TD Ameritrade Margin Rates With Chart And Details

TD Ameritrade Margin Rates With Chart

TD Ameritrade is a renowned broker that offers an electronic trading platform for financial assets trading that includes common stocks, preferred stocks, futures contracts, exchange-traded funds, forex, options, cryptocurrency, mutual funds, fixed income investments, margin lending, etc. TD Ameritrade is one of the largest brokers in the USA with more than 11 million client accounts and more than $1 trillion in assets. Today I will discuss TD Ameritrade margin rates and other important details of this broker. So, if you are planning on investing money with TD Ameritrade then this article will be very helpful for you.

The margin rates of TD Ameritrade usually vary due to the base rate and the size of the debit balance on the customer margin trading account. So, when TD Ameritrade decides the base rate, they consider some indicators that include commercially recognized interest rates, industry conditions, an extension of credit, the availability of liquidity in the marketplace, competitiveness of the marketplace, and overall market conditions. Therefore, your particular interest rate will vary depending on the base rate of the interest period.

What Is Margin Interest?

Margin interest is a rate that is usually charged on loans made between you and your broker regarding your portfolio’s assets. Usually, the margin interest is charged after the settlement of the purchase or withdrawal transaction. Depending on the base rate of your margin debit balance you will be charged. If your broker account is margin enabled then you can easily see your base lending rate by clicking on “View margin rate” under “Margin.”

Overview Of TD Ameritrade

Overview Of TD Ameritrade

TD Waterhouse USA was originally owned by Toronto Dominion bank which was bought by Ameritrade Holdings in 2006 and then was renamed TD Ameritrade. TD Ameritrade is a good option for long-term investors than short-term or day traders. TD Ameritrade has excellent commission prices, $0 a trade which is best among all the brokers. If you are looking for a broker account for research and portfolio management then TD Ameritrade is 2nd to none. The best part of TD Ameritrade is, it offers all the general investment products including stocks, options, ETF’s, bonds, annuities, commodities, and many more. Moreover, if you are a long-term investor then you will find their mutual fund selection and fees very appealing. Some of the key benefits of TD Ameritrade mutual funds are; they are premier mutual funds with no loads, no transaction fees, large-cap value, mid-cap blend, international growth, etc. However, while investing with TD Ameritrade, you have to decide the proper asset allocation based on your age, cash-flow needs, investment horizon, etc. to make the most out of your investment.

TD Ameritrade Margin Interest Rates

Usually, TD Ameritrade’s margin rates are high and the current TD Ameritrade base rate is 8.25%. Below are the details of TD Ameritrade margin interest rates – 

Debit BalanceMargin Interest Rates
Above $499,999call 800-655-4777
$250,000 – $499,9997.50%
$100,000 – $249,9997.75%
$50,000 – $99,9998.00%
$25,000 – $49,9999.00%
$10,000 – $24,9999.25%
Under $10,0009.50%

TD Ameritrade Cash Interest Rates

Dollar RangeInterest RateAnnual Percentage Yield
$0.01 – $4,999.990.01000%0.05%
$5,000.00 – $24,999.990.02000%0.06%
$25,000.00 – $99,999.990.03000%0.07%
$100,000.00 – $199,999.990.03999%0.09%
$200,000.00 – $499,999.990.04999%0.15%
$500,000.00 – $999,999.990.06998%0.30%
$1,000,000 +0.08996%0.45%

What Are The Requirements To Open TD Ameritrade Account?

