Quick definition: The record date is the day a company checks its list of shareholders to decide who receives the next dividend.
In plain English
On the record date, the company looks at its books and pays the dividend to the shareholders listed that day. It sits between the declaration and the payment.
Example
A company declares a dividend on May 1 with a record date of May 20 and a payment date of June 5. Investors who are on the books on May 20 receive the payment on June 5.
Why it matters
Trades take time to settle, so being “on the books” depends on when you bought, which is why the ex-dividend date exists. In the US, the ex-dividend date and the record date are normally the same day today.
Common mistakes
- Using the record date to decide when to buy. What matters for you is the ex-dividend date.
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