For your clients who qualify, Folio offers margin borrowing at competitive rates, enabling them to purchase additional eligible securities (including fractional shares of securities in a folio) without depositing additional funds or withdrawing cash, based on the eligible securities they already have in an eligible account. By borrowing against those securities rather than selling them, you can help keep your clients’ investment strategies intact and delay capital gains (or losses) resulting from the sale of investments. Clients should speak to a tax consultant for more details. This can also keep their assets invested with you.
Current Margin Interest Rates and Tiers
|As of October 14, 2019|
|Less than $25,000||7.25%|
|$25,000.01 - $50,000||6.75%|
|$50,000.01 - $250,000||5.75%|
|$250,000.01 - $500,000||5.50%|
|$500,000.01 - $1 million||5.25%|
|Over $1 million||5.00%|
The margin interest rates listed on this page were current when published, but are subject to change at any time without notice.
- Individual, Joint, Trust, and Business accounts are eligible for margin borrowing
- Note that only one individual account and one joint account may be margin enabled.
- Publicly traded stocks and ETFs held by us in client brokerage accounts are generally considered eligible securities for margin borrowing
- For an account to be eligible for margin borrowing, it must have a value of at least $2,000, either in cash and/or in eligible securities
- We may lend your client up to 50% of the purchase price of eligible securities
- There is no set repayment schedule, as long as your client maintains the required equity in their account
Risks of Margin Borrowing
- The main risk of margin borrowing is related to decreases in the market value of the securities in your client’s accounts. If the value of securities falls significantly, then funds will need to be added or securities sold in the account. Even if these actions are taken, we may still sell assets in the account without notifying you or the client first.
- We encourage both you and your clients to read the full FINRA margin disclosure statement, for more information.