When it comes to investing in financial markets, there are several crucial factors to consider, and margin rates are among the most important ones. They directly impact your trading costs and influence your overall profitability in leveraged trading.
Choosing a broker with low-interest margin rates can bring significant advantages, including increased flexibility in leveraging your capital without incurring excessive costs. However, finding a broker with low margin rates can be overwhelming due to the many options available.
In this article, we will focus on selecting brokers in Europe with the lowest margin rates to optimize your investment potential. Through extensive research and analysis, we have compared the borrowing rates charged across different asset classes and provided some insights into the features of the brokers’ trading platforms.
Overview of brokers with the lowest margin rates in Europe for 2024
Interactive Brokers | Best Overall
Interactive Brokers offers low-cost margin trading options, with the cost depending on the currency and trading volume (it is defined as a benchmark rate + a spread). The broker also gives access to various asset classes, including Forex, stocks, bonds, commodities and more.
XTB | Best for Forex
XTB is a well-known online broker having an exceptional customer support team compared to other brokers. They provide low-cost margin trading options, particularly in Forex, along with competitive spreads.
eToro | Best for simple pricing structure
eToro is the leading social trading broker offering a wide range of trading options with the ability to copy the trades of other experienced investors. Their margin trading fee structure is simple, and you can check the daily overnight charge before opening any position, providing transparency and allowing you to know the costs in advance.
Disclaimer: eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk.
CMC Markets | Best for CFD trading
CMC Markets (CMC) is a global CFD broker with a massive portfolio of over 12,000 tradable products. They offer low fees on margin trading and competitive fees on short selling, making them an attractive option for investors looking for cost-effective leveraged trading with the ability to engage in short selling.
Plus500 | Ideal for demo account
Plus500 is another CFD broker that provides access to over 2,800 tradable CFDs, including Forex, Shares, Commodities, Indices, ETFs, Options & Crypto. Their platform features competitive spreads and no commission. Their margin rates on crypto are among the lowest on the market. It is ideal for investors looking for a demo account.
Disclaimer: 82% of retail CFD accounts lose money.
DEGIRO | Best for European investors looking for ETF trading
DEGIRO is a popular broker among European investors, offering commission-free ETF investing. It provides attractive features and low-cost solutions, making it an ideal platform for European investors looking to engage in margin trading while minimising their expenses. Their margin rate structure is very simple; it is the same percentage across different markets.
Brokers Margin Rates – Analysis
Now, let’s examine how these brokers stack up against each other in terms of margin rates or overnight funding across various asset classes.
The tables below indicate the corresponding annual interest charges or credits for your outstanding margin positions. A positive percentage implies that your account will be charged the specified interest, while a negative percentage indicates that your account will be credited with the respective interest. It’s important to note that these percentages are subject to change based on the reference rate and the underlying asset’s movement.
Also, be aware that some percentages have been calculated by us for the purpose of facilitating a comprehensive and accurate comparison of the interest charges across different brokers. This is because certain brokers may state their interest charges on a daily or dollar terms basis.
