Charles Schwab Margin Rates
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Debit Balance
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Margin Rate
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$0 - $24,999.99
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13.075%
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$25,000 - $49,999.99
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12.575%
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$50,000 - $99,999.99
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11.625%
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|
$100,000 - $249,999.99
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11.575%
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$250,000 - $499,999.99
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11.325%
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$1,000,000+
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call 877-752-9749
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The Lowest 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 |
|
Moomoo
|
6.8%
|
6.8%
|
6.8%
|
6.8%
|
6.8%
|
6.8%
|
6.8%
|
6.8%
|
6.8%
|
|
IBKR Lite
|
7.33%
|
7.33%
|
7.33%
|
7.33%
|
7.33%
|
7.33%
|
7.33%
|
7.33%
|
7.33%
|
|
Robinhood Gold
|
7.5%
|
7.5%
|
7.5%
|
7.5%
|
7.5%
|
7.5%
|
7.5%
|
7.5%
|
7.5%
|
Margin Interest Calculator
Calculate how much you will pay Charles Schwab in margin interest with
Schwab Margin Interest Calculator.
Margin Accounts and Rates at Schwab
Cash accounts are only the beginning of what Charles Schwab has to offer. The brokerage firm also has margin accounts and very good software platforms, which means the sky is really the limit here. Here’s the scoop on using margin with the broker:
Setting Up Margin at Schwab
At Schwab, an account must be opened as a margin account, or margin must be added to an existing cash account before any borrowing can take place. Either procedure is really easy to do.
On an initial application, make sure margin account is selected. On an existing cash account, log into the website (not the mobile app or trading platform) and hover over the Service tab. It’s on the right-hand side in the top menu. Next, click on Account Servicing in the drop-down window. On the page that appears, click on the link for the Options, Margin and Short Trading Application. Everything is handled online, and options trading can be added at the same time that margin is added.
Cost of Margin at Schwab
Schwab doesn’t charge anything for opening a margin account or for switching a cash account to margin. The same commission schedule applies to margin accounts, and this means $0 commissions on stocks and ETFs.
Using margin will of course come with interest charges. Interest is calculated daily and assessed to an account at the end of the month.
Margin in Individual Retirement Accounts
An IRA at Schwab can add limited margin. Because this is a retirement account, it can’t borrow against existing holdings. That’s why it’s called limited margin. But an IRA with limited margin can trade with unsettled funds. This allows IRAs to day trade at will ($25,000 account equity still required).
Rules for Margin Accounts at Schwab
In order to borrow money, a margin account at Schwab has to have at least $2,000 in marginable securities and/or cash. Before any borrowing takes place, Schwab’s software will calculate the amount of money an account can borrow. This calculation can be found on the Balances page, which is accessible through the Accounts tab.
Schwab accounts don’t have any fixed schedule to pay back borrowed funds as long as they stay within margin maintenance requirements, which we will now turn to.
Margin Requirements at Schwab
For long stock positions, Schwab has an initial margin requirement of 50%, which becomes a 30% maintenance requirement. This assumes a share price above $3. Any security below that price cannot be bought on margin.
For short positions, the initial requirement is once again 50%, although the maintenance figure varies, depending on the price of the asset. Above $16.66, the requirement is 30%. It drops to 100% at $2.50.
Leveraged exchange products have higher percentages, some as high as 90%.
As with other brokerage firms, Schwab will issue a margin call anytime an account’s equity drops below a minimum maintenance level.
Finding Margin Details
On Schwab’s web-based trade ticket, there is a Buying Power link. Click on this to find details on margin-enabled buying ability. This number can also be found by going to the Balances detail page, which will be found under the Accounts tab.
Margin Education
Schwab has quite a few educational resources on brokerage margin. During our investigation, we found articles, graphics, and videos covering a wide variety of margin-related issues. To find these materials, hover over the Products tab in the top menu and click on the Margin link (located in the Investment Products sub-section).
Broker Best Margin Rates
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.
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