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Questrade TFSA margin power interest rate

  • Last Updated:
  • Jun 1st, 2020 1:31 pm
[OP]
Newbie
Mar 12, 2015
80 posts
20 upvotes
North York, ON

Questrade TFSA margin power interest rate

Questrade has a feature where you can use TFSA as collateral for margin in your non-registered account called 'margin power'. Is this interest rate different from a regular margin? Below is what says on the website. If I use the margin power, does it mean the interest is prime+8.10%? I'm not sure if below is referring to the same thing.

Debit (Payable by customer for margin)

All CAD non-registered accounts CAD prime+3.50%
RRSP, TFSA and other registered accounts CAD prime+8.10%
All USD non-registered accounts USD prime+3.75%
RRSP, TFSA and other registered accounts USD prime+8.35%
2 replies
Jr. Member
Nov 27, 2019
166 posts
123 upvotes
I just noticed these features on Questrade! Does this mean that QT pays (4.5%) interest for holding un-invested cash on Margin account?
Any thoughts, experience?

Here is the quote:

"10.0 INTEREST ON MARGIN
Interest incurs on Clients' overnight debit or credit balance, and is charged or credited to equities and Options Accounts midmonth. The following rates apply on overnight balances. Please note that these rates are subject to change without notice. For more information, please contact a Questrade Client services specialist at 416.227.9876 or toll-free at 1.888.783.7866.

Credit (Payable to client on cash balance)
Under $250,000CAD prime -4.5% CAD prime -4.5% USD prime -5.25% USD prime -6%1
$250,000 +CAD prime -4% CAD prime -4.5% USD prime -4.75% USD prime -6%1

Note:
Clients will be charged interest if the accrued amount owing is $1.00 or more for the month.

Margin accounts will earn interest if the accrued amount owing is $10.00 or more for the month.

Registered accounts will earn interest if the accrued amount owing is $0.01 or more for the month.

Balances are calculated using the average daily debit/credit balance for the interest period.

The minimum rate for credit is 0.00%. Questrade will never charge interest for carrying a balance."
Jr. Member
Jun 17, 2018
118 posts
92 upvotes
Hamilton, Bermuda
florenntina wrote: Does this mean that QT pays (4.5%) interest for holding un-invested cash on Margin account?
Nope... They give you prime rate minus 4.5%. Current prime is 2.45%, so that would be -2.05%.
Fortunately they floor it a 0%, meaning they would not charge you for holding cash. This is what they mean in the last sentence: "Questrade will never charge interest for carrying a balance."

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