Overview

Wealthsimple doesn't charge commission on equity and ETF trades made in a margin account. However, if you have borrowed funds from Wealthsimple, you're charged interest on the amount borrowed (margin used).

Your interest rate depends on your client tier:

• Core: Wealthsimple Prime rate + 0.5%
• Premium: Wealthsimple Prime rate + 0%
• Generation: Wealthsimple Prime rate – 0.5%

Current Wealthsimple Prime rates:

• Wealthsimple CAD Prime rate: 4.95%
• Wealthsimple USD Prime rate: 7.50%

Interest accrual and payments

Interest accrual

The interest you pay is based on

• the interest rate,
• the amount borrowed (CAD/USD margin used), and
• the length of time you borrow the money.

Interest begins accruing daily at the end of the day the trade is initiated and continues for as long as the margin is used. You pay interest on both USD and CAD margin used balances and interest is posted to the account on the first business day of each month (for the previous month).

Interest accrual example

Let's say you use $10,000 CAD of margin to purchase stock XYZ. Seven days later you then proceed to sell stock XYZ and are no longer borrowing funds. The interest fee will be calculated as follows:

Interest rate for CAD securities: 5.20% (Wealthsimple Prime rate)

Daily interest rate = Annual interest rate/365 = 5.20/365 = 0.000142%

Interest amount = Principal x daily interest rate x number of days = 10,000 x 0.000142 x 7 = $9.97

The total interest cost for borrowing $10,000 CAD for 7 days would be $9.97.

Interest payment

Interest is deducted monthly from the USD and CAD cash balance in the margin account.

Your account is considered delinquent if you don't have security and/or cash positions in your account when we take your interest payment. To avoid penalties and account restrictions, fund your account using one of these methods:

• Close limit buy orders in your margin account
• Sell securities in your margin account
• Transfer margin-eligible securities to your margin account from another Wealthsimple account
• INTERAC e-Transfer®
• Move funds from your Wealthsimple Cash or other Wealthsimple trade accounts
• Make a deposit from your Visa or Mastercard debit card

You can also use the following methods to fund your account:

• Transfer an external account from another institution
• Make a deposit from a linked bank account
• Wire transfer

Interest payments and margin calls

If an interest payment causes your Margin available balance to fall below zero, you're subject to a margin call. You can pay back amounts borrowed at any time by bringing your CAD/USD margin used balance to zero.

Learn more about the Wealthsimple margin account

Check out the articles below:

• Key concepts and terms in a margin account
• Understand margin calls
• Trade options in your margin account