Brokers in Europe with the Lowest Margin Rates on Stocks Compared
| Broker | US Stocks | UK Stocks | EU Stocks | |||
| Long | Short | Long | Short | Long | Short | |
| IBKR (<$100,000) | 6.58% | -3.58% | 5.879% | -2.879% | 4.597% | -1.597% |
| DEGIRO* | 5.90% | |||||
| CMC Markets | 8.07% | -1.64% | 8.41% | -1.13% | 6.13% | 0.22% |
| XTB | 9.69% | 0% | 8.80% | 0.33% | 7.75% | 1.37% |
| eToro | 6.4% + LIBOR
(11.51%) |
2.9% + LIBOR
(8.01%) |
6.4% + LIBOR
(11.51%) |
2.9% + LIBOR
(8.01%) |
6.4% + ESTR**
(9.56%) |
2.9% + ESTR
(6.06%) |
| Plus500 | Variable | Variable | Variable | Variable | Variable | Variable |
* subject to conversion fees
** European Short-Term Rate
Brokers in Europe with the Lowest Margin Rates on Indices Compared
| Broker | US Indices (US500) | UK Indices (UK100) | European Indices (FR40) | Australian Indices (AU200) | ||||
| Long | Short | Long | Short | Long | Short | Long | Short | |
| IBKR
(<$100,000) |
6.58% | -3.58% | 5.879% | -2.879% | 4.597% | -1.597% | 5.28% | -2.28% |
| CMC Markets | 8.067% | -2.04% | 7.41% | -1.42% | 6.13% | -0.15% | 6.83% | -0.80% |
| eToro | 3% + LIBOR
(8.11%) |
3% – LIBOR
(-2.11%) |
3% + LIBOR
(8.11%) |
3% – LIBOR
(-2.11%) |
3% + LIBOR
(8.11%) |
3% – LIBOR
(-2.11%) |
3% + LIBOR
(8.11%) |
3% – LIBOR
(-2.11%) |
| XTB | 9.18% | 0% | 9.05% | 0.07% | 7.74% | 1.37% | 9.69% | 0 % |
| Plus500 | Variable | Variable | Variable | Variable | Variable | Variable | Variable | Variable |
Brokers in Europe with the Lowest Margin Rates on Commodities Compared
| Broker | Gold | Silver | Oil | |||
| Long | Short | Long | Short | Long | Short | |
| IBKR (<$100,000) | 6.58% | -3.58% | 6.58% | -3.58% | 6.58% | -3.58% |
| CMC Markets | 6.35% | -4.16% | 6.50% | -4.20% | 6.94% | -0.91% |
| eToro | 7.77% | -4.73% | 8.30% | -5.25% | 2.17% | 2.83% |
| XTB | 10.18% | 0% | 10.18% | 0% | 9.69% | 0% |
| Plus500 | Variable | Variable | Variable | Variable | Variable | Variable |
Brokers in Europe with the Lowest Margin Rates on Forex Compared
| Broker | EURUSD | GBPUSD | AUDUSD | USDJPY | ||||
| Long | Short | Long | Short | Long | Short | Long | Short | |
| IBKR (<$100,000) | 3.00% | 1.00% | 1.65% | -0.36% | 2.31% | 0.31% | -4.26% | -6.26% |
| XTB | 3.19% | 0% | 1.94% | 0.07% | 2.51% | 0% | -4.17% | 6.19% |
| CMC Markets | 3.07% | -0.95% | 1.93% | 0.40% | 2.88% | 0.15% | -4.32% | 6.39% |
| eToro | 3.42% | -0.88% | 2.40% | 0.46% | 1.96% | 0.10% | -3.79% | 6.93% |
| Plus500 | Variable | Variable | Variable | Variable | Variable | Variable | Variable | Variable |
Brokers in Europe with the Lowest Margin Rates on Crypto Compared
| Broker | Bitcoin | Ethereum | Litecoin | |||
| Long | Short | Long | Short | Long | Short | |
| Plus500 | Variable | Variable | Variable | Variable | Variable | Variable |
| CMC Markets | 35.00% | -10.00% | 35.00% | -12.48% | 27.48% | -10.00% |
| XTB | 35.48% | 10.14% | 35.48% | 10.14% | 35.48% | 10.14% |
As we have compared the margin interest rates offered by various brokers and identified those with the lowest rates for 2024, let’s delve into a more detailed examination of their features.
