Margin lending from Schwab

Access the funds you need while maintaining your investing goals.

Put your portfolio to work.

Margin lending from Schwab is a flexible line of credit that allows you to borrow against the eligible securities you already hold in your Schwab International account.

When used correctly, purpose (trading) margin lending can help you execute investment strategies by increasing your borrowing power to purchase more securities. For eligible accounts in certain jurisdictions, it can also serve as a source of flexible borrowing for other short-term financial needs, known as non-purpose (withdrawal) margin. This feature is not available on all accounts.

Schwab offers competitive rates and a flexible repayment schedule.

Understand the benefits and risks of margin lending.

Whether you are looking to increase your investment opportunities or considering a convenient withdrawal line of credit, you should determine how the use of margin fits your own risk tolerance and investment goals. It's important that you fully understand your financial situation, the rules of margin borrowing, and conditions that may affect your investments.

When you use margin lending, it's important to have a plan. You should develop a risk management strategy for your investments that is consistent with your market outlook. You should also develop contingency plans for dealing with potential margin calls and have a repayment plan ready if the market turns and margin maintenance requirements or margin interest rates rise.

couple at home discussing finances

Benefits and Risks

  • Benefits

    • Buy more securities than you could on a cash-only basis.
    • Take advantage of timely market opportunities or make investment changes when you want.
    • Defer any capital gains taxes that might result from selling U.S. securities to meet your financing needs.
    • Repay the margin debit at your own pace, as long as you maintain the required level of equity in your account.
    • Enjoy a cost-effective borrowing option with competitive rates, where applicable.
    • Possibly deduct the interest against your net investment income. (Please consult your tax advisor.)
  • Risks

    • Margin borrowing increases your level of market risk, so the value of your investments can go down as well as up.
    • You must repay your margin debit balance, regardless of the underlying value of your positions.
    • Schwab can change its maintenance margin requirements at any time without prior notice.
    • If the equity in your account falls below the minimum maintenance requirements (30% for most securities), you'll have to deposit additional cash or acceptable collateral.
    • If you fail to meet your minimums, Schwab may be forced to close some or all of your positions, with or without your prior approval.

Margin lending offers competitive interest rates.

Due to Schwab's competitive rates, margin borrowing can be more cost-effective than other consumer lending options. Like any other borrowing product, you must repay your margin debit balance along with interest, regardless of the underlying value of any positions you might have secured with margin. Keep in mind that it is possible that margin interest rates may fluctuate during the time you have an outstanding debit balance. Interest is calculated daily on the amount borrowed and posted to the account on a monthly basis.

Review our current margin rates.

Last changed on July 28th, 2023, Schwab's current base rate is 11.75% and is subject to change without notice.

Debit balance Margin rate Effective rate
US$0 - US$24,999.99 Base rate + 1.825% 13.575%
US$25,000 - US$49,999.99 Base rate + 1.325% 13.075%
US$50,000 - US$99,999.99 Base rate + 0.375% 12.125%
US$100,000 - US$249,999.99 Base rate + 0.325% 12.075%
US$250,000 - US$499,999.99* Base rate + 0.075% 11.825%

*For balance tiers US$500,000 and above, contact us for more information about our latest rate offers.

Is margin lending right for you?

Before you begin using margin, you should read Schwab's Margin Disclosure Statement. Contact us if you have any questions.

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