Examples
For questions about interest rate issues, please use the Inquiry Ticket or Chat system located in the Support menu of Account Management.
For all below examples assume benchmark rates as follows:
| Benchmark (BM) |
Rate |
| US Dollar Fed Funds Effective |
1.00% |
| EONIA (Euro Overnight Index Average) |
2.080% |
| GBP LIBOR (Overnight Rate) |
4.439% |
Example 1 - Interest Paid To You on Short Sale Proceeds
When you sell stock short and receive cash proceeds, we'll pay you daily interest on those proceeds as follows:
Statement Reflects
| USD |
Securities |
Commodities |
UKL |
Total |
| Short Sales Collateral |
1,500,000 |
0 |
0 |
1,500,000 |
| Excess Cash |
150,000 |
0 |
100,000 |
250,000 |
| Ending Settled Cash |
1,650,000 |
0 |
100,000 |
1,750,000 |
Calculate interest on short stock collateral value 1,500,000
| Tier Balance |
Cash |
Interest |
Calculation |
| < 100,000 |
100,000 |
0.00 |
No payment on balances < 100,000 |
| 100,000 - 1,000,000 |
900,000 |
0.00 1 |
[900,000 x (1.00%-1.25%)/360] |
| 1,000,000 - 3,000,000 |
500,000 |
6.94 |
[500,000 x (1.00%-0.50%)/360] |
| Short credit interest received |
6.94 |
|
Calculate interest on combined Integrated Investment account excess cash balance 250,000
| Tier Balance |
Cash |
Interest |
Calculation |
| < 10,000 |
10,000 |
0.00 |
(10,000 x 0/360) |
| 10,000 - 100,000 |
90,000 |
1.25 |
[90,000 x (1.00%-0.50%)/360] |
| > 100,000 |
150,000 |
3.13 |
[150,000 x (1.00%-0.25%)/360] |
| Credit interest received (securities) |
2.63 |
(4.38 x 150,000/250,000) |
| Credit interest received (UKL) |
1.75 |
(4.38 x 100,000/250,000) |
Example 2 - Interest Paid to You on Short Sale Cash Proceeds and Excess Cash in All Account Segments
Statement Reflects
| EUR |
Securities |
Commodities |
UKL |
Total |
| Short Sales Collateral |
70,000 |
0 |
0 |
70,000 |
| Excess Cash |
5,000 |
25,000 |
15,000 |
45,000 |
| Ending Settled Cash |
75,000 |
25,000 |
15,000 |
115,000 |
| Commodity Maintenance Margin |
|
0 |
|
|
| Commodity Option Value |
|
0 |
|
|
Calculate interest on short stock collateral value 70,000
| Tier Balance |
Cash |
Interest |
Calculation |
| < 80,000 |
70,000 |
0.00 |
(70,000 x 0/360) |
| > 80,000 |
0.00 |
0.00 |
|
| Short credit interest received |
0.00 |
|
Calculate interest on combined Integrated Investment account balance 45,000
| Tier Balance |
Cash |
Interest |
Calculation |
| < 7,500 |
7,500 |
0.00 |
(7,500 x 0/360) |
| > 7,500 |
37,500 |
1.65 |
[37,500 x (2.08%-0.50%)/360] |
| Credit interest received (securities) |
1.10 |
(1.10 x 30,000/45,000) |
| Credit interest received (UKL) |
0.55 |
(1.10 x 30,000/45,000) |
Example 3 - Interest Paid to You on Short Sale Cash Proceeds and Interest Charged to You on a Debit Integrated Investment Account Balance
In this example, you have securities short sale cash proceeds, and an Excess Cash (credit) balance in your Commodities account and UKL account, but you also have a negative (debit) balance from borrowed cash. We'll charge you daily interest on the debit balance and pay you daily interest on the credit balance as follows:
Statement Reflects
| USD |
Securities |
Commodities |
UKL |
Total |
| Short Sales Collateral |
680,000 |
0 |
0 |
680,000 |
| Borrowed Cash |
(180,000) |
0 |
0 |
(180,000) |
| Excess Cash |
0 |
120,000 |
30,000 |
150,000 |
| Ending Settled Cash |
500,000 |
120,000 |
30,000 |
650,000 |
| Commodity Maintenance Margin |
|
0 |
|
|
| Commodity Option Value |
|
0 |
|
|
Calculate interest on short stock value 680,000
| Tier Balance |
Cash |
Interest |
Calculation |
| < 100,000 |
100,000 |
0.00 |
(100,000 x 0/360) |
| 100,000 -1,000,000 |
580,000 |
0.00 1 |
[580,000 x (1.00%-1.25%)/360] |
| 1M -3M |
0.00 |
0.00 |
|
| > 3M |
0.00 |
0.00 |
|
| Short credit interest received |
0.00 |
|
Calculate interest on combined Integrated Investment account balance -30,000
| Tier Balance |
Cash |
Interest |
Calculation |
| < 100,000 |
30,000 |
2.08 |
[30,000 x (1.00% + 1.50%)/360] |
| 100,000 - 1,000,000 |
0.00 |
0.00 |
|
| 1M – 3M |
0.00 |
0.00 |
|
| > 3M |
0.00 |
0.00 |
|
| Debit interest charged |
2.08 |
|
| Credit Interest paid (UKL) |
0.00 |
No credit interest will be paid |
- With the exception of CHF, CZK, DKK, EUR, JPY and SEK, if the benchmark rate plus the interest rate paid is less than 0 then the interest paid will be 0%. For balances held in CHF, CZK, DKK, EUR, JPY or SEK IB will apply an effective negative rate.
