Margin interest is accrued daily and charged monthly. The interest accrued each day is computed by multiplying the settled margin debit balance by the annual interest rate and dividing the result by 360. The amount of the debit balance determines the annual interest rate on that particular day.

Is margin interest charged yearly?

The margin interest rate that you're given usually represents an annual interest rate. However, you may not necessarily keep your loan for an entire year. Typically, margin interest is charged to your account on the last day of each month.

Do brokers charge interest on margin?

Brokers have managed to sidestep this guideline legally. Brokers charge 10-15% as interest charges on margin financing. So, the monthly finance charge on Rs 100 would work out to anywhere from 80 paise to Rs 1.25. Stock exchange rules allow a broker to charge up to a maximum 2.5% as brokerage charge.