What rights do I have as a shareholder?

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When you invest in public companies, you purchase shares of the company's stock. Each share of stock you own reflects a small portion of ownership of the company, making you a shareholder. 

A shareholder can be an individual or entity — such as a company or organization — that owns stocks in a particular company. If you invest in the stock market, you're already considered a shareholder, or what is also referred to as a stockholder. 

Shareholders, as part owners of a company, also have the right to vote in some cases regarding matters of the company and can receive dividend payouts when the company is doing well financially. 

"As long as he or she has that ownership, the shareholder has certain rights and obligations afforded to him or her by law," explains Jenna Lofton, who has an MBA in Finance and is the founder of StockHitter.com. "The rights of a shareholder include the right to attend shareholders' meetings and vote in proxy elections. A shareholder can also see corporate records, inspect the corporation's premises, receive notice of stockholder meetings, and be paid dividends."

Shareholders work by providing money upfront to companies as part of their investment. 

You can become a shareholder by investing in a publicly traded company. In exchange for providing capital, companies offer shareholders certain rights to vote and make decisions about the company.  

While it's possible to invest in private companies to become a shareholder, that process involves working directly with the company, rather than through the stock market.  

A company may already be public and traded on the stock market, or a company may go from private to public with an initial public offering (IPO). 

To get started, individuals can invest in company stock through their brokerage account and a brokerage firm by using the company's ticker symbol, which you can find using a search tool. 

Companies must file reports with the Securities and Exchange Commission (SEC) to keep shareholders updated on certain matters. For example, companies file annual reports and quarterly reports to share financial information and updates with shareholders. 

There may also be additional disclosures about mergers or other important events that affect a company as well as proxy statements. Proxy statements share information about the company as part of the shareholder voting process. You can review many of these documents on the SEC's EDGAR website.

"One of the most important rights of the shareholders is their voting power as it allows them to influence management composition," explains David Clark, lawyer and partner at The Clark Law office. "Shareholders elect the board of directors who manage the company. Their ownership of the company is also protected by law by giving them the right to purchase company shares before these are offered to the public."  

Shareholders have residual rights, which means they're entitled to a portion of a company's profit, even if the company goes under. The SEC states that companies must distribute residual profits to shareholders proportionally, based on their percentage of ownership through shares. 

"Shareholders do not actually manage the corporation. However, the law gives them the responsibility of making sure that the company is well-managed through their voting powers, power to declare dividends, and approval of the company's financial statements," says Clark. 

Shareholder rights 

Shareholders of a company are entitled to certain rights as well.

Economic rights. Shareholders invest in companies to get returns on their investment through economic gains. Shareholders are entitled to profits of a company through dividend payments or through the sale of the stock. Additionally, if a company goes under, shareholders are entitled to net proceeds of the company after it's dissolved according to Delaware Code § 281(a). 

Control rights. Shareholders have the right to vote on matters that relate to the business, including electing directors, which offers some control and influence without managing the business itself. Shareholders also typically receive proxy statements via email from their broker. If a shareholder doesn't vote, brokers still may be able to vote on their behalf by something called uninstructed voting — but only on routine matters. After the government passed Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010, it placed limits requiring the New York Stock Exchange (NYSE) and Nasdaq to prohibit voting on executive compensation and board members. 

Information rights. Shareholders are entitled to some information about the company, like financial statements. Investors may also receive information on board meeting minutes and inspect articles of incorporation if requested in writing with five day's advance notice. It's possible to review a list of shareholders as well as basic documents such as the charter and bylaws. To receive additional information when it comes to inspecting articles of incorporation or the books, investors must show that their request is legitimate and with a purpose. 

Litigation rights. Shareholders have the right to sue the corporation if there are wrongdoings from its directors that aren't in line with their fiduciary duty. Though investors can't sue for just any reason, if the company has violated certain practices, it's possible to sue with a direct lawsuit or a derivative lawsuit. 

"The Corporation Law grants common shareholders the right of ownership, power to vote, right to dividends, right to transfer ownership, right to sue, and right to inspect documents of the corporation," explains Clark. 

