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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.
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For questions about interest rate issues, please use the Inquiry Ticket or Chat system located at the top of Account Management.
For all below examples assume benchmark rates as follows:
| Benchmark (BM) | Rate |
| US Dollar Fed Funds Effective | 1.00% |
| EONIA (Euro Overnight Index Average) | 2.080% |
| GBP LIBOR (Overnight Rate) | 4.439% |
To find the Tier Balance used with the benchmark interest rate, see the Interest Paid to You and Interest Charged to You tabs above and refer to the (BM - x.xx%) calculations.
When you have an excess positive cash balance, we'll pay you daily interest on that balance as follows:
| Statement Reflects | |||
| USD | |||
| Securities | Commodities | Total | |
| Ending Settled Cash | 50,000 | 0.00 | 50,000 |
| Tier Balance | Cash | Interest | Calculation |
| < 10,000 | 10,000 | 0.00 | (10,000 x 0/360) |
| 10,000 – 100,000 | 40,000 | 0.56 | [40,000 x (1.00%-0.50%)/360] |
| > 100,000 | 0.00 | 0.00 | |
| Credit interest received | 0.56 |
When you borrow money, we'll charge you daily interest on your borrowed money as follows:
| Statement Reflects | |||
| USD | |||
| Securities | Commodities | Total | |
| Ending Settled Cash | -500,000 | 0 | -500,000 |
| Tier Balance | Cash | Interest | Calculation |
| 100,000 | -100,000 | 6.94 | [100,000 x (1.00% + 1.50%)/360] |
| 100,000 - 1,000,000 | -400,000 | 22.22 | [400,000 x (1.00% + 1.00%)/360] |
| 1,000,000 | 0.00 | 0.00 | |
| Debit interest charged | 29.16 |
When you sell stock short and receive cash proceeds, we'll pay you daily interest on those proceeds as follows:
| Statement Reflects | |||
| USD | |||
| Securities | Commodities | Total | |
| Short Sales Proceeds | 1,500,000 | 0 | 1,500,000 |
| Excess Cash | 150,000 | 0 | 150,000 |
| Ending Settled Cash | 1,650,000 | 0 | 1,650,000 |
Calculate interest on short stock proceeds value 1,500,000
| Tier Balance | Cash | Interest | Calculation |
| < 100,000 | 100,000 | 0.00 | No payment on balances < 100,000 |
| 100,000 - 1,000,000 | 900,000 | 0.00 | [900,000 x (1.00%-1.25%)/360] |
| 1,000,000 - 3,000,000 | 500,000 | 6.94 | [500,000 x (1.00%-0.50%)/360] |
| Short credit interest received | 6.94 |
Calculate interest on security account excess cash balance 150,000
| Tier Balance | Cash | Interest | Calculation |
| < 10,000 | 10,000 | 0.00 | (10,000 x 0/360) |
| 10,000 - 100,000 | 90,000 | 1.25 | [90,000 x (1.00%-0.50%)/360] |
| > 100,000 | 50,000 | 1.04 | [50,000 x (1.00%-0.25%)/360] |
| Credit interest received | 2.29 |
When you have a positive cash balance in your securities and commodities accounts, we'll pay you daily interest on those balances as follows:
| Statement Reflects | |||
| USD | |||
| Securities | Commodities | Total | |
| Ending Settled Cash | 50,000 | 20,000 | 70,000 |
Calculate interest on security account balance 50,000
| Tier Balance | Cash | Interest | Calculation |
| < 10,000 | 10,000 | 0.00 | (10,000 x 0/360) |
| 10,000 - 100,000 | 40,000 | 0.56 | [40,000 x (1.00%-0.50%)/360] |
| > 100,000 | 0.00 | 0.00 | |
| Credit interest received | 0.56 |
Calculate interest on commodity account balance 20,000
| Tier Balance | Cash | Interest | Calculation |
| < 10,000 | 10,000 | 0.00 | (10,000 x 0/360) |
| 10,000 – 100,000 | 10,000 | 0.14 | [10,000 x (1.00%-0.50%)/360] |
| > 100,000 | 0.00 | 0.00 | |
| Credit interest received | 0.14 |
When you have a negative (debit) cash balance in your securities account and a positive (credit) balance in your commodities account, we'll charge you daily interest on the debit balance and pay you daily interest on the credit balance as follows:
| Statement Reflects | |||
| GBP | |||
| Securities | Commodities | Total | |
| Ending Settled Cash | -70,000 | 10,000 | -60,000 |
Calculate interest on security account balance -70,000
| Tier Balance | Cash | Interest | Calculation |
| < 70,000 | 70,000 | 11.39 | [70,000 x (4.439%+1.50%)/365] |
| 70,000 - 650,000 | 0.00 | 0.00 | |
| > 650,000 | 0.00 | 0.00 | |
| Debit interest charged | 11.39 |
Calculate interest on commodity account balance 10,000
| Tier Balance | Cash | Interest | Calculation |
| < 7,000 | 7,000 | 0.00 | (7,000 x 0/365) |
| 7,000 - 70,000 | 3,000 | 0.32 | [3,000 x (4.439%-0.50%)/365] |
| > 70,000 | 0.00 | 0.00 | |
| Credit interest received | 0.32 |
| Statement Reflects | |||
| EUR | |||
| Securities | Commodities | Total | |
| Short Cash Proceeds | 70,000 | - | 70,000 |
| Excess Cash | 5,000 | 25,000 | 30,000 |
| Ending Settled Cash | 75,000 | 25,000 | 100,000 |
Calculate interest on short stock value 70,000
| Tier Balance | Cash | Interest | Calculation |
| < 80,000 | 70,000 | 0.00 | (70,000 x 0/360) |
| > 80,000 | 0.00 | 0.00 | |
| Short credit interest received | 0.00 |
Calculate interest on security account balance 5,000
| Tier Balance | Cash | Interest | Calculation |
| < 8,000 | 5,000 | 0.00 | (5,000 x 0/360) |
| 8,000 - 80,000 | 0.00 | 0.00 | |
| > 80,000 | 0.00 | 0.00 | |
| Credit interest received | 0.00 |
Calculate interest on commodity account balance 25,000
| Tier Balance | Cash | Interest | Calculation |
| < 8,000 | 8,000 | 0.00 | (8,000 x 0/360) |
| 8,000 - 80,000 | 17,000 | 0.75 | [17,000 x (2.08%-0.50%)/360] |
| > 80,000 | 0.00 | 0.00 | |
| Credit interest received | 0.75 |