Interest and Financing

Interest Schedule


Interactive Brokers calculates an internal funding rate based on a combination of internationally recognized reference rates on overnight deposits (ex: Fed funds, LIBOR), bank deposit rates, and real-time market rates from the world's largest and most liquid market, the interbank short-term currency swap market.

While central banks and major money-center banks set and publish reference rates for interest dependent investments, these rates often do not reflect the exact investment costs/opportunities seen in interbank and commercial transactions. IBKR's interest model starts with the reference rates and incorporates the dynamic market pricing to produce a midpoint or "benchmark".

IBKR adds a spread around the benchmark to determine deposit and borrowing rates applicable to client balances in each currency. Spreads are tiered such that larger balances receive more favorable interest treatment due to smaller spreads around the benchmark.


Reference Benchmark Rates

IBKR's benchmark for each currency is the reference rate around which our credit, debit, stock loan and other interest rate linked calculations are determined. IBKR uses a combination of internationally recognized reference rates (such as LIBOR, Fed Funds, etc), bank deposit rates, and dynamic interbank rates determined from foreign exchange and money markets to calculate an IBKR Reference Benchmark rate.

For more information about IBKR reference benchmark click here.

For information regarding the various external reference rates that contribute to the IBKR Reference Benchmark rate click here.


CurrencyDescription for Effective Date 20190918 Rate Effective Date
USD
Reference Benchmark USD
2.250%
20190918
USD
Reference Benchmark USD Libor
2.185%
20190918
AUD
Reference Benchmark AUD
0.624%
20190918
BRL
Reference Benchmark BRL
5.900%
20190918
CAD
Reference Benchmark CAD
0.750%
20190918
CHF
Reference Benchmark CHF
(1.805)%
20190918
CNH
Reference Benchmark CNH
2.623%
20190918
CZK
Reference Benchmark CZK
1.185%
20190918
DKK
Reference Benchmark DKK
(1.633)%
20190918
EUR
Reference Benchmark EUR
(1.457)%
20190918
GBP
Reference Benchmark GBP
(0.340)%
20190918
HKD
Reference Benchmark HKD
0.310%
20190918
HUF
Reference Benchmark HUF
(0.645)%
20190918
ILS
Reference Benchmark ILS
0.336%
20190918
INR
Reference Benchmark INR
9.600%
20190918
JPY
Reference Benchmark JPY
(1.076)%
20190918
KRW
Reference Benchmark KRW
1.500%
20190918
MXN
Reference Benchmark MXN
7.907%
20190918
NOK
Reference Benchmark NOK
0.325%
20190918
NZD
Reference Benchmark NZD
1.077%
20190918
PLN
Reference Benchmark PLN
0.940%
20190918
RUB
Reference Benchmark RUB
6.851%
20190918
SEK
Reference Benchmark SEK
(1.219)%
20190918
SGD
Reference Benchmark SGD
1.499%
20190918
ZAR
Reference Benchmark ZAR
6.794%
20190918
Prior Period Benchmark Rates

IBKR accrues interest on a daily basis and posts actual interest monthly on the third business day of the following month. For detailed examples on how we calculate interest, open the Interest Paid to You and Interest Rates Charged to You on Margin Loan Balances sections on this page.


Interest Paid on Idle Cash Balances

Client accounts are eligible to receive credit interest on long settled cash balances in their securities accounts.

Accounts with a Net Asset Value (NAV) of USD 100,000 (or equivalent) or more are paid interest at the full rate for which they are eligible. Accounts with NAV of less than USD 100,000 (or equivalent) will receive interest at rates proportional to the size of the account. For example, an account with a NAV of USD 50,000 will earn credit interest at a rate equal to one-half the rate paid by IBKR to accounts with a NAV of USD 100,000 or more.

Interest accrues and is payable on a daily basis. IBKR posts the interest payments on a monthly basis on the third business day of the following month.

IBKR uses a blended rate based on the tiers outlined in the table below. The tiers on which interest rates are based are subject to change without prior notification.

For balances held in CHF, DKK, EUR, JPY or SEK, IBKR currently applies an effective negative rate to long balances held. The negative rate applied to accounts holding these currencies is the same regardless of account size. For other currencies in which the benchmark rate plus the interest rate paid is less than zero, the interest paid is 0%.

