Result — Margin interest
- Loan balance
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- Annual interest rate
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- Interest per day
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- Interest for 30 days
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- Effective rate for this period
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Educational estimate — not investment advice. Actual interest follows your broker's accrual method and rounding.
Result — Broker comparison
- Broker A interest
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- Broker B interest
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- Difference
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- Cheaper
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Educational estimate — not investment advice. Real rates can be tiered by balance and change at any time.
Result — Interest cost projection
- Average cost per month
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- Cost per year
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- Total for 6 months
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- Compounding mode
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Educational estimate — not investment advice. Assumes the loan balance and rate stay fixed during the hold period.
Result — Maximum loan
- Interest budget/month
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- Maximum loan
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- Interest per $1,000/month
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Educational estimate — not investment advice. This is a cost limit, not a recommendation to borrow to the limit.
Result — Break-even return (descriptive)
- Cumulative return needed to cover interest
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- Meaning
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Descriptive educational figure — not a return target and not investment advice. The market guarantees no return.
How margin interest is calculated
Margin interest is generally computed with the formula:
interest = loan balance × annual interest rate × (days ÷ day-count)
Verified example: a $10,000 loan at a rate of 8%/year for 30 days on a 360-day basis produces interest of $66.67 — that is 10,000 × 0.08 × 30/360 = 66.666… . On the same basis for a full year (365 calendar days on a 360 day-count), the interest becomes $811.11 — slightly above the nominal 8% because the year is counted as 360 days.
As of 9 October 2026, US stock brokers generally use a 360-day basis for daily accrual (for example Schwab and Public.com), while some brokers use 365 days (for example Wealthsimple). This convention varies between brokers and can change — always check your broker's official documents.
Educational note: all example figures on this page are calculation illustrations, not investment advice. Actual terms follow your broker's policies.
Frequently asked questions about margin interest
What is margin interest?
Margin interest is the interest cost a broker charges on funds you borrow through a margin account to buy securities. While the loan balance (debit balance) remains open, interest accrues daily and is generally charged to your account at the end of each month. This is purely a borrowing cost — separate from your stock position's profit or loss.
How is margin interest calculated?
The general formula: interest = loan balance × annual interest rate × (days ÷ day-count). For example with a 360 day-count: a loan used for 30 days is charged 30/360 of the annual rate. The calculator above also accounts for the 365 day-count variation used by some brokers.
Why do brokers use a 360-day basis instead of 365?
The 360-day basis is an old convention in the US financial industry for daily accrual: daily interest = balance × annual rate ÷ 360. As of 9 October 2026, US stock brokers generally use 360 days (for example Schwab and Public.com), but not all — Wealthsimple uses 365 days, and Tiger Brokers uses 360 for USD but 365 for AUD/HKD/CNH. Because conventions differ between brokers and can change, always check your broker's official documents.
When is margin interest charged to my account?
Interest generally accrues every calendar day — including weekends and holidays when the market is closed — and is posted to the account at month end. A loan opened before a long weekend means you pay interest for the days the market is closed. Posting schedules differ between brokers.
What is the difference between margin interest and a margin call?
Both relate to margin loans but are different problems. Margin interest is the cost you pay for borrowing funds — it keeps running while the loan is open. A margin call is the broker's demand that you add funds (or sell positions) when account equity falls below maintenance margin. Simply put: margin interest is about cost, a margin call is about forced-liquidation risk.
How can margin interest costs generally be kept down?
Descriptively, margin interest costs grow because of three factors: loan balance, interest rate, and duration. Cost-conscious investors generally watch all three — for example shortening the loan duration, comparing rates across brokers before opening a margin account, and first computing the return needed to break even against the interest. This is general educational information, not a recommendation or investment advice.
Does margin interest reduce my investment return?
Yes, mechanically: interest is a cost that reduces the net return of a margin-financed position. If the position rises 10% but the accrued interest equals 2% of the capital used, the net return is close to 8% before other costs. That is why this calculator also offers a break-even mode — to see the minimum cumulative return for the position to break even against the interest alone.