If you want to open a broker account at TD Ameritrade then you’ll need just a couple of things to get started – 

1. Social Security number/ Individual Taxpayer Identification Number

2. Employer name and address (if applicable)

3. Flat $6.95 fee per trade

4. No minimum cash deposit

5. For margin trading, a deposit of at least $2,000 in the account

How To Open TD Ameritrade Account

The process of opening a TD Ameritrade account is very simple. Follow the below steps accordingly – 

1. First, visit TD Ameritrade’s account application page

2. Next, you have to provide your name and valid email ID

3. After that, you have to choose a TD Ameritrade account type

4. Then you have to enter some personal information

a) Social Security number

b) Mailing address

c) Date of birth

d) Employment information

5. Next click on the submit button

6. In the next section, you will have the chance to review and edit information (if required)

7. Once you’ve done with reviewing, click on the continue button for the next step

8. Next, you have to agree to the terms and conditions to open up the account

9. In the next step, you will have to set your username, password, and security questions for online login

10. Once you add the required information, you have successfully set up your TD Ameritrade brokerage account

Types Of TD Ameritrade Account And Requirements

TD Ameritrade allows you to open various types of accounts depending on your desires. Some common TD Ameritrade accounts are – 

Most Common

1. Individual

2. Joint tenants WROS (with rights of survivorship)

3. Traditional IRA

4. Roth IRA

5. Rollover IRA

6. UTMA/UGMA           

Joint/Minor

1. Joint tenants WROS (with rights of survivorship)

2. Joint tenants in common

3. Joint community property

4. Joint tenants by the entirety

5. Guardianship or conservatorship

6. UTMA/UGMA

7. Minor IRA

8. Minor Roth IRA

Retirement

1. Traditional IRA

2. Roth IRA

3. Rollover IRA

4. Minor IRA

5. Minor Roth IRA

6. SEP IRA

7. SIMPLE IRA

8. Individual 401(k)

9. Money purchase pension plan

10. Profit-sharing plan for small businesses

11. Other tax-exempt trusts

Education Savings

1. Coverdell Education Savings

2. UTMA/UGMA

Business/Trust

1. Personal trust

2. Limited partnership

3. Partnership

4. Investment club

5. Limited liability company

6. Sole proprietorship

7. Corporate

8. Non-incorporated organization

9. Individual 401(k)

10. Money purchase pension plan

11. Profit-sharing plan for small businesses

12. Other tax-exempt trusts

Managed Portfolios

1. Selective Portfolios

Other

1. Estate

2. Beneficiary IRA

FAQs About TD Ameritrade Margin Rates With Chart and Details

Can You Negotiate Margin Rates TD Ameritrade?

Yes, you can negotiate margin rates of TD Ameritrade. If you have a debit balance of $500,000 or more then you can make a phone call to TD Ameritrade and negotiate the margin rates.

How Margin Interest Is Charged To TD Ameritrade?

Usually, TD Ameritrade’s margin interest is accrued daily but they charge the margin interest monthly. The margin rate is calculated based on a formula. The formula is – 

Interest Rate x Margin Debit / 360 = Daily Interest Charge

Finally, the amount of the debit balance determines the annual interest rate on that particular day.

Which Brokerage Has The Lowest Margin Rate?

There are quite a few brokerages available that have the lowest margin rate. They are – 

1. Interactive Brokers Pro 1.55%
2. M1 Plus 2.00%
3. Interactive Brokers Lite 2.55%
4. M1 Finance 3.50%    

How Do You Avoid Paying Margin Interest?

There is only one way to avoid paying margin interest and it is to completely pay for the trades before settlement. Moreover, if you want to withdraw money from your account then you have to make sure that there is enough balance on your broker account to withdraw the amount without a margin loan and avoid interest.

How Often Does TD Ameritrade Charge For Margin?

Every month TD Ameritrade charges for margin. The margin interest is calculated daily but charged monthly.

What Are The Requirements To Open Selective Portfolios In TD Ameritrade?

Selective Portfolios are usually managed by professionals and there are few requirements available to open this type of account at TD Ameritrade. They are –

1. Minimum investment: $25,000
2. Choose from a range of portfolios
3. Portfolio specialists available to help
4. Built with nonproprietary ETFs or mutual funds
5. Performance tracking is available for desktop or mobile devices

How Do You Pay Off The Margin Balance?

If your margin account has stocks then you have to sell the stocks. The money from selling your stocks will first pay off the margin balance automatically and then the rest of the money will be available as cash to your account.

Last Updated on October 3, 2021 by Musa D

Scroll to Top