Margin interest at Interactive Brokers (IBKR) is calculated and charged as follows:
Calculation Method
- Interest is calculated and accrued daily based on end-of-day settled cash balances.
- It is calculated separately for each individual currency balance in the account.
- The calculation considers your cash balances, which may be reduced by:
- Collateral balance of short stock positions
- Commodity risk margin requirement
- Interest is only charged on negative settled cash balances (borrowed funds).
- The formula used is: Interest = Borrowed Amount * Annual Interest Rate * (Number of Days / 360 or 365, depending on the currency)
Interest Rates
- Rates depend on the currency and the amount borrowed.
- IBKR uses a tiered system, with different rates for different balance ranges.
- Rates generally decrease as you move to higher tiers.
- For IBKR Pro accounts, rates displayed on the website are annual rates.
- For IBKR Lite accounts, the rate is calculated based on the Tier 1 IBKR Pro rate plus 1% and is not tiered.
Charging Process
- Accrued interest is posted to the account on the third business day of the following month.
- If the accrual is less than the minimum unit for the currency type (e.g., $1.00 for USD), it will accumulate with subsequent accruals until it reaches the minimum unit before being posted.
Special Considerations
- You may be charged interest even with a positive cash balance if you have borrowed funds due to balance netting or timing differences between trades.
- Short stock proceeds cannot be used to offset debit interest.
Viewing Interest Charges
To view your margin interest charges:
- Log in to Client Portal
- Click the Performance & Reports menu followed by Statements.
- In the Custom Statements panel, click the Create "+" icon on the right-hand side.
- Enter “Interest Details” as the Statement Name and "Activity" as the Statement Type
- Under Default Sections select your desired sections
- Under Optional Sections select “Interest Details”
- Under the Section Configurations and Delivery Configuration sections make desired selections and click Continue
- Review Your Custom Statement and click Create, then click OK on the confirmation screen.
- Once back on the Statements screen, scroll down to Custom Statements and click "Run" next to "Interest Details"
- Select your preferred Period, Date, and Language
- Click Download next to your preferred Format.
This report will show you:
- Daily interest charged or paid
- Applicable interest rates
- Principal amount
Current Rates:
- For the most up-to-date margin interest rates, please refer to the IBKR Margin Rates page.
- For IB Singapore clients the most up-to-date margin interest rates, please refer to the IBKR Margin Rates page.
- Remember that margin rates are subject to change without prior notification. Always check the current rates on the IBKR website for the most accurate information.
Additional Information