Current Vanguard Margin Rates
|
Debit Balance
|
Margin Rate |
|
under $19,999 |
7.75% |
|
$20,000 – $49,999 |
7.25% |
|
$50,000 – $99,999 |
7.00% |
|
$100,000–$499,999 |
6.00% |
|
$500,000–$999,999 |
5.75% |
|
above $1,000,000 |
5.25% |
When funds are borrowed in a margin account, interest will be calculated on a
daily basis and charged based on the total debit (borrowed) balance. Interest
charges will start to accrue on margin transactions involving borrowed funds on
the settlement date and will post to your account around the end of each month.
Vanguard Brokerage base lending rate is 6.50%.
Generally, the additional rates listed below must be added to the base rate in
order to determine the true interest charge.
Online Brokers Margin Rates
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The Vanguard Group offers a broad suite of financial services to the individual investor, including many options for
investing inside of an Individual Retirement Account (IRA). As you may be aware, there are different types of IRA
accounts available, including the traditional IRA, the Roth IRA, and others. Vanguard’s site provides a tremendous
amount of information at many levels of complexity, catering to novices as well as the most sophisticated investors.
This will enable you to select the right IRA structure for your financial situation, or even open multiple IRAs with
Vanguard to give you added flexibility.
Once you have opened your IRA, you have automatic access to any of Vanguard’s
mutual fund offerings. If you also open a linked Vanguard Brokerage Services account (no fee for this), you will have
access to practically any type of financial instrument available through Vanguard.
In general, investing with Vanguard mutual funds is widely regarded as an excellent option for individuals with long-term
investment goals because of their lower-than-average expense ratios. The mutual funds available to IRA holders are typically
among the cheapest in the industry. Vanguard attributes the reduced cost of investment to the fact that they are “client-owned,” claiming that because their financial goals are aligned with the customer they are uniquely motivated to keep fees and expenses as low as possible. Brokerage clients additionally have access to Vanguard ETFs, which are very cheap to invest in, and other non-Vanguard products, which are decidedly NOT cheap to invest in. The bottom line is that IRA investing in Vanguard-owned mutual funds and ETFs is among the least expensive long-term investment options available.
It should be pointed out that the commitment to low-cost investing does not seem to apply to the purchase of financial instruments outside of Vanguard’s offerings.
Investing outside the Vanguard family is probably not advisable for most IRA holders, as the transaction fees can be quite substantial. So, as long as you stay with
Vanguard products, your costs will be low. For this reason, one strategy is to set up an IRA or other
long-term investment account with Vanguard, but to do your single-stock and other short-term investing elsewhere.
This will allow you to take full advantage of the Vanguard’s lowest-cost offerings while avoiding the more expensive Vanguard services.
Another point worth noting is that Vanguard offers several tiers of service: depending on the total amount of assets you invest with Vanguard, your transaction
fees and other costs can vary quite substantially. For example, several of Vanguard’s mutual funds offer different “share classes,” with decreasing share cost and expense
ratios available to those who can make a larger initial investment. The lowest initial investment is $1,000, and applies to, among others, all of Vanguard’s “Target Retirement”
funds. These are a good option for IRA investing, claiming to maintain an appropriate balance of assets based on the indicated retirement date. Also, once an IRA is
established and the initial investment is made in one or more funds, recurring automatic investments of as low as $1 can be made and are never subject to any transaction fees.
Keep in mind, however, that whether held within an IRA or almost any other kind of Vanguard account, each fund owned will incur an annual fee of $20. Fortunately, this expense
is easily avoided simply by signing up for account access on Vanguard.com and agreeing to receive your statements and other information electronically. Vanguard’s tiers of
service make a difference here as well: individuals with assets totaling more than $50,000 are never subject to these fees.
Vanguard Website
Vanguard margin rates are as of 2017 and are subject to change. For the most recent information on Vanguard margin interest rates visit their website.
Updated on 8/17/2017.
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