First of all, what does “being on margin” mean? When “you’re on margin” it means that you’re borrowing money to purchase stock. Options are non-marginable, meaning you cannot buy options on margin, but you can use margin to buy stock.


When is it charged?
Margin interest charges are taken out of the account on the first business day after the 15th of the month (this usually falls on the 16th). The interest is charged for the period starting on the 16th of the previous month and ending on the 15th of the current month. Margin interest is also charged for margin balances on weekends and holidays. Below is an example of a margin interest charge in the desktop platform's History tab. In the History tab, you'll see a Money Movement entry that lists the timeframe and the margin interest rate.


How is margin interest calculated?
Margin interest is accrued daily and charged monthly. The interest accrued each day is computed by multiplying the settled margin debit balance by the annual interest rate and dividing the result by 360. The annual interest rate is determined by the amount of the debit balance on that particular day.

What is settled margin debit balance?
Settled margin debit balance is the debit balance in an account as determined by the settled transactions.


To learn how to find out if your account is margining securities, then please click here.

 

Debit BalanceRateBase Rate Adjustment
< 25,0008.00%+1.00%
25,000 - 50,0007.50%+0.50%
50,000 - 100,0007.00%0.00%
100,000 - 250,0006.50%-0.50%
250,000 - 500,0006.00%-1.00%
500,000 - 1,000,0005.50%-1.50%
> 1,000,0005.00%-2.00%


Base Rate: 7%
Base rate is subject to change without notice

Additionally, you may view this table by visiting our Commissions and Fees page by clicking here.