Higher Interest Rates for Large Cash Balances

We pay interest to clients for credit balances, based upon rates available in the interbank deposit market. For those clients that hold large cash balances in multiple currencies, we offer the ability to take advantage of the Forex Swaps market to potentially earn higher rates. This program is not designed for and would not benefit any client who holds a single-currency long balance. The mechanics behind this program involve the buying of a currency for settlement one day out and the selling of the same currency two days out, the difference in value between the two settlement dates being the interest earned. We automatically keep rolling the swaps until you no longer meet the minimum balance criteria, or you instruct us to halt the program. You must have at least USD $10 million in cash, and US residents must be Eligible Contract Participants (ECP) to enroll in the program.

For more information please contact our swaps desk at FXSwaps@IBKR.com or refer to our Knowledge Base.


Interest Paid to You on Positive (Credit) Cash Balances View Examples


Cash Balance Net Asset Value Calculate Blended Rate


BM = Benchmark Rate
Currency Tier Rate Paid if NAV >= USD 100,000 (or equivalent) 1
USD 0 - 10,000 0%
10,000.01 + 1.75% (BM - 0.5%)
AUD 0 - 14,000 0%
14,000.01 - 140,000 0.124% (BM - 0.5%)
140,000.01 + 0.374% (BM - 0.25%)
CAD 0 - 14,000 0%
14,000.01 + 0.25% (BM - 0.5%)
CHF 0 - 100,000 0%
100,000.01 + -2.055% (BM - 0.25%)
CNH All 0%
CZK 0 - 2,500,000 0%
2,500,000.01 + 0.935% (BM - 0.25%)
DKK 0 - 700,000 0%
700,000.01 + -1.883% (BM - 0.25%)
EUR 0 - 100,000 0%
100,000.01 + -1.707% (BM - 0.25%)
GBP 0 - 8,000 0%
8,000.01 + 0% (BM - 0.5%)
HKD 0 - 78,000 0%
78,000.01 + 0% (BM - 0.75%)
HUF 0 - 2,800,000 0%
2,800,000.01 + 0% (BM - 3%)
ILS All 0%
INR All 0%
JPY 0 - 11,000,000 0%
11,000,000.01 + -1.326% (BM - 0.25%)
KRW 0 - 12,000,000 0%
12,000,000.01 + 0% (BM - 1.5%)
MXN 0 - 190,000 0%
190,000.01 + 3.907% (BM - 4%)
NOK 0 - 85,000 0%
85,000.01 + 0% (BM - 2.5%)
NZD 0 - 15,000 0%
15,000.01 + 0% (BM - 2.5%)
PLN 0 - 400,000 0%
400,000.01 + 0% (BM - 2%)
RUB 0 - 700,000 0%
700,000.01 + 1.851% (BM - 5%)
SEK 0 - 850,000 0%
850,000.01 + -1.469% (BM - 0.25%)
SGD 0 - 15,000 0%
15,000.01 + 0.499% (BM - 1%)
ZAR 0 - 150,000 0%
150,000.01 + 5.794% (BM - 1%)

Interest Charged on Margin Loans View Examples

When calculating rates, keep in mind that IBKR uses a blended rate based on the tiers below. For example, for a balance over 1,000,000 USD, the first 100,000 is charged at the Tier I rate, the next 900,000 at the Tier II rate, etc. When determining the quoted spread, IBKR will use the set benchmark rate or a benchmark rate of 0 for all benchmark rates less than 0.

IBKR accrues interest on a daily basis and posts actual interest monthly on the third business day of the following month.

The tiers on which interest is based may change from time to time without prior notification to clients. Such adjustments are done periodically to adjust for changes in currency rates.


