How is margin interest calculated?

Margin interest is calculated using the formula: Interest = (Margin Balance × Annual Rate) ÷ 360 × Days Held. Most brokers use a 360-day year for daily interest accrual. For example, a $10,000 margin balance at 8% annual rate for 30 days = ($10,000 × 0.08) ÷ 360 × 30 = $66.67 in interest charges.

When does margin interest get charged?

Margin interest accrues every day you hold a debit balance in your brokerage account. Most brokers calculate it daily and charge it to your account monthly — usually on the last business day of the month or on your statement date. Interest continues to accrue on weekends and holidays as long as you have an outstanding balance.

What is a good margin interest rate?

Margin rates vary widely by broker and balance size. As of recent data, rates can range from under 5% at discount brokers for large balances to over 13% at some full-service brokers for small balances. Interactive Brokers, Webull, and M1 Finance are known for competitive rates. Always compare the effective annual rate (EAR) across brokers before borrowing on margin.

Is margin interest tax deductible?

In the United States, margin interest paid to buy taxable investments may be deductible as investment interest expense on Schedule A of Form 1040. However, the deduction is limited to your net investment income for the year. Interest used to buy tax-exempt securities is generally not deductible. Always consult a tax professional for your specific situation.

What is the difference between margin rate and margin maintenance?

The margin rate is the annual interest rate your broker charges on the borrowed money (the debit balance). Margin maintenance is a separate concept — it is the minimum equity percentage you must keep in your account (typically 25% under FINRA rules, or 30–40% at many brokers). If your equity falls below the maintenance requirement, you receive a margin call and must deposit more funds or sell positions.

Margin Interest Calculator – Calculate Daily, Monthly & Annual Margin Loan Interest on Brokerage Accounts

Margin Interest Calculator

Enter your margin loan balance, broker interest rate, and holding period to instantly see your daily interest charge, monthly cost, and total borrowing expense — free, no login, works worldwide.

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Margin Balance ($)

Amount borrowed from your broker

Annual Interest Rate (%)

Check your broker's margin rate schedule

Holding Period (days)

How long you plan to hold the position

Day Count Basis

Currency Symbol

Interest Compounding

Your Interest Breakdown

Enter your margin balance and rate on the left, then click Calculate to see your full interest breakdown.

Total Interest Charged

$0.00

for 30 days

Cost Breakdown

Margin Balance —

Annual Rate —

Daily Interest —

Monthly Interest (30 days) —

Annual Interest Cost —

After-Tax Interest Cost —

Margin Utilization —

Margin Call Trigger Price —

Formula Used:
Daily Interest = Balance × Rate ÷ Day Basis
Total Interest = Daily Interest × Days Held

Interest vs. Principal

Cumulative Interest Over Time

How Margin Interest Works

When you buy securities using borrowed money from your broker, the amount you owe is called your debit balance. Your broker charges daily interest on this balance at the margin rate.

Most U.S. brokers use a 360-day year to compute daily interest. The formula is simple:

Daily Interest = (Debit Balance × Annual Rate) ÷ 360

Interest accrues every calendar day — including weekends and holidays. It is typically posted to your account once per month.

Interest is charged even if you are not actively trading
The rate often decreases as your balance grows (tiered pricing)
Dividends received do not offset margin interest automatically
Your debit balance can rise if you don't pay the accrued interest

Quick Reference: Common Margin Rates

Broker / Type	Typical Rate Range	Notes
Large US banks	10–14%	Full-service accounts
Discount brokers	6–12%	Varies by balance tier
Interactive Brokers	~5–7%	Competitive, tier-based
Robinhood Gold	~6%	Flat rate for Gold members
M1 Finance Plus	~4–7%	Lower for large balances
Portfolio margin accounts	3–9%	Requires high equity

Rates change frequently. Always confirm your exact rate in your broker's fee schedule or account settings.

Margin Call & Maintenance Basics

A margin call happens when your equity falls below the broker's maintenance requirement (usually 25–40% of total position value).

FINRA minimum: 25% maintenance margin
Most brokers: 30–40% house requirement
Reg T initial margin: 50% of purchase price
When a call is issued, you must deposit funds or liquidate positions within 2–5 business days (or sooner at broker's discretion)

Rising interest charges increase your debit balance over time, which can itself push you closer to a margin call if portfolio values stay flat.

