ICICI Direct offers margin funding facility i.e a financing facility to buy in shares if your own pocket doesn't allow at a cost or interest rate. Here the brokerage extends the loan and the trader or investors pays off the interest at an agreed rate. Herein the advantage is that if the stock earns you a return higher than the interest rate then you are not at a loss.
With ICICI Direct on availing this, you need to pay off an initial margin and thereafter the balance can be repaid in 12 months or 365 days time. You can also pledge your available securities to pay the margin money. The interest rate can be as low as 7.9 percent per annum.
Interest rates for margin funding trading
In general the margin funding facility can be availed at an interest rate that may range between 8-18 percent and depends on the stocks invested into and even bigger or HNI investors are able to get in competitive rates. There is also a case when, brokerages during highly volatile times increase such rates to tide over the crisis at hand.
How margin funding works?
The brokerage provides funding for the shares bought by you, you need to pay only part of the total value i.e. say if you buy shares of infosys worth Rs. 1 lakh, you need to pay just Rs. 25000 and the balance shall be funded by the brokerage at the time of pay-in.
Margin trading picks by ICICI Direct
Cy2 1 (% returns)