Best Brokers with the Lowest Margin Rates in Europe for 2024 compared
| Broker | Products available | Minimum deposit | Countries available | Regulators |
| Interactive Brokers | Stocks, ETFs, Options, Futures, Forex, Commodities, Bonds and Funds | $0 | International (Few exceptions apply) | ASIC, IIROC, FINRA, SIPC, SEC, CFTC, FCA, CBI, AFSL, SFC, SEBI, MAS, MNB |
| XTB | Stocks, ETFs, CFDs on Indices, Commodities, Forex, and Cryptocurrencies | $0 | Europe and UK except Belgium | FCA, CySEC, KNF, CNVM, and IFSC |
| eToro | ETFs, Stocks and CFDs on Commodities, Forex, and Cryptocurrencies | $50 (depends on country) | Most European countries | ASIC, FCA, CySEC |
| CMC Markets | CFDs on Forex, indices, stocks, ETFs, commodities, bonds and Cryptocurrencies | $0 | Most European countries | ASIC, FCA, BaFin, IIROC, FMA, MAS, DFSA |
| Plus500 | CFDs on Forex, shares, indices, commodities, cryptocurrencies and, on Plus500 Invest, Real Shares | $100 | Most European countries | ASIC, CySEC, FMA, MAS, SFSA, FSCA, FCA |
| DEGIRO | Stocks, ETFs, mutual funds, bonds, warrants, futures, options | €/£0 | Most EU countries and UK | AFM, DNB |
Brokers with lowest margin rates in Europe reviewed
#1 Interactive Brokers
Interactive Brokers at a glance
Founded in 1978, Interactive Brokers is one of the largest international brokers listed on the NASDAQ exchange (Ticker: IBKR) and regulated by many international top-tier regulators. They are at the top of our list of brokers charging the lowest margin rates.
At Interactive Brokers, several account base currencies are available without a minimum required amount. However, funding these accounts can only be done through a bank transfer. When it comes to trading on margin, they implement a tiered pricing structure and offer some of the lowest rates in the market. Here are examples of their interest charges for investing in USD:
- Less than $100,000: 6.580% (BM* + 1.5%)
- Between $100,000 and $1M: 6.080% (BM* + 1%)
- Between $1M and $50M: 5.830% (BM* + 0.75%)
- Between $50M and $200M: 5.580% (BM* + 0.5%)
- Greater than $200M: 5.580% (BM* + 0.5%)
*BM being the benchmark rate
Additionally, if you wish to trade on margin in EUR, the following rates apply:
- Less than €90,000: 4.597% (BM + 1.5%)
- Between €90,000 and €900,000: 4.097% (BM + 1%)
- Between €900,000 and €44M: 3.847% (BM + 0.75%)
- Between €44M and €180M: 3.597% (BM + 0.5%)
- Greater than €180M: 3.597% (BM + 0.5%)
Please note that the interest rates mentioned are subject to change based on the reference rate.
In addition to low spreads and margin rates, Interactive Brokers does not charge an inactivity fee, and you are entitled to one free withdrawal per month. Finally, their trading platform, TWS (desktop version), is one of the best trading platforms with advanced features and a high degree of customisation. Moreover, they offer a web interface, IBKR GlobalTrader, and a mobile app that are also well-designed.
We recommend you check out our comprehensive Interactive Brokers review.
#2 XTB
XTB at a glance
XTB is a global CFD broker established in 2002 with more than 500,000 clients, and widely known for having an outstanding customer service team. It is headquartered in Poland and listed on the Warsaw stock exchange. It is regulated by several European authorities, including the Financial Conduct Authority (FCA), the Cyprus Securities and Exchange Commission (CySEC), the Polish Financial Supervision Authority (KNF), and the National Securities Market Commission (CNMV) of Spain.
Their CFD offerings include Forex, indices, commodities, shares, ETFs, and cryptocurrencies, and they offer competitive pricing and low spreads. They provide transparent pricing regarding trading on margin, and their overnight fees are updated regularly on all the available products.
XTB offers beginners and experienced traders a dynamic trading experience with its two trading platforms, xStation5 (desktop-based) and xStation (mobile), which have advanced charting tools and indicators. You can fund your account via bank wire transfer, credit or debit card, or Skrill, and there is no minimum amount to open an account.
On the downside, XTB charges a $30 fee for withdrawals of less than $50. Still, they do not impose a fee on withdrawals over that amount. Additionally, they charge a $10 monthly fee after 12 months of inactivity.
Read our XTB review for further insights.
#3 eToro
eToro at a glance
eToro has been well-known for its social trading platform since 2007, where you may copy the trades of other successful investors and discuss current market news with a reasonably large investor community of over 30 million users.