Quick tip: If voting is important to you as a shareholder, you may be able to attend a meeting in person. You can also vote online, by phone, or mail. Watch out for notices from your broker about proxy statements. 

When you invest in a stock, you become a shareholder or stockholder — the terms refer to the same thing, which is owning a portion of the company through shares of stock. The two basic types of shareholders are:

1. Common shareholders. This type of shareholder owns part of a company through common stock and has voting rights and potential dividend payments. 

2. Preferred shareholders. This type of shareholder doesn't have the same voting rights and is more rare. A major difference is that they have priority over dividend payments over common shareholders.

Note: There are also majority and minority shareholders. A shareholder who owns and controls more than 50% of a company's shares is a majority shareholder, while those who hold less than 50% are classified as minority shareholders. 

There are some differences between shareholders, bondholders, and stakeholders.

• Shareholders own a portion of a company by investing in their stocks and are sometimes referred to as a stockholder — because you hold stock. 
• Bondholders can buy corporate bonds to lend money to a company and in return get interest on the investment. As the bond matures, you'll be repaid your principal investment. Unlike a shareholder, you don't own a portion of the company and are only eligible to receive interest on the bond as well as your principal. 
• Stakeholders refers to a larger group of people that have an interest in a company's outcomes. Stakeholders can include employees, shareholders, customers, and more. Stakeholders can mean anyone who has a stake in the company, which is different from a shareholder who specifically owns shares of the company.

Quick tip: Whether you invest in stocks or bonds or both, make sure you understand the pros and cons of each and how your risk tolerance plays into how much you're willing to invest in each. 

The bottom line

As a shareholder, it's possible to own shares — or portions of ownership — of a public company. You can become a shareholder or might be one already if you invest in the stock market. As with anything in the stock market, there is the potential for great reward but also great risk that can come with losses. 

You may have certain rights that you can take advantage of as well, such as voting, and potentially have access to dividend payments. To help you manage as a shareholder, it's always a good idea to check out reports from the SEC to see how a company is doing so that you can be an informed investor.

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Current mortgage rates

This information has been provided by Zillow. See more mortgage rates on Zillow

Historic 30-year mortgage rates

Here are the lowest 30-year fixed rates each year, from 2011 to 2021:

In the past couple of decades, it wasn't uncommon to see 30-year rates in the 5% to 6% range. Pre-2000, rates were even higher, sometimes reaching double digits. During the pandemic, rates reached historic lows, at times dropping below 3%. 

But rates have risen from the historic lows of the pandemic, and they've risen over three percentage points since the beginning of the year. In October, rates reached 7% for the first time since 2002. 

What is a 30-year fixed mortgage?

When you apply for a mortgage, you choose between two basic types of loans: a fixed-rate mortgage or an adjustable-rate mortgage.

A fixed mortgage locks in your rate for the entire life of your loan. An adjustable mortgage keeps your rate the same for the first few years, then changes it periodically, usually once per year.

When you choose a fixed mortgage, you select the term length. A 30-year loan is the most common term length for new mortgages, but lenders offer other term options.

A 30-year fixed mortgage keeps your rate the same for all 30 years, until you've completely paid off your mortgage. If mortgage rates in the US trend upward or downward during those 30 years, you won't be affected. Whereas if you had chosen an adjustable-rate mortgage, then your rate would go up or down every year based on the economy.

Is a 30-year fixed mortgage a good deal?

If a low, stable monthly payment is important to you, a 30-year fixed-rate mortgage might be a good deal. But 30-year fixed rates are also higher right now than they've been in over a decade. If you want a lower interest rate, other options might suit you better.

Adjustable rates are lower than 30-year fixed rates, but your rate might increase once the intro rate period ends. This means that an ARM could be the better deal if you want to sell the home before your intro rate period ends, but a fixed rate may be better if you want to stay in the house for a long time.

You'll also pay a lower rate with a shorter term, like a 20-year or 15-year fixed mortgage. That's the general rule: The shorter your fixed-rate term, the lower the rate. And you'll pay less interest over time with a shorter term, because the mortgage will be paid off sooner.

