Margin Interest Calculator


Calculate Margin Interest


 
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Your margin interest will be: $0





Broker Margin Rates


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
IBKR Pro 3.08% 3.08% 3.08% 3.08% 3.08% 3.08% 3.08% 3.08% 3.08%
M1 Finance Plus 3.5% 3.5% 3.5% 3.5% 3.5% 3.5% 3.5% 3.5% 3.5%
ZacksTrade 3.56% 3.56% 3.56% 3.56% 3.56% 3.06% 3.06% 3.06% 2.81%
IBKR Lite 4.08% 4.08% 4.08% 4.08% 4.08% 4.08% 4.08% 4.08% 4.08%
Robinhood 5% 5% 5% 5% 5% 5% 5% 5% 5%
M1 Finance 5% 5% 5% 5% 5% 5% 5% 5% 5%
Sofi 4.5% 4.5% 4.5% 4.5% 4.5% 4.5% 4.5% 4.5% 4.5%
Webull 6.99% 6.99% 6.99% 6.49% 6.49% 5.99% 5.99% 5.49% 4.49%
TastyWorks 8.00% 8.00% 8.00% 7.50% 7.00% 6.50% 6.00% 5.50% 5.00%
Ally Invest 9.25% 9.25% 9.25% 9.00% 8.25% 7.00% 6.00% 5.50% 4.75%
Firstrade 9.50% 9.25% 9.00% 9.00% 8.50% 8.00% 7.75% 6.00% 5.25%
TradeStation 9.50% 9.50% 9.50% 9.50% 8.75% 8.75% 8.75% 5.50% 5.50%
Fidelity 9.825% 9.825% 9.325% 8.375% 8.325% 8.325% 8.075% 5.75% 5.50%
Charles Schwab 9.825% 9.825% 9.825% 9.325% 9.239% 9.239% 8.075% 8.075% 8.075%
Merrill Edge 9.989% 9.989% 9.989% 9.989% 9.989% 9.239% 9.239% 9.239% 9.239%
Vanguard 10.00% 10.00% 10.00% 9.50% 9.00% 8.50% 8.00% 7.00% 6.75%
Etrade 10.45% 10.45% 10.20% 9.95% 9.45% 8.95% 8.45% 8.45% 8.45%
Wellstrade 10.50% 10.50% 10.50% 10.00% 10.00% 9.00% 9.00% 8.00% 7.50%
Sogotrade 10.75% 10.75% 9.75% 9.75% 8.75% 7.50% 7.00% 6.50% 6.00%
TD Ameritrade 11.00% 11.00% 11.00% 10.25% 9.50% 9.25% 9.00% 9.00% 9.00%



Importance of the Margin Interest Calculator


The above stock margin calculator is vital for both short-term traders and long-term investors. This is because any viable trading regimen must incorporate prudent margin strategies in order to be successful, manage positions, prevent margin calls, and save money on interest expenses.

A margin loan calculator can help determine costs and avoid losses. In our calculator, simply input the amount of money you will borrow from your broker, the annual margin rate you will pay, and the number of days you plan to hold the position. Remember that the interest rate is quoted on an annual basis, but margin is charged on a daily basis. That’s why you need to specify the number of days you plan to hold the position on margin.

The amount you will borrow may be half the total cost of the position. For example, if you plan to buy $10,000 of XYZ stock, you will put up half that amount, and the brokerage firm will loan you the second half. So the borrowed amount is $5,000, not $10,000. It’s also possible to use one position as collateral to buy the entire holding of a second position.

The industry standard of 50% margin is valid at most brokerage firms for stocks and ETFs priced above a minimum level (typically $3 or $5 per share) for the initial purchase. Stocks below that price, leveraged ETFs, and bonds usually have different requirements, which means you won’t borrow 50% of the purchase price. When using the above margin loan calculator, be sure to specify the correct borrowed amount.


Choosing a Broker for Margin Trading


The margin table presents current margin rates at America’s major online discount brokerage firms. Although M1 Finance Plus currently has the lowest rate, the brokerage firm does not offer short capability or day-trading tools. Because margin can be used in several different ways, it’s important to know beforehand how you plan to use margin before choosing a broker.

Here are a few examples of how margin can be used:

- Long stock positions
- Short stock positions
- Cash withdrawals
- Day trading
- Long or short positions on bonds, leveraged ETFs, and other securities

Although a brokerage firm may offer margin accounts, loans may not be available for all possible margin activities.


Brokerage Firms Can Help With Calculations


To avoid pitfalls in trading, such as the dreaded margin call, it’s important to understand how margin works and to pay attention to your account balances. Virtually all brokerage firms today automatically calculate an account’s margin balances in real time and display these figures on a balances page on all of its software platforms, be it mobile app or computer-based trading systems. Using these calculations can help immensely in managing a margin account.


TD Ameritrade for Active Trading


To see how borrowing works in practice, we can use TD Ameritrade’s margin rates calculator. It can be found on the broker’s website. After logging in, hover over the My Accounts tab and select Balances. On the mobile app, balances are shown on the Dashboard tab. On the thinkorswim app, there is a Balances icon underneath the More tab in the bottom menu.

Active traders will find lots to like about TD Ameritrade’s margin calculator. At the very top of the balances page on the website, there is an Update link. Click on this to get up-to-the-second data on an account’s borrowing capacity.


TD Ameritrade Margin calculator


TD Ameritrade’s software displays some important details that active traders need to pay attention to, including:

Long margin value: The value of long stock positions (used to determine margin buying power).

Short margin value: The value of short stock positions (used to determine margin buying power).

Margin balance subject to interest: This is the really important one. A negative number in this field means you’re borrowing on margin. The amount will be subject to interest if it is held overnight.

Maintenance Requirement: This number is important as it displays the minimum amount of equity an account needs to avoid a margin call.

TD Ameritrade does not charge interest on a margin debit until the relevant trade settles. Active traders who understand this can trade on margin with the broker and still avoid interest charges.


Open TD Ameritrade Account



Open TD Ameritrade Account


Robinhood for Long-Term Investing


Robinhood’s margin calculator can help long-term investors manage their holdings without incurring unnecessary interest charges. On an account’s dashboard, Robinhood displays its buying power and brokerage cash. The latter is the amount of money an account has to buy securities, and the former is a larger calculation that considers not only cash, but also options collateral, pending orders, and other account issues.


Robinhood Margin calculator


Thanks to Robinhood’s Gold program, the first $1,000 in borrowed funds does not incur any interest charges. It is covered by the program’s $5 monthly fee. And with a flat interest schedule, borrowed amounts above $1,000 are easy to calculate. The broker’s 3% interest rate is scheduled to increase to 3.5% on May 4, 2022.


About the Author
Arthur Chachuna is professional personal finance blogger, and the owner of Brokerage-Review.com. He has been an avid investor for 23 years, and has background in both applied math and programming.