Balance
Calculate Blended Rate

BM = Benchmark Rate

Currency Tier Rate Charged
USD 0 - 100,000 3.75% (BM + 1.5%)
100,000.01 - 1,000,000 3.25% (BM + 1%)
1,000,000.01 - 3,000,000 2.75% (BM + 0.5%)
3,000,000.01 - 200,000,000 2.55% (BM + 0.3%)
200,000,000.01 + 2.55% (BM + 0.3%) See note below
AUD 0 - 140,000 2.124% (BM + 1.5%)
140,000.01 - 1,400,000 1.624% (BM + 1%)
1,400,000.01 - 140,000,000 1.124% (BM + 0.5%)
140,000,000.01 + 1.124% (BM + 0.5%) See note below
CAD 0 - 140,000 2.25% (BM + 1.5%)
140,000.01 - 1,400,000 1.75% (BM + 1%)
1,400,000.01 - 140,000,000 1.25% (BM + 0.5%)
140,000,000.01 + 1.25% (BM + 0.5%) See note below
CHF 0 - 100,000 1.5% (BM + 1.5%)
100,000.01 - 1,000,000 1% (BM + 1%)
1,000,000.01 - 200,000,000 0.5% (BM + 0.5%)
200,000,000.01 + 0.5% (BM + 0.5%) See note below
CNH 0 - 625,000 7.623% (BM + 5%)
625,000.01 - 6,250,000 7.623% (BM + 5%)
6,250,000.01 - 125,000,000 7.623% (BM + 5%)
125,000,000.01 + 7.623% (BM + 5%) See note below
CZK 0 - 400,000,000 4.185% (BM + 3%)
400,000,000.01 + 4.185% (BM + 3%) See note below
DKK 0 - 120,000,000 3% (BM + 3%)
120,000,000.01 + 3% (BM + 3%) See note below
EUR 0 - 100,000 1.5% (BM + 1.5%)
100,000.01 - 1,000,000 1% (BM + 1%)
1,000,000.01 - 150,000,000 0.5% (BM + 0.5%)
150,000,000.01 + 0.5% (BM + 0.5%) See note below
GBP 0 - 80,000 1.5% (BM + 1.5%)
80,000.01 - 800,000 1% (BM + 1%)
800,000.01 - 160,000,000 0.5% (BM + 0.5%)
160,000,000.01 + 0.5% (BM + 0.5%) See note below
HKD 0 - 780,000 2.81% (BM + 2.5%)
780,000.01 - 7,800,000 2.31% (BM + 2%)
7,800,000.01 - 780,000,000 1.81% (BM + 1.5%)
780,000,000.01 + 1.81% (BM + 1.5%) See note below
HUF 0 - 4,500,000,000 5% (BM + 5%)
4,500,000,000.01 + 5% (BM + 5%) See note below
ILS 0 - 80,000,000 5.336% (BM + 5%)
80,000,000.01 + 5.336% (BM + 5%) See note below
INR All 12.6% (BM + 3%)
JPY 0 - 11,000,000 1.5% (BM + 1.5%)
11,000,000.01 - 110,000,000 1% (BM + 1%)
110,000,000.01 - 20,000,000,000 0.5% (BM + 0.5%)
20,000,000,000.01 + 0.5% (BM + 0.5%) See note below
KRW 0 - 120,000,000 3.5% (BM + 2%)
120,000,000.01 - 1,200,000,000 3% (BM + 1.5%)
1,200,000,000.01 - 24,000,000,000 2.5% (BM + 1%)
24,000,000,000.01 + 2.5% (BM + 1%) See note below
MXN 0 - 1,900,000 10.907% (BM + 3%)
1,900,000.01 - 19,000,000 9.907% (BM + 2%)
19,000,000.01 - 1,900,000,000 9.407% (BM + 1.5%)
1,900,000,000.01 + 9.407% (BM + 1.5%) See note below
NOK 0 - 850,000 1.825% (BM + 1.5%)
850,000.01 - 8,500,000 1.325% (BM + 1%)
8,500,000.01 - 850,000,000 0.825% (BM + 0.5%)
850,000,000.01 + 0.825% (BM + 0.5%) See note below
NZD 0 - 150,000 2.577% (BM + 1.5%)
150,000.01 - 1,500,000 2.077% (BM + 1%)
1,500,000.01 - 150,000,000 1.827% (BM + 0.75%)
150,000,000.01 + 1.827% (BM + 0.75%) See note below
PLN 0 - 70,000,000 3.94% (BM + 3%)
70,000,000.01 + 4.94% (BM + 4%) See note below
RUB 0 - 660,000,000 11.851% (BM + 5%)
660,000,000.01 + 11.851% (BM + 5%) See note below
SEK 0 - 850,000 1.5% (BM + 1.5%)
850,000.01 - 8,500,000 1% (BM + 1%)
8,500,000.01 - 850,000,000 0.5% (BM + 0.5%)
850,000,000.01 + 0.5% (BM + 0.5%) See note below
SGD 0 - 150,000 2.999% (BM + 1.5%)
150,000.01 - 1,500,000 2.499% (BM + 1%)
1,500,000.01 - 150,000,000 1.999% (BM + 0.5%)
150,000,000.01 + 1.999% (BM + 0.5%) See note below
ZAR 0 - 1,500,000 8.294% (BM + 1.5%)
1,500,000.01 - 15,000,000 7.794% (BM + 1%)
15,000,000.01 - 1,500,000,000 7.544% (BM + 0.75%)
1,500,000,000.01 + 7.544% (BM + 0.75%) See note below

Note: May be subject to a 1% surcharge applied to the spread if financing is not pre-arranged.

