Does eToro Pay Dividends?

Written by Nadav Zelver

Reviewed by Wikitoro Team

Yes, eToro does pay dividends. If you have a BUY position in a dividend-paying stock, index, or ETF, the dividend amount, after tax deductions, is credited to your available cash balance. Conversely, for a SELL position, the dividend value is deducted from your available cash.

A Personal Journey

My exploration on eToro aimed to understand how it handles dividend payments. This article shares my personal experiences and insights into this broker's dividend payment process, focusing on its efficacy and transparency.

Using my verified trading account, I diversified my portfolio by investing in various stocks, indices, and ETFs known for paying eToro dividends. To test the platform's dividend payment system, I strategically placed both BUY and SELL positions across different assets. My objective was to observe firsthand how it manages payments and deductions.

My Findings Were Quite Revealing

1. For each of my open BUY positions in dividend-paying assets, I received dividend payments directly into my cash balance. These payments were made post-tax deductions, aligning with the standard practice of withholding taxes on dividends. The process was seamless and transparent, with each reflecting accurately in my account.
2. On the flip side, for the SELL positions I held in dividend-paying assets, the scenario was different. In these cases, the dividend value was deducted from my cash balance. This deduction is a standard practice in short selling, where the investor is responsible for paying out dividends to the actual stockholder. eToro's system automatically handled these deductions, ensuring that the process was straightforward and without any need for manual intervention.

Throughout my experimentation, eToro's platform remained user-friendly and intuitive. The dividend payments and deductions were clearly itemized in my account statements, allowing for easy tracking and reconciliation.

This personal experiment confirmed that the platform efficiently handles dividend payments. For investors holding BUY positions, dividends are a welcome addition to their returns, while those in SELL positions need to be mindful of the corresponding deductions. My takeaway is that eToro is not only about trading but also about providing a comprehensive investment experience, dividends included.