When trading CFD instruments, the costs and charges are typically incorporated into the spread, which can vary based on the asset class and trading hours. If you engage in margin trading, the fees will be transparent and displayed to you prior to executing any order, giving you an advantage compared to other brokers. This allows you to be aware of your trade’s estimated daily overnight cost before placing it.
eToro’s web platform is user-friendly for beginners and has an intuitive layout with many features that enhance your trading experience, such as one-click trading, limit orders, and advanced charting tools.
Although eToro is one of the best brokers for beginners, it might not be the best choice for day traders or professional traders. This is because some of its products have wider spreads compared to other brokers. Additionally, USD is the only account currency available, and withdrawal fees are a bit high if you plan to withdraw funds frequently ($5 per withdrawal).
Read our in-depth eToro review for a complete evaluation.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
#4 CMC Markets
CMC Markets at a glance
CMC Markets (CMC) is a global CFD broker that was established in 1989 and is listed on the London stock exchange. It currently serves more than 300,000 clients globally, gives access to over 12,000 CFDs, and offers one of the largest CFDs on Forex that includes 330+ currency pairs. It is regulated by many international top-tier regulators, including the FCA.
At CMC Markets, the commission charged for CFD trading depends on the asset class. For example, there is no commission for Forex trading, but a spread and holding cost applies. On the other hand, CFD share trading is subject to a commission that is calculated based on the executed order. In addition, holding costs may apply to open CFD trading positions at the end of each trading day (5 pm New York time). These holding costs can be positive or negative, depending on whether the position is long or short. Their pricing is transparent and is displayed on their website and updated regularly.
CMC Markets has its own web platform and mobile app available in many languages, which are highly customisable to fit your needs. Alternatively, you can use the well-known MetaTrader 4 (MT4) as well.
It is an ideal broker if you want to reduce your fees, as it provides tight spreads and free deposits and withdrawals. Additionally, CMC Markets supports up to 10 account currencies. However, if your account has had no trading activity for 12 months, you will be charged a monthly inactivity fee of £10 or equivalent. Lastly, you should note that monthly subscription charges may apply depending on the market data and the type of account held. Yet, these fees might be refunded according to the number of trades executed.
#5 Plus500
Plus500 at a glance
Established in 2008, Plus500 is another broker included in our list of brokers with the lowest margin rates. It has developed its own user-friendly web trading platform and a mobile app that provides access to over 2,800 CFDs. It’s a great choice for those wanting to keep their costs low, as it offers tight spreads, free deposits, and withdrawals. Its services are mostly compensated through the “market spread,” meaning you won’t have to pay any commissions for your trades (overnight fees still apply).
Plus500 provides transparent information about the overnight charge associated with each instrument directly on their website. This allows you to quickly access and review the estimated cost before engaging in margin trading and estimate the potential charges involved when trading on margin with Plus500.
Plus500 offers a wide range of indicators and drawing tools that assist you in analysing trends and market movements. You can open an account online and fund it by bank transfer, credit or debit cards, PayPal, or Skrill; the minimum deposit is $100.
On the downside, Plus500 provides very few educational materials and research reports compared to other brokers. Additionally, if you don’t access your account for three consecutive months, a $10 (or equivalent, depending on your currency) monthly fee will be charged. This is a shorter timeframe than some other brokers, who typically impose this fee after one year of inactivity.
You can read our Plus500 review for further details.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
#6 DEGIRO
DEGIRO at a glance
DEGIRO was founded in 2008 and is a leading online brokerage platform in Europe. They offer a wide range of investment options, including stocks, bonds, ETFs, mutual funds, and more. DEGIRO operates in multiple countries, providing its services to retail investors across Europe. Their goal is to make investing accessible to a wide range of individuals, so they developed a user-friendly platform and offer competitive pricing.
DEGIRO charges an annual interest rate of 5.90% on borrowed funds, which is calculated annually and charged monthly. DEGIRO’s trading platform offers an exceptional experience for investors of all levels. The platform provides access to real-time quotes, extensive order capabilities, and a comprehensive economic calendar to keep track of market-moving events.