Disclosures
  1. Accounts with a NAV of less than USD 100,000 (or equivalent) will be paid at a rate proportional to accounts with a NAV of USD 100,000 (or equivalent) or more. The proportion is determined by the ratio of the account's NAV to USD 100,000 (or equivalent). The negative rate applied to accounts holding these currencies is the same regardless of account size.

Calculations


Interactive Brokers (IBKR) follows the steps listed in the Calculations section below to calculate the daily interest payable or receivable on cash balances. Interactive Brokers will combine, where possible, the balances held across multiple account segments of the Integrated Investment Account; however balances across multiple Interactive Brokers accounts will not be consolidated. In the event you hold an account with Interactive Brokers Canada or Interactive Brokers Securities Japan, the calculation will be EndingSettledCash – ShortStockCollateralValue only, as there is only one account segment.



Step 1

At the end of every day, IBKR will obtain the following balances in each currency:

  • Ending Settled Cash balance in the securities account segment
  • Ending Settled Cash balance in the commodities account segment
  • Collateral balance for settled short stock positions
  • Ending Settled Cash balance in the IB-UKL segment
  • Commodity risk margin requirement
  • AdjustmentForSecuritiesDeficit

The cash balances are reported on the Daily Statement under Ending Settled Cash. The commodity risk margin requirement is the Maintenance Margin Requirement as reported on the daily Margin Report minus the total commodity option value. The AdjustmentForSecuritiesDeficit is calculated as follows:

Minimum(-Minimum(EndingSettledCash_Securities + EndingSettledCash_IBUKL,0), EndingSettledCash_Commodities – CommodityRiskMargin)

The purpose of the AdjustmentForSecuritiesDeficit is to determine the value of the excess commodities funds which will be used to offset negative balances in the securities and IBUKL segments.

The collateral balance per short stock is calculated by multiplying the prior day's closing price by an adjustment factor based on the currency, rounding this value up, then multiplying by the number of shares.

For example, the collateral balance on a USD-denominated security would be:

Collateral Balance = (stock A prior day closing price x 102%, rounded up to the nearest 1.00) x (number of shares stock A) + (stock B prior day closing price x 102%, rounded up) x (number of shares stock B)


The adjustments utilized by IBKR are as follows:

USD-denominated stock – multiply by 102%, round up to nearest 1.00
CAD-denominated stock – multiply by 102%, round up to nearest 1.00
EUR-denominated stock – multiply by 105%, round up to nearest 0.01
CHF-denominated stock – multiply by 105%, round up to nearest 0.01
GBP-denominated stock – multiply by 105%, round up to nearest 0.01
SEK-denominated stock – multiply by 105%, round up to nearest 0.01
AUD-denominated stock – multiply by 105%, round up to nearest 0.01
HKD-denominated stock – multiply by 105%, round up to nearest 0.01

Step 2

IBKR will obtain the USD-equivalent Net Asset Value in the account, consolidating the equity across the IBLLC and IBUKL accounts where possible. The Net Asset Value (NAV) is reflected in the daily account statement under the same name.

For the purposes of crediting interest on either long settled cash balances or short stock collateral values, accounts with a Net Asset Value (NAV) of USD 100,000 (or equivalent) or more are paid interest at the full rate for which they are eligible. Accounts with NAV of less than USD 100,000 (or equivalent) receive interest at rates proportional to the size of the account. For example, an account with a NAV of USD 50,000 earns credit interest at a rate equal to one-half the rate paid by IBKR to accounts with a NAV of USD 100,000 or more.

For example, if an account holds

  • Settled Long Cash 370,000 EUR
  • Settled Short Cash (370,000) USD

Calculate the USD-equivalent of the EUR balance = 370,000 x 1.2 = 444,000

Calculate the USD NAV = 444,000 – 370,000 = 74,000

As the account would have NAV less than USD 100,000, a proportionate amount of interest would be paid on the long EUR cash balance. Interest would be debited on the short USD cash balance.


Step 3

IBKR calculates an Adjusted Cash Balance for the Securities and IB-UKL segments as well an Adjusted Cash Balance for the Commodity segment. This is done using the following formula:

AdjustedCashSecurities+IB-UKL= EndingSettledCash_Securities + AdjustmentForSecuritiesDeficit + EndingSettledCash_IBUKL – ShortStockCollateralValue

AdjustedCashCommodities = EndingSettledCash_Commodities – CommodityRiskMargin - AdjustmentForSecuritiesDeficit


Step 4

IBKR will then determine how much of the AdjustedCashSecurities+IB-UKL balance should be applied to each rate tier (see tier tables). Finally, we calculate the interest using the applicable rates (also from the tier tables): 3

No interest will be paid on excess funds in the commodities segment (AdjustmentCashCommodities). In the event negative interest rates apply, interest will be charged on long balances in the commodities segment.