But your monthly payments will be lower with a 30-year mortgage than with a shorter term, because the loan payments are spread out over a longer amount of time.

How to get a good 30-year fixed rate

Lenders take your financial profile into consideration when determining an interest rate. The better your finances are, the lower your rate will be.

Lenders look at three main factors: down payment, credit score, and debt-to-income ratio.

• Down payment: Depending on which type of mortgage you take out, a lender might require anywhere from 0% to 20% for a down payment. But the higher your down payment is, the lower your rate will likely be. If you can provide more than the minimum, you could score a better rate.
• Credit score: Most mortgages require a minimum 620 credit score, and an FHA loan lets you get a mortgage with a 580 score. But the higher your score is, the better. If you can get your credit score above the minimum requirement, then you could snag a lower rate. To improve your score, try making payments on time, paying down debts, and letting your credit age.
• Debt-to-income ratio: Your DTI is the amount you pay toward debts each month in relation to your monthly income. Most lenders want to see a maximum DTI ratio of 36%, but you can land a lower rate with a lower DTI ratio. To decrease your DTI ratio, you either need to pay down debts or earn more money.

If you have a large down payment, excellent credit score, and low DTI ratio, then you should be able to get a good 30-year fixed rate.

Is a 30-year fixed mortgage a good fit for you?

You'll probably like a 30-year fixed mortgage if you want relatively low monthly payments. 

You might prefer a shorter term if you want to be aggressive about paying off your mortgage faster, and if you can afford higher monthly payments.

You don't necessarily need to stay in a home for 30 years to benefit from a 30-year mortgage. Even if you plan to move in a few years, you can benefit from the low monthly payments.

You may prefer an adjustable-rate mortgage if you want to move before your intro period rate ends, because adjustable rates are starting lower than fixed rates. For example, if you get a 7/1 ARM and move before the seven-year mark, you'll never risk your rate increasing.

How do you find personalized 30-year fixed rates?

We're showing national average mortgage rates, but you can find personalized rates based on your down payment amount, credit score, and debt-to-income ratio.

Use our free mortgage calculator to see how today's 30-year rates will affect your monthly payments and long-term finances.

Some online lenders, such as Ally and Better.com, provide personalized rates with their own digital calculators.

You may apply for prequalification with a lender to get an idea of the rate you'll pay. If you're ready to shop for homes, you can apply for preapproval.

The pros and cons of 30-year fixed mortgages

• If mortgage rates increase, then you keep your low rate. Unlike an adjustable mortgage, a fixed mortgage locks in your rate for the entire life of your loan. If you chose an adjustable-rate mortgage, then your rate may increase down the road.
• Make low monthly payments. With a shorter fixed term, you pay off the mortgage in a shorter amount of time, so your monthly payments are higher. The 30-year monthly payments are relatively low, because you're spreading payments out over a longer period of time.
• Predictable payments can make it easier to plan a budget. Granted, certain payments that are wrapped up in your mortgage could change over the life of your loan, such as private mortgage insurance or property taxes. But your interest rate will stay the same from year to year, which could make it easier for you to plan out your monthly expenses overall.

• If mortgage rates decrease, then you're stuck with the higher rate. Locking in your rate for 30 years means you don't benefit should rates go down later.
• Shorter terms offer lower rates. You may prefer a 20-year or 15-year fixed term if you can afford higher monthly payments, because you'll land a lower rate.
• You'll pay more in interest in the long term. A higher rate isn't the only reason you'll pay more with a 30-year term than with a shorter term. Your interest has more time to accumulate, so interest payments add up over time.

What's the difference between a mortgage interest rate and APR?

When searching for rates, you'll probably see two percentages pop up: interest rate percentage and annual percentage rate (APR).

The interest rate is the rate the lender charges you for taking out a mortgage.

The APR shows you the full cost of borrowing, not just the interest rate. A mortgage's APR takes into account things like points and fees paid to the lender in addition to your interest rate. 

The APR gives you a better idea of how much you'll actually pay to get a mortgage.