Do ETFs pay dividends automatically?

If an ETF declares a distribution and you own shares on the record date, you generally receive the distribution automatically in your brokerage account.

By default, many brokers credit distributions as cash. Some brokers let you enroll in a dividend reinvestment program (DRIP) to automatically reinvest into more shares.

It's worth checking your settings because reinvestment can be helpful for long-term compounding, but cash distributions can be useful if you're using ETFs for income or rebalancing.