Tips to Reduce Margin Borrowing Cost

Pay down the balance faster. Every dollar paid off reduces daily interest immediately.
Compare brokers. Rate differences of 2–5% per year can mean hundreds of dollars on a $20,000 balance.
Use margin only short-term. The longer you hold borrowed positions, the more interest compounds.
Check tiered pricing. Some brokers lower your rate if your balance exceeds a threshold (e.g., $100k).
Account for tax deductibility. If eligible, the after-tax cost is lower than the stated rate.
Monitor your utilization. High margin utilization increases margin call risk if markets drop.

Common Questions About Margin Interest

Most brokers calculate margin interest using the formula: Interest = (Balance × Annual Rate) ÷ 360 × Days. The daily rate is applied to your average debit balance each day. Interest accrues on weekends and holidays. It is typically posted monthly on your account statement.

Interest accrues every single day you hold a debit balance — including non-trading days. Most brokers post the accumulated interest to your account once per month, usually on the last business day of the month or on your regular statement date.

Yes, in many cases. Margin interest paid to buy taxable investments may qualify as an investment interest expense deduction on Schedule A (Form 1040). The deduction is capped at your net investment income for the year. Interest used to purchase tax-exempt bonds is generally not deductible. Speak with a tax professional to confirm your eligibility.

If you do not meet a margin call by depositing funds or selling positions, your broker has the right to liquidate securities in your account without notice to bring your equity above the maintenance requirement. They can choose which securities to sell. This can trigger unexpected tax events and may result in selling at a bad price.

Yes, indirectly. If you do not pay the interest charges each month, they are added to your debit balance. From that point forward, interest accrues on a larger balance — which is essentially compounding. To avoid this, some investors make periodic payments to keep the debit balance from growing over time.

Daily Interest Charge by Balance & Rate (360-day basis)

How much interest accrues per day at different margin balances and annual rates.

Annual Rate	$5,000	$10,000	$25,000	$50,000	$100,000

Daily interest = Balance × Rate ÷ 360. These are simple interest values with no compounding.

Monthly Interest Cost (30 days) by Balance & Rate

Estimated monthly interest charge at different balances and broker rates (30 days × daily rate).

Balance	5% Rate	7% Rate	9% Rate	11% Rate	13% Rate

Monthly charge = Balance × Rate ÷ 360 × 30. Actual broker billing may vary slightly.

Annual Interest Projection by Balance & Rate

Total interest paid over a full year if you maintain a steady debit balance.

Balance	5% Rate	7% Rate	9% Rate	11% Rate	13% Rate

Annual cost = Balance × Rate. Simple interest — no compounding applied. Compounding increases actual costs if interest is not paid monthly.

Global Broker Margin Rate Reference

Approximate margin rates from major brokers and regions. Always verify current rates with your broker directly.

Broker / Region	Small Balance Rate	Large Balance Rate	Day Count	Billing Cycle	Notes
Interactive Brokers (US)	~6.8%	~5.3%	360	Monthly	Very competitive; tiered
Charles Schwab (US)	~13.3%	~10.8%	360	Monthly	Base rate + spread
Fidelity (US)	~13.3%	~9.5%	360	Monthly	Tiered by debit balance
TD Ameritrade (US)	~13.3%	~11.0%	360	Monthly	Now merged with Schwab
Webull (US)	~6.99%	~6.99%	360	Monthly	Flat rate
Robinhood Gold (US)	~6.0%	~6.0%	360	Monthly	Flat; Gold subscription req.
Trading 212 (EU/UK)	~3–5%	~3–5%	365	Daily	Currency-specific
eToro (EU)	6.4%	6.4%	365	Nightly	CFD overnight charges
IBKR Canada	~6.5%	~5.3%	365	Monthly	CAD margin rate
CommSec (AU)	~10%	~9%	365	Monthly	AUD debit balance

Rates are approximate and subject to change. Contact your broker or check their website for the current rate schedule before trading on margin.

Effective After-Tax Margin Rate at Common Tax Brackets

If margin interest qualifies as investment interest expense, your real cost is lower than the stated rate.

Stated Rate	10% Tax	22% Tax	24% Tax	32% Tax	37% Tax

After-tax rate = Stated Rate × (1 – Tax Rate). Only applicable if margin interest is deductible in your jurisdiction. Consult a tax professional.