The Final, Definitive Thread on Brokerage Transfer Bonuses

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RocketShipTech
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by RocketShipTech »

Here is another Interactive Brokers offer.

Sign up for an IB account through stockbrokers.com and your "margin rate charged for loans up to USD 100,000 will be equal to the rate for loans of USD 100,000.01 to USD 1,000,000." In other words right now you can get a loan for 1.1%, even less on an after-tax basis if you itemize deductions. This comes as close to borrowing for free as I have seen.

https://www.interactivebrokers.com/en/? ... nr=stkbrks (not a personal referral link)
muffins14
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by muffins14 »

Could you elaborate on how one can deduct margin interest when you itemize deductions? Does it require also having a mortgage and doing some accounting wizardry?
RocketShipTech
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by RocketShipTech »

muffins14 wrote: Mon Aug 10, 2020 11:35 pm Could you elaborate on how one can deduct margin interest when you itemize deductions? Does it require also having a mortgage and doing some accounting wizardry?
Schwab explains it well:

https://www.schwab.com/resource-center/ ... deductible

For me the 1.1% rate is actually 0.6% after tax.
yougotitdude
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by yougotitdude »

RocketShipTech wrote: Mon Aug 10, 2020 11:07 pm Here is another Interactive Brokers offer.

Sign up for an IB account through stockbrokers.com and your "margin rate charged for loans up to USD 100,000 will be equal to the rate for loans of USD 100,000.01 to USD 1,000,000." In other words right now you can get a loan for 1.1%, even less on an after-tax basis if you itemize deductions. This comes as close to borrowing for free as I have seen.

https://www.interactivebrokers.com/en/? ... nr=stkbrks (not a personal referral link)
Thanks for posting Interesting. Where do you see the rate of $100,000-$1,000,000? All I see is: "Open and fund a new account to be eligible for a special rate on the first USD 100,000* of a margin loan"
RocketShipTech
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by RocketShipTech »

yougotitdude wrote: Tue Aug 11, 2020 10:36 am
RocketShipTech wrote: Mon Aug 10, 2020 11:07 pm Here is another Interactive Brokers offer.

Sign up for an IB account through stockbrokers.com and your "margin rate charged for loans up to USD 100,000 will be equal to the rate for loans of USD 100,000.01 to USD 1,000,000." In other words right now you can get a loan for 1.1%, even less on an after-tax basis if you itemize deductions. This comes as close to borrowing for free as I have seen.

https://www.interactivebrokers.com/en/? ... nr=stkbrks (not a personal referral link)
Thanks for posting Interesting. Where do you see the rate of $100,000-$1,000,000? All I see is: "Open and fund a new account to be eligible for a special rate on the first USD 100,000* of a margin loan"
scroll down to the fine print
yougotitdude
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by yougotitdude »

RocketShipTech wrote: Tue Aug 11, 2020 10:54 am
yougotitdude wrote: Tue Aug 11, 2020 10:36 am
RocketShipTech wrote: Mon Aug 10, 2020 11:07 pm Here is another Interactive Brokers offer.

Sign up for an IB account through stockbrokers.com and your "margin rate charged for loans up to USD 100,000 will be equal to the rate for loans of USD 100,000.01 to USD 1,000,000." In other words right now you can get a loan for 1.1%, even less on an after-tax basis if you itemize deductions. This comes as close to borrowing for free as I have seen.

https://www.interactivebrokers.com/en/? ... nr=stkbrks (not a personal referral link)
Thanks for posting Interesting. Where do you see the rate of $100,000-$1,000,000? All I see is: "Open and fund a new account to be eligible for a special rate on the first USD 100,000* of a margin loan"
scroll down to the fine print
found it. thanks!
ras4250
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by ras4250 »

RocketShipTech wrote: Mon Aug 10, 2020 11:07 pm Here is another Interactive Brokers offer.

Sign up for an IB account through stockbrokers.com and your "margin rate charged for loans up to USD 100,000 will be equal to the rate for loans of USD 100,000.01 to USD 1,000,000." In other words right now you can get a loan for 1.1%, even less on an after-tax basis if you itemize deductions. This comes as close to borrowing for free as I have seen.

https://www.interactivebrokers.com/en/? ... nr=stkbrks (not a personal referral link)
Does anyone have any experience with taking an Interactive Brokers Margin Loan and actually withdrawing it as cash? I chatted with their support and they said the amount eligible to withdraw changes based on some factors he could not tell me. Anyone have any actual use-case to withdraw cash by margin loan with them?
mervinj7
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by mervinj7 »

ras4250 wrote: Tue Aug 11, 2020 3:38 pm
RocketShipTech wrote: Mon Aug 10, 2020 11:07 pm Here is another Interactive Brokers offer.

Sign up for an IB account through stockbrokers.com and your "margin rate charged for loans up to USD 100,000 will be equal to the rate for loans of USD 100,000.01 to USD 1,000,000." In other words right now you can get a loan for 1.1%, even less on an after-tax basis if you itemize deductions. This comes as close to borrowing for free as I have seen.

https://www.interactivebrokers.com/en/? ... nr=stkbrks (not a personal referral link)
Does anyone have any experience with taking an Interactive Brokers Margin Loan and actually withdrawing it as cash? I chatted with their support and they said the amount eligible to withdraw changes based on some factors he could not tell me. Anyone have any actual use-case to withdraw cash by margin loan with them?
If that were true, then it's cheaper than using a HELOC for temporary liquidity. Could be useful in some circumstances.
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whodidntante
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by whodidntante »

ras4250 wrote: Tue Aug 11, 2020 3:38 pm
RocketShipTech wrote: Mon Aug 10, 2020 11:07 pm Here is another Interactive Brokers offer.

