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Written by Ryan Scribner on March 22, 2024
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What Happens With Dividends Earned On Robinhood In 2024?

Investing in the stock market can be a lucrative endeavor, offering various avenues for generating returns.

One such method is through dividends, a form of payment made by companies to their shareholders.

Understanding how dividends work and how they are handled on platforms like Robinhood is crucial for investors.

Here's what happens with your earned dividends within the Robinhood app. 

New to Robinhood? Check out my full tutorial below!

Learn More: Robinhood Retirement 3% Match

Robinhood is a popular "all-in-one" investing app.

While they are most well-known for their commission free stock trading, they've recently shaken up the Retirement Investing World too.

Introducing Robinhood Retirement; home of the biggest IRA match on the market.

Robinhood IRA Boost

Here's what you need to know:

  • Robinhood offers 2 types of retirement accounts - the Roth IRA and Traditional IRA
  • All Robinhood investors will get a 1% Match on what they Contribute or Transfer
  • Robinhood Gold members will get a 3% Match - the biggest on the market

And don't worry, this comes with a Portfolio Builder Tool. You don't have to construct your investment portfolio from scratch if you don't want to.

Lastly, you'll even get a free stock worth up to $200 when you open a new Robinhood account using our link.

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What Is A Dividend?

A dividend is essentially a distribution of a portion of a company's earnings to its shareholders.

Typically, dividends are paid out quarterly in the form of cash, although some companies may choose to issue them on different schedules or in other forms like stock dividends.

Notably, not all companies pay dividends, especially those in earlier stages of growth or with alternative plans for their profits, such as reinvestment in the business.

Robinhood Dividends Explained

For investors using the Robinhood platform, handling dividends is relatively straightforward.

Robinhood automatically processes dividends for its users, crediting cash dividends directly into their brokerage accounts.

This means that shareholders receive their dividends without needing to take any additional action.

Robinhood provides users with convenient access to their dividend activity.

Users can view both received and scheduled dividends within the app:

  1. Open the Robinhood app
  2. Navigate to the Account section
  3. Access the Dividends tab under History

Here, users can see pending dividends, including the scheduled date and amount, as well as recently-paid dividends. This allows investors to track their dividend income and plan their investment strategies accordingly.

Dividend Reinvestment (DRIP)

One feature offered by Robinhood is Dividend Reinvestment, commonly known as DRIP.

With DRIP enabled, investors have the option to automatically reinvest the cash received from dividend payments back into the underlying stocks or exchange-traded funds (ETFs) from which they originated.

This can be a useful strategy for compounding returns over time, as reinvested dividends can purchase additional shares, potentially increasing future dividend payments.

Enabling dividend reinvestment on Robinhood is a straightforward process:

  1. Open the Robinhood app
  2. Navigate to the Account section of the app
  3. In the Investing tab, locate the Dividend Reinvestment section
  4. Toggle the switch to enable Dividend Reinvestment
  5. Complete any additional onboarding steps if prompted

Once enabled, any cash dividends received from dividend-reinvestment eligible securities will be automatically reinvested according to your preferences.

If you want to learn more about Robinhood, check out our full beginner's guide about how Robinhood works here.

Article written by Ryan Scribner
Ryan Scribner is the Co-Founder of Investing Simple and author of the personal finance book ‘From Side Hustle To Main Hustle To Millionaire’ (available on Amazon and at Barnes & Noble). He is recognized as a Top 100 Money Expert by GoBankingRates. Ryan Scribner runs a successful YouTube channel focused on money and investing, which he started in 2016. Scribner was exposed to the finance world early on with a dad who is a financial advisor. Before he started his YouTube channel, he was working and making a surplus of money which he began investing on his own. Then he started to document it on his YouTube channel, before launching the Investing Simple blog in 2018. Ryan Scribner has used his own experiences with money to show others what he’s done to be successful so that they can learn from it. He has been featured in The Wall Street Journal in a publication on The Financial Gurus Millenials Listen To. In addition, Ryan Scribner has been featured in MarketWatch, Business Insider and Forbes - where he was recognized as the #1 Must Watch YouTube Channel For Making Money.

Read more

Power Your Investing

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Get 1 Free Stock Worth Up To $200 From Robinhood!

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Investing Simple readers can claim a free stock from Robinhood worth up to $200 when they open a brokerage account and deposit any amount.

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