Interest on borrowed funds
Published: Oct 17, 2022
Updated: Apr 30, 2025
Learn more about how interest is applied to negative balances in your Margin account.
Margin account holders have the option to borrow funds from us for a fee to invest. Interest rates charged change regularly, be sure to check our website for current rates.
Interest is based on an annual rate, calculated daily and charged to the account midway through the following month.
Interest rates apply from the date the trade of the security settles, which is one day after the date of the trade for stocks (known as T+1 business day). This also includes trades for options.
If you buy stock ABC on Wednesday, May 1 the settlement date will be Thursday, May 2 (T+1 business day)
If you sell the same stock ABC on Friday, May 3, the settlement date will be Monday, May 6 (T+1 business day)
Suppose you purchase $1,000 of XYZ on margin. You would not be charged any interest until the first business day after you bought the stock.
However, if you hold a negative cash balance and you close the leveraged position, interest charges will continue until the closing trade has settled and your cash and debt is reconciled.
Note: Cash you receive from shorting shares will not offset a negative cash balance in your account when it comes to calculating interest charges.
