Brokers With Lowest Margin Rates
Brokers with lowest margin rates are highly sought after by traders with a large risk appetite and designs to make serious money from their investment accounts. Such brokers are also popular amongst cost-conscious retail investors, especially during periods of market volatility.
This guide delves into the world of low margin rate brokers, explaining the underlying concepts behind margin trading, and detailing the benefits for traders that open accounts with brokers offering the lowest margin rates.
Brokers With Lowest Margin Rates
These 6 brokers offer the lowest margin rates 2025:
Note, the rate listed below is the annualized mark-up/admin fee charged by brokers before the central bank underlying rate is applied. It is also worth bearing in mind that margin rates vary depending on the margin model used by brokers, the size of your account balance, and the product traded.
Here is a short summary of why we think each broker belongs in this top list:
- Interactive Brokers - Interactive Brokers (IBKR) is a premier brokerage, providing access to 150 markets in 33 countries, along with a suite of comprehensive investment services. With over 40 years of experience, this Nasdaq-listed firm adheres to stringent regulations by the SEC, FCA, CIRO, and SFC, amongst others, and is one of the most trusted brokers for trading around the globe.
- eToro USA - eToro is a social investing platform that offers short-term and long-term trading on stocks, ETFs, options and crypto. The broker is well-known for its user-friendly community-centred platform and competitive fees. With FINRA and SIPC oversight and millions of users across the world, eToro is still one of the most respected brands in the industry. eToro securities trading is offered by eToro USA Securities, Inc.
- xChief - xChief is a foreign exchange and CFD broker, established in 2014. The company is based offshore and registered with the VFSC and FMA. Users can choose between a wide selection of accounts and base currencies, making ForexChief accessible to global traders. The brand also stands out for its no deposit bonus and fee rebates for high-volume traders.
- OANDA US - OANDA is a popular brand offering exceptional execution, low deposit requirements and advanced charting and trading platform features. The top-rated brand has over 25 years of experience and is regulated by trusted agencies, including the NFA/CFTC. Around the clock support is available for short-term traders, alongside flexible contract sizes and automated trade executions.
- Zacks Trade - Zacks Trade is a FINRA-regulated US broker offering trading on stocks, ETFs, cryptocurrencies, bonds and more through a proprietary terminal. The broker is geared toward active traders and offers very affordable fees on most assets as well as an app and a vast amount of market data.
- Firstrade - Firstrade is a US-headquartered discount broker-dealer with authorization from the SEC. The company is also a member of FINRA/SIPC. With welcome bonuses, powerful tools and apps, plus commission-free trading, Firstrade Securities is a popular and top-tier online brokerage. It is also quick and easy to open a new account.
Interactive Brokers
"Interactive Brokers is one of the best brokers for advanced day traders, providing powerful charting platforms, real-time data, and customizable layouts, notably through the new IBKR Desktop application. Its superb pricing and advanced order options also make it highly attractive for day traders, while its diverse range of equities is still among the best in the industry."
Christian Harris, Reviewer
Interactive Brokers Quick Facts
| Demo Account | Yes |
|---|---|
| Instruments | Stocks, Options, Futures, Forex, Funds, Bonds, ETFs, Mutual Funds, CFDs, Cryptocurrencies |
| Regulator | FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMA, AFM |
| Platforms | Trader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, TradingView, eSignal, TradingCentral, ProRealTime, Quantower |
| Minimum Deposit | $0 |
| Minimum Trade | $100 |
| Leverage | 1:50 |
| Account Currencies | USD, EUR, GBP, CAD, AUD, INR, JPY, SEK, NOK, DKK, CHF, AED, HUF |
| Margin Rate | 1.55 - 2.59% |
Pros
- IBKR is one of the most respected and trusted brokerages and is regulated by top-tier authorities, so you can have confidence in the integrity and security of your trading account.
