Broker Margin Rates Compared: Who Has the Lowest in 2025?
The difference between 4.9% and 12% margin interest is real money. We broke down exactly what you'll pay at each broker—and how to get the best rates.
The Math That Matters
On a $50,000 margin balance, the difference between the lowest and highest rates is over $3,500 per year:
Current Margin Rates: Full Comparison
Margin rates in January 2025 are tied to the Federal Funds Rate (currently 4.25%-4.50%). But what brokers charge above that "base" rate varies wildly. Here's every major broker ranked from lowest to highest:
| Rank | Broker | Base Rate | Best Rate | Notes |
|---|---|---|---|---|
| 🥇 1 | Public.com | 4.90% | 3.95% ($50M+) | Lowest in industry |
| 🥈 2 | Robinhood Gold | 5.75% | 5.25% ($100K+) | First $1K free; $5/mo Gold |
| 🥈 2 | Webull Premium | 5.75% | 5.75% (flat) | $40/year subscription |
| 4 | Interactive Brokers Pro | 5.83% | ~4.14% (large) | Tiered pricing, best for $1M+ |
| 5 | Moomoo | 6.80% | 6.80% (flat) | No tiering |
| 6 | Interactive Brokers Lite | 6.83% | 6.83% | Higher than Pro |
| 7 | Webull Standard | 8.74% | 8.74% | No subscription |
| 8 | Charles Schwab | 10.00% | 7.50% ($1M+) | Tiered by balance |
| 9 | E*TRADE | 10.45% | ~9% (high balance) | Tiered by balance |
| 10 | Tastytrade | 10.50% | 10.50% | No tiering |
| 11 | Fidelity | 10.575% | 7.50% ($1M+) | Tiered by balance |
| 12 | Merrill Edge | ~11.13% | Varies | Preferred Rewards tiers |
| 13 | Ally Invest | ~11.75% | Varies | Tiered |
| 14 | Firstrade | ~12.00% | ~12.00% | Highest tier |
Why the Massive Spread?
How can Public charge 4.9% while Firstrade charges 12%? It comes down to business model:
Low-Cost Brokers: Volume Over Margin
Public and Robinhood don't rely on margin interest as a primary revenue source. Public makes money from order routing (though they don't use traditional PFOF), premium features, and their Alpha subscription. Robinhood profits from payment for order flow, premium subscriptions, and net interest on customer cash.
Interactive Brokers runs a similar playbook—they make money on volume and can afford to offer near-wholesale rates because they're executing millions of trades daily.
Traditional Brokers: Margin as Profit Center
Fidelity, Schwab, and E*TRADE have different economics. They've historically charged more for margin because they can—their customers tend to be less price-sensitive, and margin lending is a significant profit center. Schwab's margin balances alone exceed $90 billion.
Real-World Cost Comparison
Let's make this concrete. Here's what you'd pay annually at different margin balances:
Annual Margin Cost by Balance
| Balance | Public (4.9%) | Robinhood (5.75%) | IBKR (5.83%) | Fidelity (10.575%) |
|---|---|---|---|---|
| $10,000 | $490 | $575* | $583 | $1,058 |
| $25,000 | $1,225 | $1,380* | $1,458 | $2,644 |
| $50,000 | $2,450 | $2,818* | $2,915 | $5,288 |
| $100,000 | $4,900 | $5,193* | $5,830 | $10,575 |
*Robinhood Gold gives first $1,000 of margin free, reducing effective cost.
Who Should Care About Margin Rates?
You SHOULD prioritize low margin if:
- You regularly use margin for trading or investing
- You use margin loans for non-investment purposes (securities-backed lines of credit)
- You trade options spreads that tie up margin
- You're an active trader who carries overnight positions
You can ignore margin rates if:
- You only invest in cash accounts
- You have a margin account but never actually borrow
- Your margin usage is minimal and occasional
- You prioritize other features (research, platform, customer service)
Getting the Best Rate: Strategies
Strategy 1: Use a Low-Cost Broker
The simplest approach: open an account at Public, Robinhood Gold, or Webull Premium. Their base rates beat most competitors' best rates.
Strategy 2: Consolidate Assets
If you prefer a traditional broker, consolidating assets can drop you into lower rate tiers. Fidelity's rate falls from 10.575% to 7.5% at $1M in assets.
Strategy 3: Negotiate
With significant assets ($500K+), many brokers will negotiate margin rates. Call and ask. The worst they can say is no.
Strategy 4: Use Interactive Brokers for Margin, Keep Research Elsewhere
Some investors maintain multiple accounts—one at a broker like Fidelity for research and retirement accounts, another at IBKR specifically for margin-heavy trading.
The Hidden Catch: Robinhood's Free First $1,000
Robinhood Gold's "first $1,000 of margin free" sounds great, but do the math. Gold costs $5/month ($60/year). If you only use $1,000 of margin, you're effectively paying 6% on that first $1K—worse than their stated 5.75% rate.
The deal only makes sense if you're using significantly more than $1,000 in margin OR taking advantage of Gold's other benefits (3% IRA match, 3.25% APY on cash, larger instant deposits).
What About Margin for Non-Trading Uses?
Some investors use margin loans as an alternative to traditional loans—borrowing against their portfolio for home down payments, business expenses, or other needs. At 4.9% from Public, this can beat HELOCs and personal loans.
However, margin loans carry unique risks: if your portfolio drops significantly, you face a margin call and may be forced to sell at the worst time. Use this strategy carefully.
Bottom Line: Our Recommendations
Compare All Broker Features
Margin rates are just one factor. See how these brokers stack up across everything that matters.
Full Broker Comparison