The numberOfDaysInYear are based on industry standards for money market activity.

  • 365: AUD, CAD, CNH/CNY, GBP, HKD, KRW, ILS, INR, NZD, RUB, SGD
  • 360: USD, EUR, CHF, CZK, JPY, SEK, NOK, DKK, HUF, MXN

Interest = ( Balance tier1 * Rate tier1 / numberOfDaysInYear )
( Balance tier2 * Rate tier2 / numberOfDaysInYear )
( Balance tier3 * Rate tier3 / numberOfDaysInYear )
etc

Accruals will be posted to the applicable account segment as follows:

If the adjusted cash balances of the security, commodity and IB-UKL segments are the same sign (i.e. all positive or all negative), the interest will be paid to the securities and IB-UKL segments on pro-rata basis while no interest will accrue on the commodity balance. If the cash balances of the security and IB-UKL segments are of opposite sign the interest of the Integrated Investment account will accrue to the segment with the higher balance.

The results of the above calculations are booked to a special "Accrued Cash" sub-account, one for each currency. Accrued Cash has the following features and functions:

  • FUNDS FOR TRADING: accrued cash is applied to trading balances, both positively and negatively.
  • WITHDRAWALS: accrued cash does not affect Settled Cash balances and therefore cannot be withdrawn. Positive accrued cash balances do not increase the available funds for withdrawal. However, negative accrued cash will reduce the funds available for withdrawal. This avoids the problem of having closed accounts with negative balances.
  • PATTERN DAY TRADING: accrued cash does not count toward Pattern Day Trading minimum balance requirements.

Each day, the new calculations for accrued interest are added to the cumulative accrued cash balances from the previous day.

Statements: Whenever the balance of accrued cash exceeds $1.00 (or USD equivalent), we will show the accrual on the Daily Statement. Accruals smaller than $1.00 are recorded in the IBKR systems but are not reported on the statements.

At the end of the month, or within the first few days of the following month, IBKR follows these steps:

  1. IBKR recalculates all the interest amounts using the calculations above. The new calculation is usually identical to the original cash accruals but may vary by small amounts due to corrections in settled balances or rates.
  2. IBKR determines the cumulative accrued cash for the previous month as the sum of the individual days.
  3. IBKR reverses this amount in the Accrued Cash sub-account at the beginning of the following month. For example, if the accrued cash balance for July was positive, we apply a debit charge to accrued cash in early August.
  4. Simultaneously, we book the final interest calculation from Step 1 above to the regular cash account. In effect, Steps 3 and 4 above convert "pending cash" to "actual cash."
  5. These transactions 2 are reported on the Monthly Statement.

Trade Date versus Settlement Date (or Value Date)

In most large financial transactions, there is a time delay between the date on which the transaction is agreed to, and the date on which it settles, i.e., when the actual payment occurs. In the case of stocks (for example US stocks) there is a two business day settlement period. If the trade is executed on a Monday, under normal settlement conditions the actual transfer of money occurs on Wednesday. If the trade occurs on Thursday, two business days later crosses the weekend so normal settlement is the following Monday. Exchange and banking holidays the fall within the settlement period will push back the settlement date.


Why is the Settlement Date Important?

Only settled money is considered for interest rate purposes. When one buys stock, one retains the rights to interest on the money until settlement date. Similarly, sellers only start to receive interest beginning on settlement date.

Settlement Dating is generally a minor consideration for stock, option, and future traders. However, due to the large amounts of capital involved, understanding the concept of Settlement Dating is critical to FOREX and fixed income (bond or money market) traders.

Disclosures
  1. The new accrued cash shown after the above postings may not be zero. The residual balances reflect the continuing accruals for the first days of the current month. For example, if IBKR processes the final interest calculation on August 6, Accrued Cash will still show the activity from August 1 through August 6.
  2. Interest will not accrue or be paid to the commodity segment of the account. Both credit and debit interest will accrue and pay to/from the securities and IB-UKL segments.
  3. The calculated interest per tier will be rounded to the nearest 0.01 (or 1 for JPY). Therefore, a calculated interest of USD 0.0051 will be rounded to 0.01.

IBKR CFD Contract Interest


IBKR Share CFDs

Tiered Rates


View Interest Structure



IBKR Index CFDs

Fixed rates


View Interest Structure


IBKR Forex CFDs

Tiered rates


View Interest Structure




CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
67% of retail investor accounts lose money when trading CFDs with IBKR (UK).
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.