DEGIRO stands out for its attractive fee structure, with no charges for account opening, inactivity, or withdrawals. However, it’s important to note that they do apply a 0.25% currency conversion fee, which should be considered for investing in international assets. Additionally, DEGIRO’s research offerings are limited and do not provide access to Forex, CFDs, or Cryptocurrencies. Despite these limitations, DEGIRO’s competitive pricing and user-friendly platform make it a popular choice for investors looking for a cost-effective and straightforward trading experience.
You can check our DEGIRO review for further analysis.
Conclusion
In conclusion, as you navigate the dynamic world of investing, it is crucial to prioritise margin rates as a key factor in selecting the right broker. Lower borrowing costs can significantly impact your profitability and enable you to achieve better trading outcomes. In this article, we presented the brokers that charge the lowest margin rates; here is a small recap:
Brokers with the Lowest Margin Rates in Europe for 2024
| #1 | Interactive Brokers | Best Overall |
| #2 | XTB | Best for Forex |
| #3 | eToro | Best for simple pricing structure |
| #4 | CMC Markets | Best for CFD trading |
| #5 | Plus500 | Ideal for demo account |
| #6 | DEGIRO | Best for European investors looking for stock trading |
As you explore European brokers with the lowest margin rates in 2024, it’s important to remember that there are other crucial factors to consider when selecting the right broker for your trading needs. While low margin rates can be advantageous, evaluating additional aspects such as platform features, customer support, and regulatory compliance is essential to ensure a successful trading experience.
To simplify your decision-making process, take advantage of our “Help Me Choose” tool, which provides customised suggestions based on your preferences and requirements. Additionally, our comprehensive comparison table offers a detailed breakdown of key features from various global brokers, allowing you to compare them side by side and make an informed choice. For a deeper understanding of each broker’s products and services, we recommend reading our unbiased reviews. These reviews provide valuable insights and information to help you gain a comprehensive overview of each broker’s offerings.
Other FAQs
What are Margin Rates? Why Choose a Broker with Low Margin Rates?
In simple terms, when engaging in margin trading, you borrow money from your broker to increase your buying power and potentially magnify returns. These rates represent the interest percentage that you must pay on the borrowed funds.
On the other hand, overnight funding, often referred to as swap rates or overnight interest rates, is the cost or benefit incurred when holding positions overnight in specific financial instruments. It serves as a fee or payment that compensates for the interest rate differential between the two currencies involved in Forex trades, or the borrowing and lending rates in other trade types. Typically, overnight funding is charged or credited to traders who maintain margin positions beyond a designated cut-off time, usually at the end of the trading day.
While both margin rates and overnight funding involve interest charges or payments in trading, they differ significantly between brokers and asset classes.
Choosing a broker with low margin rates or overnight funding fees is crucial for the success of your trading experience. Higher margin rates lead to elevated interest expenses, diminishing the potential gains you can achieve. Conversely, lower margin rates decrease the interest burden, allowing you to retain a larger portion of your profits. As such, choosing a broker offering low-margin rates helps you effectively reduce your trading costs, enhance overall profitability, and maximise investment returns.
It is essential to keep in mind that trading on margin entails a high level of risk. While it has the potential to amplify profits, it also exposes traders to increased losses. You should fully understand the risks involved and carefully evaluate your risk tolerance before engaging in margin trading.
What are interest margin rates in trading?
Interest margin rates in trading refer to the cost of borrowing funds from a broker to leverage your trades. These rates determine the amount you’ll pay in interest on the borrowed money.
How do margin rates affect my trading costs?
Margin rates have a direct impact on your trading costs. Lower margin rates can help reduce your borrowing expenses and potentially increase your overall profitability when trading on margin.
Which brokers offer the lowest interest margin rates in Europe for 2024?
Some brokers in Europe offering the lowest interest margin rates in 2024 include Interactive Brokers, XTB, eToro, and others. These brokers are known for their competitive rates and cost-effective trading solutions. You can read this article for further insights.
How often do brokers update their margin rates?
Brokers typically update their margin rates periodically, but the frequency of updates can vary. It’s recommended to check with your broker or refer to their website for the most up-to-date margin rate information.
Toni is a Fintech Analyst with over 8 years of experience in the financial industry where he worked as a financial control analyst at a regional bank and later conducted independent investment research analysis.