- While primarily geared towards experienced traders, IBKR has made moves to broaden its appeal in recent years, reducing its minimum deposit from $10,000 to $0.
- IBKR continues to deliver unmatched access to global stocks with tens of thousands of equities available from 100+ market centres in 24 countries, most recently the Saudi Stock Exchange.
Cons
- IBKR provides a wide range of research tools, but their distribution across trading platforms and the web-based 'Account Management' page lacks consistency, leading to a confusing user experience.
- TWS’s learning curve is steep, and beginners may find it challenging to navigate the platform and understand all the features. Plus500's web platform is much better suited to new traders.
- You can only have one active session per account, so you can’t have your desktop program and mobile app running simultaneously, making for a sometimes frustrating trading experience.
eToro USA
"eToro remains a top pick for traders looking for leading social investing and copy trading services. With a low deposit, zero commissions and an intuitive platform, the broker will meet the needs of newer day traders."
eToro USA Quick Facts
| Bonus Offer | Invest $100 and get $10 |
|---|---|
| Demo Account | Yes |
| Instruments | Stocks, Options, ETFs, Crypto |
| Regulator | SEC, FINRA |
| Platforms | eToro Trading Platform & CopyTrader |
| Minimum Deposit | $100 |
| Minimum Trade | $10 |
| Account Currencies | USD |
| Margin Rate | 8.33% |
Pros
- The broker's Academy offers comprehensive learning materials for beginners to advanced-level investors
- The low minimum deposit and straightforward account opening process means beginners can get started quickly
- A free demo account means new users and prospective day traders can try the broker risk-free
Cons
- The proprietary terminal doesn't support trading bots and there are no additional stock market analysis tools
- There's a narrower range of day trading instruments available compared to competitors, with only stocks, ETFs and cryptos
- Average fees may cut into the profit margins of day traders
xChief
"xChief continues to prove popular with investors looking to trade highly leveraged CFDs on the popular MetaTrader platforms. The broker's rebate scheme and investment accounts will particularly appeal to seasoned traders. However, the lack of top-tier regulatory oversight is a major drawback."
xChief Quick Facts
| Bonus Offer | $100 No Deposit Bonus |
|---|---|
| Demo Account | Yes |
| Instruments | CFDs, Forex, Metals, Commodities, Stocks, Indices |
| Regulator | ASIC |
| Platforms | MT4, MT5 |
| Minimum Deposit | $10 |
| Minimum Trade | 0.01 Lots |
| Leverage | 1:1000 |
| Account Currencies | USD, EUR, GBP, JPY, CHF |
| Margin Rate | 0.1% |
Pros
- The broker offers several account types to suit different traders, including a Cent account for beginners and pro-level hedging/netting accounts
- xChief delivers a high-quality day trading environment via the MT4 and MT5 platforms, with market-leading charts, indicators and tools
- Traders can access a copy trading solution via the MetaQuotes Signals service
Cons
- Fees and minimums are imposed on most withdrawal methods, including a €60 minimum for SWIFT bank transfers
- The broker trails competitors when it comes to research tools and educational resources
- The total range of 150+ assets is much lower than most competitors who typically offer hundreds
OANDA US
"OANDA remains an excellent broker for US day traders seeking a user-friendly platform with premium analysis tools and a straightforward joining process. OANDA is also heavily regulated with a very high trust score."
OANDA US Quick Facts
| Demo Account | Yes |
|---|---|
| Instruments | Forex, Crypto with Paxos (Cryptocurrencies are offered through Paxos. Paxos is a separate legal entity from OANDA) |
| Regulator | NFA, CFTC |
| Platforms | OANDA Trade, MT4, TradingView, AutoChartist |
| Minimum Deposit | $0 |
| Minimum Trade | 0.01 Lots |
| Leverage | 1:50 |
| Account Currencies | USD, EUR, GBP, CAD, AUD, JPY, CHF, HKD, SGD |
| Margin Rate | 2% |
Pros
- Day traders can enjoy fast and reliable order execution
- Seasoned day traders can access industry-leading tools, including an MT4 premium upgrade and advanced charting provided by MotiveWave
- There's a strong selection of 68 currency pairs for dedicated short-term forex traders
Cons
- There's only a small range of payment methods available, with no e-wallets supported
- The range of day trading markets is limited to forex and cryptos only
- It's a shame that customer support is not available on weekends
Zacks Trade
"Zacks Trade will suit active day traders with experience using powerful platforms. Fees and margin rates are low while the market research is excellent."
