Brokers That Have Low MTF Interest Rate

Investing in the stock markets can be rewarding. However, sometimes, you may need more funds to buy the desired shares and look for financing avenues. This is where the Margin Trading Facility or MTF can aid you. It allows you to purchase shares beyond the available cash by borrowing funds from your broker.

In return, brokers charge a daily or monthly interest rate on the borrowed margin, which can significantly affect overall returns. Therefore, finding brokers with the competitive MTF interest rates becomes crucial.

In this blog, you will explore some of the leading stockbrokers in India that offer competitive MTF interest rates. You will also learn the key features and facilities these stockbrokers offer. Keep reading to know more.

What is the Margin Trading Facility?

Before moving on to the top brokers with the low MTF interest rates, you must first understand what MTF is. It is a financial service that allows you to trade in the stock market by borrowing funds from your broker. It is a leveraging tool that helps you buy more securities than you could otherwise buy. MTF can amplify potential returns but comes with significant risks if the market moves unfavourably.

Let's understand this with the help of an example. Suppose you have Rs. 30,000 in your trading account but wish to buy shares worth Rs. 50,000. You can use the MTF facility by your broker to borrow the additional Rs. 20,000 and agree to pay an interest at a pre-determined rate.

MTF is particularly useful for traders who want to capitalize on short-term price movements. It allows them to take larger positions than their capital permits.

1. HDFC SKY

HDFC Sky is among the best trading platforms for those seeking competitive MTF interest rates. Backed by HDFC Securities, it allows you to invest in stocks, Exchange-Traded Funds (ETFs), Initial Public Offerings (IPO), mutual funds, and derivatives, among others. Whether you seek an SIP app or a stock trading app, HDFC SKY can be your perfect ally.

To start using the MTF facility, download the HDFC SKY share market app on your smartphone or visit their website to open a Demat account. You can buy stocks of up to four times your buying power by leveraging this facility and borrowing funds. You can even enjoy zero interest rates on MTF for the first 30 days.

Other attractive features of HDFC Sky's MTF facility include:

• MTF Interest Rate starting from 12% per annum
• Up to 4x margin available
• Estimate your borrowing cost with a margin calculator
• Hold your stocks for up to T+275 days
• Flexible collateral options for margin
• Monitor your margin in real-time
• No hidden costs

2. Zerodha

Zerodha is India's largest discount stockbroker, known for its competitive pricing in stock trading and margin facilities. To use the MTF facility, you can download the Zerodha Kite app on your smartphone. The MTF interest rate offered by Zerodha is highly competitive, starting from 0.04% per day or 15.72% per annum of the funded amount.

Apart from stocks, you can also invest in bonds, IPOs, ETFs, and mutual funds through the Zerodha Kite app. The key features of Zerodha's MTF include:

• Competitive interest rates for margin trading
• Complete transparency with zero hidden costs
• Get real-time margin updates on the Kite app
• Avail of MTF for a broad range of stocks approved by the exchanges

3. Upstox

Upstox is another popular discount stockbroker in India. Known for its innovative trading features and competitive brokerage structure, Upstox has gained significant popularity quickly. It allows you to invest in various instruments and use borrowing funds from a margin trading facility. Upstox MTF charges start from 20.86% per annum.

Other key features of Upstox's MTF include:

• Competitive interest rates for margin trading
• Intuitive trading app where you can borrow easily
• A wide range of stocks approved for MTF
• Flexibility to choose from multiple brokerage plans as per your trading needs

4. ICICI Direct

ICICI Direct is a prominent player in the Indian stockbroking market. While it primarily caters to high-net-worth individuals (HNIs) and premium clients, it has offered competitive rates for MTF. ICICI Direct MTF charges from 9.65% (Rs 4,999 one time fee) to 17.99% per annum (Rs 299 Annual Fee).

Below are the key features of the ICICI Direct MTF facility:

• Flexible interest rate based on your portfolio size and trading volume
• Enhance your buying power up to four times
• Access to exclusive research reports and stock recommendations
• Withdraw funds by pledging shares in your Demat account

5. Angel One

Angel One is another popular full-service stockbroker in India known for its competitive pricing and excellent customer service. Its MTF interest rate is highly competitive and aligns closely with those of other leading brokers. It starts from 0.041% per day or 14.99% per annum. Apart from affordable interest rates, several value-added services make Angel One a strong contender in the MTF space.

The key features include:

• Zero brokerage charges for the first 30 days
• Increase your buying power by four times
• The super convenient process to avail of MTF

Conclusion

MTF is a powerful tool that can help you amplify your returns by increasing your buying capacity multiple times. However, you must know the interest charges, which may eat into your profits if not managed properly. The brokers above offer the MTF facility with highly competitive interest rates for cost-conscious traders like you. The table below can help you compare the MTF interest rates of different stockbrokers and select the best one as per your needs.

You can select the best broker for your trading style and personal preferences and open Demat account now to start using the Margin Trading facility.