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Written by Sam Pennington on January 9, 2022
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What Happens With Dividends On Public?

Public has successfully merged the concepts of investing and a social network.

With Public, you can actually follow other investors and see what investments they are buying and holding. You can also ask questions and start discussions with other investors all within the app. 

Public has also built out a number of themes that you can follow depending on your interests. For example, one of their themes is called the “Meatless Revolution.” If you were to follow that theme, you would track companies like Beyond Meat and Conagra.

With more transparency than the average investment platform, Public is a great option for many investors. 

You are also able to invest in stocks and funds that pay out dividends, most often on a quarterly basis. But what exactly happens to those dividends in the Public app?

We will be explaining everything you need to know about earning dividends with Public.

What Happens With Dividends On Public?

When a dividend is paid from a stock you own in Public, you have two options:

  1. You can reinvest that money back into the issuing stock/ETF automatically
  2. You can let the cash accrue in your cash balance/withdraw it to your bank account (or invest it on your own)

In the app under account and settings, you can choose what to do with dividend payments.

Public allows you to make your selection and then does the work for you. If you choose to reinvest your dividends, then Public will automatically reinvest into the company that paid the dividend.

Thanks to the use of fractional shares, you don't have to worry about having enough to purchase a whole share of the stock or ETF.

If you choose to save your dividends in your account balance, then you can either withdraw that money or you can save it in your cash balance to buy more investments in the future. 

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How Does Dividend Reinvestment Work?

Choosing to reinvest dividends could be a wise choice for some. When you reinvest your dividends, you will purchase fractional shares, or as Public calls it, “slices” of a share. 

Suppose you receive a dividend payment of $5.

If the price per share is currently $100 and you have selected to reinvest dividends, then you will automatically purchase 0.05 shares.

Fractional shares operate just like full shares. You even receive dividends from fractional shares as long as the company offers dividends.

You would earn your fractional ownership of that dividend based on the number of shares you had. 

Reinvesting vs Withdrawing Dividends

The choice to reinvest or withdraw dividends really depends on your situation and financial goals. For many who are near retirement or those wanting to supplement their income, they may opt to withdraw their dividends. 

However, in order to capture the benefits of compound interest, it may be beneficial to reinvest your dividends. When reinvesting dividends over the long term, an investor can grow the value of their portfolio significantly. 

Conclusion

People love investing in the stock market for a number of reasons. One reason is certainly dividend payments. 

Like a few other brokerages such as Robinhood, Public allows users to choose what happens with dividend payments.

Users can choose one of the following options:

  1. Auto-reinvest dividends (automatically invest dividends into the company that paid them out)
  2. Save dividends (keep your dividends in your Public account balance)

Both of these options happen automatically so you don’t have to worry about it after making your selection overall.

Dividends on Public can be a great way to make money passively.

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Article written by Sam Pennington
Sam is a personal finance writer. While in college, he dedicated his spare time to learning about personal finance, investing, and real estate. Sam currently works as a business analyst for one of the top food manufacturers in the world.

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