Tobias Robinson, Reviewer
Zacks Trade Quick Facts
| Demo Account | Yes |
|---|---|
| Instruments | Stocks, ETFs, Cryptos, Options, Bonds |
| Regulator | FINRA |
| Platforms | Own |
| Minimum Deposit | $2500 |
| Minimum Trade | $3 |
| Account Currencies | USD, EUR, GBP, CAD, AUD, NZD, INR, JPY, ZAR, TRY, SEK, NOK, DKK, CHF, HKD, SGD, RUB, PLN, CZK, HUF |
| Margin Rate | 3.56% |
Pros
- Demo account
- Customizable proprietary trading platform and mobile app
- Regulated by FINRA with access to the Securities Investor Protection Corporation
Cons
- High minimum requirement of $2,500
- No MT4 or MT5 platform integration
- Withdrawal fees apply if removing funds more than once per month
Firstrade
"Firstrade is perfect for beginners looking to trade US stocks with zero commissions. There is a wealth of free education plus premium-quality research, notably through its latest FirstradeGPT tool, plus trading ideas from Morningstar, Briefing.com, Zacks and Benzinga."
Firstrade Quick Facts
| Bonus Offer | Deposit Bonus Up To $4000 |
|---|---|
| Demo Account | No |
| Instruments | Stocks, ETFs, Options, Mutual Funds, Bonds, Cryptos, Fixed |
| Regulator | SEC, FINRA |
| Platforms | TradingCentral |
| Minimum Deposit | $0 |
| Minimum Trade | $1 |
| Account Currencies | USD |
| Margin Rate | 4.50% |
Pros
- Enhanced stock trading environment with overnight trading and fractional shares added
- Excellent broker for budget-conscious traders with low OTC fees
- One of the first brokers to add AI-powered analysis through FirstradeGPT
Cons
- Customer support still needs work following testing with no 24/7 assistance
- Firstrade focuses on stocks at the expense of forex, limiting diversification opportunities
- Visa credit/debit card deposits and withdrawals are not accepted
What Is A Margin Trading Account?
A margin account is a powerful tool for investors that allows trades or investments to be made that are worth more capital than what is being put down.
Margin refers to the fraction of the full trading amount that the investor provides to open a position; a margin rate is a form of commission charged on the trade, often provided as a percentage. This is why margin traders look for brokers with the lowest margin rates. Most brokers will require a minimum invested account balance to access margin.
In traditional markets, the borrowed funds used to open a position are usually provided by an investment broker. However, in cryptocurrency trading, funds may be fronted by other traders who earn interest based on market demand for margin funds. In other cases, the cryptocurrency exchange itself may provide margin account funds to its customers.
More information on margin trading can be found here.
Margin Rate
With trading on margin being much like taking out a bank loan, traders must also pay a fee, or interest, on the loan. These are referred to as margin rates, and they vary between brokers and accounts.
Margin rates are often a few percent and are charged on the leveraged capital, not the margin fronted by the trader. Brokers with lowest margin rates offer particularly competitive account conditions.
Much like loan interest, the best scenario for an investor is the lowest broker margin rate, as this minimises the cost of the overall trade.
Depending on the margin account rate that the broker offers, you may also have to pay periodic interest payments in the same way you would pay interest on a bank loan.
Most brokerages will also offer their best margin rates for those traders with higher levels of investment capital in their accounts.
