Margin Interest Calculator (interest on a margin loan by day, period & year)

Understanding the margin interest calculator — concept and principle

Brokers charge interest on money you borrow to buy securities on margin. This calculator shows the interest for a period, per day and per year, the effective annual rate and the return your investments must earn just to cover the interest.

50,000 × 7% ÷ 365 ≈ $9.59 a day, so 30 days cost $287.67, or 0.29% of a $100,000 position.

How it is calculated

Daily interest = loan balance × annual rate ÷ day-count basis (360 or 365).
Interest for the period = daily interest × days.
Interest per year = daily interest × 365; effective annual rate = that ÷ loan.
Break-even return = interest ÷ total value of the securities held (for the period and per year).

The principle

Margin interest accrues daily on the outstanding loan. Brokers quote an annual rate but divide it by a day-count basis; with a 360-day basis, a full calendar year of 365 days costs a little more than the stated rate (7% becomes about 7.10%). Because you pay interest on borrowed money but earn returns on the whole position, the position only makes a profit once its return exceeds the interest. The US SEC uses the example of 50,000 USD borrowed at 7%, about 3,500 USD a year or 9.59 USD a day.

Worked example

Default inputs: loan 50,000 USD, 7% a year, 30 days, Actual/365, securities worth 100,000 USD.

Daily interest = 50,000 × 0.07 ÷ 365 ≈ 9.59 USD.
Interest for 30 days = 9.589 × 30 ≈ 287.67 USD.
Interest per year = 9.589 × 365 = 3,500.00 USD; effective rate = 7%.
Return needed for the period = 287.67 ÷ 100,000 ≈ 0.29%.
Return needed per year = 3,500 ÷ 100,000 = 3.5%.

Each point is the calculator re-run with only “Margin loan balance” changed; the gold point is the default example. Change the inputs above and this chart follows your numbers.

Margin loan balance	Interest for the period
12,500	$71.92
25,000	$143.84
37,500	$215.75
50,000	$287.67
62,500	$359.59
75,000	$431.51
100,000	$575.34

How to read the result

The break-even return is the minimum your whole portfolio must earn; anything below it means borrowing lost money. Rates are usually tiered by balance, so larger loans may get lower rates. Interest unpaid at month end is typically added to the loan, so the balance and the cost grow.

Common mistakes

Forgetting that interest compounds when it is added to the loan monthly.
Ignoring the 360-day basis, which makes the cost slightly higher.
Looking only at interest and not at the risk of a margin call if prices fall.
Comparing the break-even return with expected returns that are not guaranteed.

Keep in mind: Margin trading can lose more than you invest, and falling prices can trigger forced sales. This estimate is not financial advice.

Frequently asked questions

How is margin interest charged?

It accrues daily on the borrowed balance and is usually posted to the account monthly.

Is margin interest tax-deductible?

In the US, investment interest may be deductible in some cases under IRS rules; check with a tax professional.

What is a margin call?

A demand to add cash or securities when your equity falls below the maintenance requirement.

Sources: US SEC Investor.gov, Investor Bulletin: Understanding Margin Accounts · FINRA Rule 4210 (margin requirements)

Checked 9 Nov 2026. U.S. SEC Office of Investor Education and Advocacy, Investor.gov Investor Bulletin “Interested in Margin? Understand Interest” (7 April 2022): interest calculated as set out in the margin agreement; example 50,000 at 7% = 3,500 a year (about 9.59 a day); interest raises the return needed to break even.

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