costs · 6 min read
What Brokers Actually Charge to Lend You Money
Commissions went to zero and stayed there. Margin interest did not, and it is now the largest published price difference between US brokers by a wide margin — three times over, on money that does exactly the same thing wherever you borrow it.
- Written by
- Juan Manuel Gonzalez
- Published
A borrowed dollar is the most commodity-like thing a broker sells. It buys the same shares, carries the same risk and is repaid the same way. It is also the line item where brokers still differ by more than any other, because almost nobody shops for it.
What nine brokers publish
Read from each firm’s own rate card. The range is the published spread from the largest balances to the smallest, because every one of these is tiered.
| Broker | Published margin rate | What the range depends on |
|---|---|---|
| Public | 3.95%–4.90% | Debit balance. Restated from 17 September 2026 as the federal funds upper bound plus 0.20% to 1.15% |
| Robinhood | 3.95%–5.00% | Settled margin balance. Tracks the federal funds upper bound |
| Interactive Brokers | From 4.13% | A spread over a benchmark, charged as a blend across tiers |
| TradeStation | 4.25%–11.75% | Debit balance |
| Fidelity | 7.50%–11.825% | Debit balance |
| tastytrade | 8.00%–11.00% | Debit balance against a 10.00% base rate |
| Webull | 8.74% | Flat at every size — unless you pay for Premium, which pays 5.20% falling to 4.45% |
| Charles Schwab | 10.075%–11.825% | Debit balance against a 10.00% base rate |
Three brokers in our set publish no margin rate we could read at all, so they are absent rather than cheap: E*TRADE, Vanguard and Merrill Edge. eToro prices a margin sell-out but no interest rate.
The advertised rate is usually not your rate
Every schedule above except Webull’s is tiered by how much you owe, and the cheap end belongs to the largest borrowers. TradeStation’s range is the clearest case: 4.25% is real, and it applies to balances above $2,000,000. Below $50,000 the same firm charges 11.75%. Quoting the bottom of a tier table as “our rate” is standard practice across the industry and it is close to meaningless for a retail account.
The honest way to read the table is to find the tier you would actually sit in. On a $20,000 margin loan — an ordinary retail size — the entry tier is what you pay, and the entry tiers run from under 5% to nearly 12%.
Two structures worth understanding
Rates that move with the Fed
Public and Robinhood both quote margin as a spread over the upper bound of the federal funds target range, and Interactive Brokers quotes a spread over a benchmark. That means their rates change when the Federal Reserve moves, without any announcement from the broker. Public is explicit about it: from 17 September 2026 its schedule states the formula rather than the percentage.
This cuts both ways. It is more transparent than a discretionary rate, and it means the number you saw when you opened the account is not a commitment.
Rates behind a subscription
Webull charges 8.74% at every loan size on its standard tier. Its cheaper rates — 5.20% falling to 4.45% and below — apply to Premium subscribers. The headline number in any comparison depends entirely on which of the two is quoted, and a subscription cost has to be added to the interest before the comparison means anything.
What good disclosure looks like here
Charles Schwab publishes its base rate, states that it is 10.00%, and says when it last changed — 12 December 2025. That is more than most, and it is worth naming because Schwab is not the cheapest on this page. Publishing the mechanism is a separate virtue from publishing a low number, and a reader can plan around a rate they understand.
Before you borrow
- Find your tier, not the headline. On a retail-sized loan you are almost certainly in the most expensive band
- Check whether the rate is fixed at the broker’s discretion or formula-linked to a benchmark, because one of those changes without notice and the other changes without notice for a reason you can see
- If a cheaper rate requires a subscription, add the subscription to the interest
- Margin interest is charged whether or not the position works. It is the one cost on this site that compounds against you daily
Nothing here is a recommendation to borrow. Margin magnifies losses as well as gains and can cost you more than you put in. This page is only about what the borrowing costs, which is the part brokers make hardest to compare.
Sources
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