It is important to fully understand the fee structure of a broker’s margin investing options to optimise the use of margin and maximise profits.
Margin Example
Now let’s look at an example that shows the benefits of brokers with lowest margin rates. If a trader were to invest $25,000 cash into an unleveraged account for a period that produces a 10% yield, they would walk away with a profit of $2,500 and a new total capital of $27,500.
However, if they were to invest $25,000 and also take on a margin debt of $25,000, the total investment capital would be $50,000. For the same account yield of 10% and the same timeframe, an initial return of $5,000 would be produced. However, the margin cost must be determined from the margin rate and deducted from this value. For example, if the margin rate is 5%, then $1,250 (5% of $25,000) must be paid back to the broker, resulting in a net profit of $3,750 and a new capital of $28,750.
Consider now the same investment but with a lower margin rate of 1%. In this case, the margin cost would be $250 (1% of $25,000) and the net return would equal $4,750. Clearly then, maximum profit exposure is created by the broker with the lowest margin rate, as they take the least from the trade’s returns. In the example above, the 1% margin rate afforded the trader an extra $1,000 profit.
Risks
While using margin trading accounts may seem a no-brainer, especially through online brokers with the lowest margin rates, it is deceptively dangerous. Consider again the above example, only this time the investment backfires and the portfolio yield is -10%. In an unleveraged scenario, the investor would lose $2,500 and walk away with $22,500. In the leveraged case with a 5% margin rate, the investor not only loses the $2,500 from their own investment and pays the same $1,250 margin cost, but they must also front the losses on the margin debt (another $2,500), totalling a net $6,250 loss.
Additionally, traders must be careful about using margin for small trades, as the returns from the investment need to be larger than the margin cost. If not, the margin cost would have to be paid by the trade profit and some of the investment capital, resulting in a net loss for the investor despite the trade being profitable at face value.
Pros Of Brokers With Lowest Margin Rates
The benefits of using brokerages with the lowest margin rates are:
- Less interest to accrue
- Amplification of return rates due to more affordable account borrowing
Cons Of Brokers With Lowest Margin Rates
Opting for brokers with lowest margin rates can also be disadvantageous:
- Interest costs apply until fully repaid
- Only beneficial if a trade is successful
- Rapid profit generation can be difficult
- Margin trading is a debt that must be repaid
- A larger account deposit is often required than for higher rates
Final Word
Margin trading is an opportunity for investors to magnify their gains, though it can add complexities and risks not otherwise required. Thorough research should be carried out into the brokers offering the lowest margin rates, which should be combined with other considerations before selecting a broker to open an account with. If margin trading is for you, brokers offering low rates will facilitate larger profits for the same risk exposure.
FAQs
What Does It Mean To Trade On Margin?
Trading on margin entails borrowing money from a broker to carry out trades. Traders deposit cash that serves as collateral for the loan, then pay ongoing interest on the borrowed money. This loan allows investors to buy a larger quantity of securities which automatically serve as collateral for the loan.
What Are The Benefits Of Brokers With Lowest Margin Rates?
Margin accounts becomes advantageous when your rate of return is higher than the interest on the loan. Brokers offering the lowest margin rates will eat into your profits less.
Which Broker Has The Best Margin Rates?
Most traditional brokers have margin rates of around 8%. Interactive Brokers and M1 Finance offer competitive margin rates of around two or three percent, depending on the base currency and investment capital size.
Which Forex Brokers Have The Cheapest Margin Rates?
Interactive Brokers has an entire platform dedicated to forex trading that supports 23 different currencies. Its margin rates range from 0.5% on large loans for premium account holders to 9% for lite members.
Can You Negotiate Margin Account Rates?
Margin rates are not always fixed at those published on the broker websites. Given a large amount of capital often involved, brokers can sometimes be negotiated with the get better margin rates. If you are with an existing broker and want a lower margin rate, it may be worth contacting them first.