Dividends are the amount in which companies offer their shareholders from their profits or their reserve cash balance. This amount will credit directly to your bank account.

For example –  If any company declares a dividend of ₹5 and ex-date is 9th may & record date is 10th then if you want the dividend you must buy the share before 9th. That means you need to buy shares of that company on 7/8th or before that.  If you buy shares on the ex-date that is 9th then you will not receive the dividend.  Now you need to hold that shares till the record date that is 10th here. You can sell your stocks on 11. The whole process works on the T+2 settlement process. Here T= The buying date, T1 is the next day or ex-date & T2 is the record date.

Dividends can be paid anytime in a year. There are 2 types of Dividends. One is called the interim dividend. Another is called the final dividend. Some companies give both & some give just Final Dividends.