How are dividends paid?
Cash payments
In the vast majority of cases, companies pay dividends in cash. The money flows from the company to your brokerage account, which deposits it into your account on or shortly after the payment date. If you need that cash for living expenses, factor in an additional few days to transfer it from your brokerage to your bank account.
Stock dividends
Some companies pay dividends in additional shares rather than cash. This is rare but does happen. Companies typically make it clear when dividends aren't paid in cash. If you receive a stock dividend but want actual cash, you'll need to sell those shares and wait for the trade to settle (one business day) before your broker will allow you to withdraw the proceeds.
Direct investment plans
While some companies offer direct stock investment plans that bypass brokerages, the widespread availability of zero-commission trading has made these programs less attractive. Most investors find managing dividends through their brokerage simpler and more convenient.