Stocks: Decreasing Interest In Fixed Deposits, Look At Alternative Ways, This Is The Reason

There are changes in the thinking of investors. They are also changing their thoughts according to the changing times. Especially interest in fixed deposits is decreasing. This is because the interest rates are not rising in line with rising inflation. This reason seems to be the reason why traditional investment method like fixed deposits is declining. Retail inflation based on Consumer Price Index (CPI) is over 7.4% while FD is between 6 to 7 percent. Keeping this in mind, people are looking for alternatives that can earn them better returns than fixed deposits. This is where high dividend-yielding stocks become a good alternative. So let’s know what is dividend..

The dividend is the distribution of a portion of the company’s earnings to the company’s shareholders. Generally, dividends can be issued in the form of cash payment, stocks, or some other form. Most companies usually pay out cash in dividends. Simply put, you earn dividends on investment in stocks, just like you earn interest by investing in a fixed deposit. A company’s dividend is decided by its board of directors. This requires the approval of the company’s shareholders. However, it is not mandatory for the company to pay dividends. A company usually declares a dividend when it discloses its financial results. A company may declare dividend quarterly, half-yearly, annually, or at all intervals depending on the performance of the company, at the discretion of the Board of Directors.

The dividend yield is a measure of the number of cash dividends paid to shareholders relative to the market value per share. It is calculated by dividing the dividend per share by the market price per share and multiplying the result by 100. For example, if a company declares a dividend of Rs.12 and its share price is Rs.120 then the dividend yield is calculated as (10/120*100 = 10%). Check 5paisa.com for complete details of companies scheduled to pay dividends this year.

Dividend declaration date

It is the date on which the company declares dividends to the stockholders. The press release mentions the dividend distribution date, dividend amount, record date, and payment dates.

Record date

The date on which your name is entered in the list of stakeholders of the company is called the record date. Register in the company’s record book but the stockholders cannot get the dividend.

Ex-Dividend Date

The company sets the stock exchange date after setting the record date. Generally, the ex-dividend date is declared two days before the record date is declared. To get the dividends.. one has to buy the stocks before the ex-dividend date. Otherwise, you will not get dividends.

Date of payment

This payment date is set by the company. Dividend deposits are paid to stockholders on this day. Dividends are available only to stockholders who have purchased stocks before the ex-dividend date.