Margin loans use fully-owned securities held in your WFNInvest account as collateral. Margin loans typically have a lower interest rate than conventional bank loans or credit cards and there are no set-up costs or annual fees. According to Federal Reserve Board regulations, qualified customers can borrow up to 50% of the value of eligible securities held in their account(s) and must maintain a predetermined equity level. You cannot utilize assets held in an IRA or custodial account to qualify for a margin loan.

Margin borrowing is not suitable for everyone. Using margin to buy additional securities can offer greater potential returns, but also incurs additional risks. If a price drop in a margined security causes your account’s equity to fall below its maintenance requirement, you will receive a margin call. To fulfill a margin call you must raise your account’s equity to the minimum acceptable level by either selling securities, depositing cash, or depositing securities that are already fully paid for.

The interest charged for a margin loan is determined by the dollar amount borrowed on your account and is based upon the variable Brokers Call Rate. The Brokers Call Rate changes according to interest rate fluctuations, and can be found in most major newspapers. Margin rates vary from a minimum of 75% to a maximum of 2% above the broker call money rate, depending upon the amount of your total debit balance.

MARGIN RATES

If your average debit balance is: Your interest rate will be: Under $5,000 2% above the average call money rate $5,000 - $9,999.99 1.75% above the average call money rate $10,000 - $14,999.99 1.5% above the average call money rate $15,000 - $19,999.99 1.25% above the average call money rate $20,000 - $24,999.99 1.0% above the average call money rate $25,000+ 0.75% above the average call money rate

*At WFNInvest, we negotiate interest rates for accounts with large debit balances as well as active accounts.