Reasons to Trade with Margin
A standard brokerage account is set up on a cash basis. This means every trade must be fully paid
for; if you buy $8,000 worth of a stock, you must have $8,000 in cash in your account to cover the
trade. With a margin account, you would generally only need
$4,000. The other half of the trade is borrowed from
the brokerage firm.
A margin account can also
short stocks, an advanced strategy that cash accounts can’t use. Once
again, borrowing is involved here: the stock being shorted must first be borrowed. Interest rates on
short positions are typically higher than published margin rates, which are usually the rates for long positions. The
rates shown below are the ones for long positions.
A third strategy that margin accounts can use is
option spreads.
multi-leg derivative strategies often require margin.
Advanced traders will definitely want to switch to margin trading for these and other reasons. There
is a cost, though, and you’ll want to keep that as low as possible.
Finding Low Margin Rates
Brokerage firms vary quite a bit in the amounts they charge for margin loans. Thus, it’s important to
know what you’re paying in margin interest and to shop around.
That’s where we come in. We’ve done all the research for you and can easily rank brokers from top to
bottom in terms of margin cost. Here’s the current list with the most up-to-date interest rates from
the lowest cost to the most expensive:
| Broker |
$0 - $4,999 |
$5,000 - $9,999 |
$10,000 - $24,999 |
$25,000 - $49,999 |
$50,000 - $99,999 |
$100,000 - $249,999 |
$250,000 - $499,999 |
$500,000 - $999,999 |
above $1,000,000 |
|
Robinhood
|
5%
|
5%
|
5%
|
5%
|
4.8%
|
4.5%
|
4.5%
|
4.5%
|
4.5%
|
|
IBKR Pro
|
5.14%
|
5.14%
|
5.14%
|
5.14%
|
5.14%
|
4.64%
|
4.64%
|
4.64%
|
4.39%
|
|
Webull Premium
|
5.2%
|
5.2%
|
5.2%
|
5%
|
5%
|
4.45%
|
4.45%
|
4.4%
|
4.2%
|
|
moomoo
|
6.8%
|
6.8%
|
6.8%
|
6.8%
|
6.8%
|
6.8%
|
6.8%
|
6.8%
|
6.8%
|
|
Webull
|
8.74%
|
8.74%
|
8.74%
|
8.24%
|
8.24%
|
8.24%
|
7.74%
|
7.24%
|
6.24%
|
|
ZacksTrade
|
8.83%
|
8.83%
|
8.83%
|
8.83%
|
8.83%
|
8.33%
|
8.33%
|
8.33%
|
8.08%
|
|
TradeZero
|
9%
|
9%
|
9%
|
9%
|
9%
|
9%
|
9%
|
9%
|
9%
|
|
Tradier
|
9.25%
|
9.25%
|
9.25%
|
9.25%
|
9.25%
|
9.25%
|
9.25%
|
9.25%
|
9.25%
|
|
tastytrade
|
10.25%
|
10.25%
|
10.25%
|
9.75%
|
9.25%
|
8.75%
|
8.25%
|
7.75%
|
7.25%
|
|
SoFi
|
9.5%
|
9.5%
|
9.5%
|
9.5%
|
9.5%
|
9.5%
|
9.5%
|
9.5%
|
9.5%
|
|
TIAA
|
10.875%
|
10.875%
|
10.375%
|
10.125%
|
9.875%
|
9.875%
|
9.875%
|
9.875%
|
9.875%
|
|
Ally Invest
|
11.25%
|
11.25%
|
11.25%
|
11%
|
10.25%
|
9%
|
8%
|
7.5%
|
6.75%
|
|
Citi
|
11.475%
|
11.475%
|
11.475%
|
10.975%
|
10.475%
|
9.975%
|
9.225%
|
8.475%
|
7.975%
|
|
TradeStation
|
11.75%
|
11.75%
|
11.75%
|
11.75%
|
10.75%
|
10.75%
|
10.75%
|
call
|
call
|
|
Fidelity
|
11.825%
|
11.825%
|
11.825%
|
11.325%
|
10.375%
|
10.375%
|
10.075%
|
7.8%
|
7.5%
|
|
Charles Schwab
|
11.825%
|
11.825%
|
11.825%
|
11.325%
|
11.325%
|
10.375%
|
10.325%
|
10.325%
|
10.075%
|
|
Firstrade
|
12%
|
12%
|
11.75%
|
11.25%
|
10.75%
|
10.5%
|
9.5%
|
9.5%
|
8%
|
|
Vanguard
|
12%
|
12%
|
12%
|
11.5%
|
11%
|
10.5%
|
10%
|
8.75%
|
call
|
|
E*TRADE
|
12.45%
|
12.45%
|
12.2%
|
11.95%
|
11.45%
|
10.95%
|
10.45%
|
10.45%
|
10.45%
|
|
WellsTrade
|
12.5%
|
12%
|
11.5%
|
11.25%
|
10.5%
|
10%
|
10%
|
9.5%
|
9.5%
|
Is Interactive Brokers Insured?
If you are wondering whether Interactive Brokers is safe to use, the answer is yes. IBKR is an insured broker that provides many protections for its clients.
Keep reading to learn how Interactive Brokers protects customer accounts.
Interactive Brokers Insurance Coverage: FDIC & SIPC
Interactive Brokers (IBKR) protects client money in several ways. The type of coverage depends on where your money is held and how it is used.
As a broker, IBKR gives automatic SIPC coverage for customer cash and securities. This protection is strong and meets the needs of most investors. Many also want their cash balances insured with FDIC, and IBKR provides this option as well.
Interactive Brokers uses a cash sweep program to add FDIC protection. Cash not currently used for trading is moved into selected banks that are covered by FDIC.
The total protection from both SIPC and FDIC adds up to $2.75 million.
FDIC Insurance at Interactive Brokers
To have FDIC coverage for your brokerage cash, you must join the IBKR Cash Sweep program. This program is only available for IBKR Pro accounts, so Lite customers need to upgrade.
FDIC insurance at IBKR covers up to $2.5 million across several banks in the program.
Each bank in the program can hold up to $250,000. Once that limit is reached, the next bank on the list is used. This happens automatically, but you can choose to exclude any banks you don’t want your money placed in.
Interactive Brokers Comparison
SIPC Insurance at Interactive Brokers
All IBKR brokerage accounts have automatic SIPC coverage, whether or not you are in the Cash Sweep program.
The first layer of protection is the standard SIPC insurance. This covers securities and cash in your brokerage account up to $500,000, with up to $250,000 of that amount for cash.
Interactive Brokers also provides extra insurance through Lloyd’s of London. This “excess SIPC” policy raises protection to $30 million per account, including up to $900,000 for cash.
Securities Covered By SIPC
Not all investments qualify for SIPC insurance. The SEC defines what counts as a security under SIPC coverage.
Stocks, ETFs, options, bonds, notes, CDs, and cash are covered. Futures, futures options, Forex, commodities, and cryptocurrencies are not covered by SIPC.
Additional Insurance at IBKR
Along with FDIC and SIPC protection, Interactive Brokers offers other safeguards.
One important safeguard is IBKR’s compliance with the SEC’s 15c3-3 rule, which protects customer funds. Any money above the limits of SIPC and FDIC must still be backed by the firm’s own capital. IBKR has over $10 billion in equity.
Customers are also protected through strong security measures and frequent audits of IBKR’s systems and processes. These audits are required for licensing and help make sure that trading activity, personal data, and privacy remain secure.
Updated on 4/14/2026.