What is an Interim Dividend?

An interim dividend is a distribution to shareholders that has been both declared and paid before a company has determined its full-year earnings. Such dividends are frequently distributed to the holders of a company's common stock on either a quarterly or semi-annual basis. It is common for this dividend to accompany the release of a company’s interim financial statements.

The board of directors may set an interim dividend at a lower amount than the dividend that it issues following the release of the company's annual financial results, so that the interim dividend does not impair its ability to operate if the annual results turn out to be lower than initially expected.