Best Brokerage Margin Accounts With Lowest Margin Rates In 2016

Broker Margin Rates


Interest rates in the United States have been at the historic lows for a number of years now. While some online brokers provide their customers an opportunity to take advantage of this unique environment by offering low margin interest rates, others are still charging an arm and a leg for lending money to investors and traders. Below we are listing current 2016 margin interest rates of the major U.S. online brokerage companies for readers to compare.


Broker With Lowest Margin Rates


As anyone can see, Interactive Brokers offers the cheapest margin account along with the lowest published margin rate of only 1.86% on balances under $100,000. This is not surprising, because this deep discount broker targets as clients very active traders and hedge funds.

There are a few points that prospective customers thinking about opening an account at IB should keep in mind. First, Interactive Brokers wants as customers only experienced investors and doesn't like dealing with beginners: minimum two years of experience in trading and account management are actually some of the requirements for opening an account at the firm. Second, there is a steep $10,000 minimum to open most accounts at the company, and $10 per month minimum commission requirement to avoid $10 monthly fee (rises to $20 monthly if account balance is less than $2,000) and $10 market data fee. And last, margin calls at the company are almost instant and merciless. Unlike many other brokers, in case of margin call there is usually no time to add funds to account to avoid position liquidation. You can read more about the broker in Interactive Brokers review here.

Optionshouse offers the second best combination of low margin rates account along with the cheap flat-rate commissions. This online broker targets as customers options traders and very active investors. Unlike Interactive Brokers, it welcomes beginners and long-term investors. There are no account inactivity fees at the company, and minimum to open is $0 for cash account and $2,000 for margin account. We discuss Optionshouse's pros and cons in more detail in Optionshouse review under this link.

The third place in our brokerage margin rates comparison goes to Motif Investing, that offers rates very similar to Optionshouse's. However, the company created a very unique and controversial website design. The firm's approach to investing will not suite many traditional investors and active traders.


Brokerage Reviews


Low margin interest rates, while important for trading, should not be the only deciding factor when choosing a brokerage firm. Make sure to read brokerage reviews containing lots of useful information before opening any brokerage account.


Brokerage Margin Interest Rates Table


Below we are listing margin interest rates for the following brokers: Interactive Brokers, Merrill Edge, TD Ameritrade, Charles Schwab, Etrade, USAA, Fidelity Investments, Scottrade, Vanguard, Motif investing, Tradeking, Optionshouse, Wellstrade/Wells Fargo, Optionsxpress, Firstrade, Capital One Investing, Sogotrade, and TradeStation.

Broker $0 - $4,999 $5,000 - $9,999 $10,000 - $24,999 $25,000 - $49,999 $50,000 - $99,999 $100,000 - $249,999 $250,000 - $499,999 $500,000 - $999,999 above $1,000,000
Interactive Brokers 1.86% 1.86% 1.86% 1.86% 1.86% 1.36% 1.36% 1.36% 0.86%
Motif 6.75% 6.75% 6.75% 6.75% 5.75% 5.75% 4.75% 4.25% 4.25%
Capital One 7.70% 7.70% 7.50% 7.25% 6.70% 6.50% 5.25% 4.90% 4.70%
OptionsHouse 7.75% 7.75% 7.75% 7.25% 6.50% 6.00% 5.25% 3.50% 3.25%
Vanguard 7.75% 7.75% 7.75% 7.25% 7.00% 6.00% 6.00% 5.75% 5.25%
Firstrade 7.75% 7.75% 7.75% 7.75% 7.00% 6.50% 6.00% 5.00% 4.50%
Scottrade 8.00% 8.00% 7.75% 7.50% 7.00% 6.50% 6.25% 5.75% 5.25%
USAA 8.24% 8.24% 8.24% 8.00% 7.24% 7.24% 6.75% 6.75% 5.50%
Optionsxpress 8.25% 8.25% 8.25% 8.25% 7.25% 7.00% 6.75% 6.50% 6.00%
TradeStation 8.50% 8.50% 8.50% 8.25% 7.75% 7.75% 7.25% 7.25% 6.75%
Charles Schwab 8.50% 8.50% 8.50% 8.00% 7.00% 6.875% 6.75% 6.75% 6.25%
Fidelity 8.575% 8.575% 8.075% 7.575% 7.075% 6.575% 6.575% 3.750% 3.750%
Etrade 8.69% 8.69% 8.69% 8.19% 7.69% 6.39% 5.39% 4.39% 4.14%
Merrill Edge 8.875% 8.875% 8.875% 7.750% 6.375% 6.375% 6.125% 6.125% 5.500%
TradeKing 9.00% 8.00% 8.00% 8.00% 7.00% 6.25% 4.75% 4.25% 4.25%
Sogotrade 9.00% 9.00% 8.00% 8.00% 7.00% 5.75% 5.25% 4.75% 4.25%
TD Ameritrade 9.25% 9.25% 9.00% 8.75% 7.75% 7.50% 7.25% 7.25% 6.50%
Wellstrade 9.25% 9.25% 9.25% 8.75% 8.25% 7.75% 7.25% 6.75% 6.25%


Updated on 10/10/2016.





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