First, what is a dividend?
When a company earns a profit, it can keep all of it to grow the business, or it can give a part of that profit back to its owners — the shareholders. That share of the profit handed back to you is called a dividend. It is the company's way of saying thank you for trusting it with your money. A company can pay this reward in two ways: as cash, or as extra shares.
Cash dividend — money in your hand
A cash dividend is exactly what it sounds like: real money sent straight to your bank account. Say you own 100 shares and the company declares a cash dividend of ৳2 per share. You receive ৳200, deposited to the bank account linked to your BO account. You can spend it, save it, or buy more shares with it. Your number of shares stays the same — only your bank balance goes up.
Bonus share — more shares instead of money
A bonus share (also called a stock dividend) means the company gives you extra free shares instead of cash. If you own 100 shares and the company declares a 10% bonus, you receive 10 more shares — now you hold 110. No money lands in your bank account. Instead, you simply own a slightly bigger slice of the company. The company keeps its cash to invest in growing the business.
The simple difference
- Cash dividend: you get money, your share count stays the same
- Bonus share: you get more shares, but no money right now
- Cash is useful if you want income you can spend today
- Bonus shares suit you if you are happy to wait and let your holding grow over time
So which one is better?
Neither is automatically better — it depends on you and the company. A steady cash dividend often signals a stable, mature company that earns more than enough money. Bonus shares are common with growing companies that prefer to reinvest their cash. One thing to watch: when a company gives bonus shares, the price usually adjusts down a little to balance the extra shares, so your total value doesn't magically double. Focus on companies that reward shareholders consistently, year after year, in whatever form.
The record date — the day that decides who gets paid
To receive a dividend, you must own the shares on a specific cut-off day set by the company. This is called the record date. If your shares are sitting in your BO account on that day, you qualify — even if you bought them just a few days earlier. If you buy after that day, you miss this round of dividend (the seller gets it instead). So if a dividend matters to you, make sure you are holding the shares before the record date passes.
How and when the reward reaches you
After the record date, it takes some time for the company to process everything. A cash dividend is usually sent to your linked bank account within a few weeks. Bonus shares appear directly in your BO account, again after a short processing period. You don't need to do anything to claim them — as long as your bank and BO details are correct and up to date, the reward comes to you automatically.