If you trade on margin, the rate your broker charges is one of your biggest running costs. On a $50,000 loan, borrowing at 4.24% instead of 12.45% is a difference of over $4,000 a year, straight out of your returns.
Margin rates in the US move with the Federal Reserve. Almost every broker prices its loans as a base rate plus a spread, so when the Fed cuts or raises rates, your margin rate follows.
In this article, we compare the US brokers with the lowest margin rates, explain how each one prices its loans and show how rates fall as the amount you borrow rises. All figures were checked against each broker’s own pricing page in September 2026.
How margin rates are set
Most US brokers use the same structure:
- A base rate: set by the broker and linked to the Federal Funds rate, the broker call rate or the prime rate.
- Plus or minus a spread: the broker’s margin, which shrinks as your loan grows. On the largest balances, several brokers charge below their own base rate.
Two consequences are worth remembering. First, published rates go stale quickly, so check the broker’s page before borrowing. Second, brokers with a low spread stay cheap in any rate environment, while brokers with a high spread stay expensive.
It also matters how the tiers are applied. Interactive Brokers blends them, charging each slice of your loan at its own tier rate. Most other brokers apply a single rate to your whole balance based on the tier you land in.
US brokers with the lowest margin rates in 2026
The table below ranks brokers by the rate charged on smaller balances, which is what most retail investors pay:
| Broker | Rate on the smallest balances | Rate on the largest balances | Base rate |
| M1 | 4.24% (promotional) or 5.90% standard | Same rate at all balances | Own rate |
| Interactive Brokers Pro | 5.12% | Benchmark + 0.50% | IBKR benchmark (Fed Funds) |
| Webull Premium | 5.20% | 3.90% above $25M | Own rate |
| Interactive Brokers Lite | 6.12% | 6.12% (flat) | IBKR benchmark (Fed Funds) |
| Moomoo | 6.80% | 6.80% (flat) | Own rate |
| Webull Standard | 8.74% | 8.74% (flat) | Own rate |
| Morgan Stanley | 10.70% | 6.325% above $50M | 9.95% |
| Tastytrade | 11.00% | 8.00% above $1M | 10.00% |
| Charles Schwab | 11.825% | 10.075% from $250K | 10.00% |
| Fidelity | 12.075% | 10.325% from $250K | 10.825% |
| Vanguard | 12.25% | 10.25% from $250K | 9.75% |
| E*TRADE | 12.45% | 10.45% from $250K | 9.95% |
Rates checked on each broker’s own pricing page in September 2026. Base rates and margin rates can change at any time, usually without notice.
Brokers reviewed
M1
M1 combines automated investing with a margin loan facility. It charges a single rate regardless of how much you borrow, which makes it the cheapest option on this list for small balances: 4.24% on its promotional rate and 5.90% on the standard rate (September 2026).
Because there are no tiers, M1 is most attractive to investors borrowing smaller amounts, where the big brokers charge over 12%.
Interactive Brokers
Founded in 1978, listed on the NASDAQ and part of the S&P 500 index, Interactive Brokers is the cheapest large broker for margin.
Its rates are the IBKR benchmark rate (based on Fed Funds) plus a spread that shrinks as your loan grows. IBKR Pro starts at 5.12% with a spread of 1.50%, falling to 0.50% on the largest balances. IBKR Lite charges a flat 2.50% spread, which works out at 6.12% on any balance.
IBKR blends the tiers, so on a $1,000,000 loan the first $100,000 is charged at the first tier rate and each further slice at its own rate. Interest accrues daily and is charged on the third business day of the following month. A floor of 0.75% applies, and a 1% surcharge can apply to very large balances unless financing is arranged in advance.
Webull
Webull splits margin pricing between its Premium and Standard plans, and the difference is large.
Webull margin rates (September 2026)
| Margin balance | Webull Premium | Webull Standard |
| $0 to $25K | 5.20% | 8.74% |
| $25K to $100K | 5.00% | 8.74% |
| $100K to $500K | 4.45% | 8.74% |
| $500K to $1M | 4.40% | 8.74% |
| $1M to $10M | 4.20% | 8.74% |
| $10M to $25M | 4.15% | 8.74% |
| Above $25M | 3.90% | 8.74% |
On the Premium plan, Webull has the lowest rates on this list for larger balances, down to 3.90%. On the Standard plan, it charges a flat 8.74% regardless of how much you borrow.
Moomoo
Moomoo keeps it simple with a single rate of 6.80% for all balances. That is competitive for small loans, but brokers with tiered pricing become cheaper once you borrow more.
Morgan Stanley
Morgan Stanley prices from a base lending rate of 9.95% (since 15 December 2025), plus or minus a spread by balance.
