Interest can be charged to accounts for a few reasons, but it is most commonly charged when you are borrowing funds from IBKR. This is typically associated with carrying a debit settled cash balance. However, customers should also note that carrying a large credit balance in certain currencies may also be subject to paying credit interest fees due to the negative benchmark rates currently imposed by several central banking systems. Our current rates, including the applicable benchmarks, are available on the Margin Rates and Interest Rates pages of our website.
Clients should note, accounts with a Net Asset Value (NAV) of USD 100,000 (or equivalent) or more will be paid interest at the full rate for which they are eligible. Accounts with NAV of less than USD 100,000 (or equivalent) will receive interest at rates proportional to the size of the account. For example, an account with a NAV of USD 50,000 will earn credit interest at a rate equal to one-half the rate paid by IBKR to accounts with a NAV of USD 100,000 or more.
It is important to consider that short stock collateral and futures risk margin are backed out of settled cash amounts when determining interest. On the other hand, short stock positions may be subject to hard to borrow fees, as detailed on the Securities Financing page of our website.
Interest calculations are made on a one day lag and accruals will be reflected on accounts once the calculated amount exceeds a posting threshold of $1.00 (or equivalent). The specific methodology for computing this amount can be found on the Interest Calculations page of the IBKR website.