Morgan Stanley margin rates (September 2026)
| Balance | Spread | Rate |
| $0 to $100K | +0.750% | 10.700% |
| $100K to $500K | +0.250% | 10.200% |
| $500K to $1M | -0.750% | 9.200% |
| $1M to $5M | -1.125% | 8.825% |
| $5M to $10M | -1.375% | 8.575% |
| $10M to $20M | -2.625% | 7.325% |
| $20M to $50M | -3.125% | 6.825% |
| Above $50M | -3.625% | 6.325% |
Tastytrade
Tastytrade prices from a base rate of 10.00%, with a spread from +1.00% on the smallest balances to -2.00% above $1M.
Tastytrade margin rates (September 2026)
| Balance | Spread | Rate |
| $0 to $25K | +1.00% | 11.00% |
| $25K to $50K | +0.50% | 10.50% |
| $50K to $100K | Base rate | 10.00% |
| $100K to $250K | -0.50% | 9.50% |
| $250K to $500K | -1.00% | 9.00% |
| $500K to $1M | -1.50% | 8.50% |
| Above $1M | -2.00% | 8.00% |
Charles Schwab
Schwab prices from its own base rate, 10.00% since December 2025, plus a spread by balance: 11.825% below $25K, 11.325% from $25K, 10.375% from $50K, 10.325% from $100K and 10.075% from $250K. Above $500K you have to call for a quote.
Fidelity
Fidelity’s base rate is 10.825% (effective 18 September 2026), with a spread that turns negative on larger balances.
Fidelity margin rates (September 2026)
| Balance | Spread | Rate |
| $0 to $25K | +1.250% | 12.075% |
| $25K to $50K | +0.750% | 11.575% |
| $50K to $100K | -0.200% | 10.625% |
| $100K to $250K | -0.250% | 10.575% |
| $250K to $500K | -0.500% | 10.325% |
| Above $500K | Special rates on request | |
Vanguard
Vanguard’s base rate is 9.75%, and the rate applies to your full loan balance rather than being blended: 12.25% up to $19,999, 11.75% from $20K, 11.25% from $50K, 10.75% from $100K and 10.25% from $250K. Above $500,000 you have to call for a quote.
E*TRADE
E*TRADE, which belongs to Morgan Stanley, prices from a base rate of 9.95% (since 15 December 2025): 12.45% below $10K, 12.20% from $10K, 11.95% from $25K, 11.45% from $50K, 10.95% from $100K and 10.45% from $250K.
Other brokers
SoFi, Zacks Trade, TradeZero, Tradier, Lightspeed, Ally Invest, TradeStation, Firstrade and WellsTrade also offer margin, generally with tiered pricing over a base rate. [A CONFIRMAR: rates for these brokers were not verified in this update]
Conclusion
The gap between the cheapest and the most expensive broker on this list is more than 8 percentage points on the same loan, and almost all of it comes from the spread each broker adds to its base rate.
For small balances, M1 is the cheapest at 4.24% on its promotional rate, followed by Interactive Brokers Pro at 5.12% and Webull Premium at 5.20%. For large balances, Webull Premium goes down to 3.90% and Morgan Stanley to 6.325%, although the latter requires millions in borrowings to get there.
The large traditional brokers are the most expensive for ordinary investors: Schwab at 11.825%, Fidelity at 12.075%, Vanguard at 12.25% and E*TRADE at 12.45% on the smallest balances. On a $20,000 loan, that is roughly $1,600 a year more than M1 charges.
Before borrowing, check the current rate on the broker’s own page, since these numbers change with every Fed decision. And remember that margin amplifies losses as well as gains: if your positions fall, you can face a margin call and have positions closed automatically.
If you are a European investor, we have similar research on brokers with the lowest margin rates in Europe.
Risk disclaimer: Trading on margin involves a high level of risk and can result in losses greater than your initial deposit. Make sure you understand how margin works before borrowing.
FAQs
What are margin rates?
When you trade on margin, you borrow money from your broker to buy more securities than your cash allows. The margin rate is the annual interest you pay on that loan, normally accrued daily and charged monthly.
Margin rates differ from overnight funding (or swap rates), which is the cost of holding leveraged CFD or forex positions overnight. Both are financing costs, but they are calculated differently.
Why do margin rates differ so much between brokers?
Almost all US brokers price margin as a base rate plus a spread. The base rates are similar, so the difference comes from the spread. Interactive Brokers charges 1.50% over its benchmark on IBKR Pro, while Fidelity charges 1.25% over a base rate that is itself almost 11%, and Vanguard charges 2.50% over 9.75% on small balances.
Do lower rates apply to my whole balance?
It depends on the broker. Interactive Brokers blends the tiers, charging each slice of your loan at its own rate. Vanguard, Schwab, Fidelity and most others apply a single rate to your full balance, based on the tier you fall into. On a loan near a tier boundary, this makes a real difference.
How often do margin rates change?
They change whenever the base rate moves, which in the US usually follows Federal Reserve decisions. Brokers can also change their spreads at any time, normally without notice, so check the current rate on your broker’s website before borrowing.