Sign up for an IB account through stockbrokers.com and your "margin rate charged for loans up to USD 100,000 will be equal to the rate for loans of USD 100,000.01 to USD 1,000,000." In other words right now you can get a loan for 1.1%, even less on an after-tax basis if you itemize deductions. This comes as close to borrowing for free as I have seen.

https://www.interactivebrokers.com/en/? ... nr=stkbrks (not a personal referral link)
Does anyone have any experience with taking an Interactive Brokers Margin Loan and actually withdrawing it as cash? I chatted with their support and they said the amount eligible to withdraw changes based on some factors he could not tell me. Anyone have any actual use-case to withdraw cash by margin loan with them?
Sure. There isn't much to know, however. You need a margin account with marginable securities. Then you simply make a withdrawal that exceeds the amount of cash you have. You can take it as a wire transfer, ACH, check, or you can spend money on the debit card they give you or use bill pay. What is it you need to know?

I suspect IB support will give you accurate but infuriating answers if you ask basic questions. They have a reputation to maintain. :twisted:
ras4250
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by ras4250 »

whodidntante wrote: Tue Aug 11, 2020 3:53 pm Sure. There isn't much to know, however. You need a margin account with marginable securities. Then you simply make a withdrawal that exceeds the amount of cash you have. You can take it as a wire transfer, ACH, check, or you can spend money on the debit card they give you or use bill pay. What is it you need to know?

I suspect IB support will give you accurate but infuriating answers if you ask basic questions. They have a reputation to maintain. :twisted:
Thanks! Looking for amounts able to withdraw. I.e., if open new account and transfer in $500k of securities, how much could I withdraw on margin? $50k? $100k? - chat rep could not give me a definite answer. Considering doing exactly what prior poster said, HELOC for 1.1%.
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whodidntante
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by whodidntante »

ras4250 wrote: Tue Aug 11, 2020 4:14 pm
whodidntante wrote: Tue Aug 11, 2020 3:53 pm Sure. There isn't much to know, however. You need a margin account with marginable securities. Then you simply make a withdrawal that exceeds the amount of cash you have. You can take it as a wire transfer, ACH, check, or you can spend money on the debit card they give you or use bill pay. What is it you need to know?

I suspect IB support will give you accurate but infuriating answers if you ask basic questions. They have a reputation to maintain. :twisted:
Thanks! Looking for amounts able to withdraw. I.e., if open new account and transfer in $500k of securities, how much could I withdraw on margin? $50k? $100k? - chat rep could not give me a definite answer. Considering doing exactly what prior poster said, HELOC for 1.1%.
Exactly what I said. Accurate but infuriating. :twisted:

Assuming those are equity index ETFs and you open a Reg T account, you can withdraw approximately 375k at IB. 100k is not a problem.
ras4250
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by ras4250 »

whodidntante wrote: Tue Aug 11, 2020 4:27 pm
ras4250 wrote: Tue Aug 11, 2020 4:14 pm
whodidntante wrote: Tue Aug 11, 2020 3:53 pm Sure. There isn't much to know, however. You need a margin account with marginable securities. Then you simply make a withdrawal that exceeds the amount of cash you have. You can take it as a wire transfer, ACH, check, or you can spend money on the debit card they give you or use bill pay. What is it you need to know?

I suspect IB support will give you accurate but infuriating answers if you ask basic questions. They have a reputation to maintain. :twisted:
Thanks! Looking for amounts able to withdraw. I.e., if open new account and transfer in $500k of securities, how much could I withdraw on margin? $50k? $100k? - chat rep could not give me a definite answer. Considering doing exactly what prior poster said, HELOC for 1.1%.
Exactly what I said. Accurate but infuriating. :twisted:

Assuming those are equity index ETFs and you open a Reg T account, you can withdraw approximately 375k at IB. 100k is not a problem.
Great, thank you! Appreciate it.
worthit
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by worthit »

whodidntante wrote: Tue Aug 11, 2020 3:53 pm
ras4250 wrote: Tue Aug 11, 2020 3:38 pm
RocketShipTech wrote: Mon Aug 10, 2020 11:07 pm Here is another Interactive Brokers offer.

Sign up for an IB account through stockbrokers.com and your "margin rate charged for loans up to USD 100,000 will be equal to the rate for loans of USD 100,000.01 to USD 1,000,000." In other words right now you can get a loan for 1.1%, even less on an after-tax basis if you itemize deductions. This comes as close to borrowing for free as I have seen.

https://www.interactivebrokers.com/en/? ... nr=stkbrks (not a personal referral link)
Does anyone have any experience with taking an Interactive Brokers Margin Loan and actually withdrawing it as cash? I chatted with their support and they said the amount eligible to withdraw changes based on some factors he could not tell me. Anyone have any actual use-case to withdraw cash by margin loan with them?
Sure. There isn't much to know, however. You need a margin account with marginable securities. Then you simply make a withdrawal that exceeds the amount of cash you have. You can take it as a wire transfer, ACH, check, or you can spend money on the debit card they give you or use bill pay. What is it you need to know?

I suspect IB support will give you accurate but infuriating answers if you ask basic questions. They have a reputation to maintain. :twisted:
Can someone explain to me in simple terms what this means? I tried educating myself online reading about margin loans but wanted to check with the financially savvy BH crowd as I would like to better understand this.

Similar to ras4250, I could potentially move $500k. Does this mean that I can get a loan for 1.1%? Basically what I would like to know is - What is the duration of this loan? What would be the terms?

If so, I am thinking of taking a loan of $60,000 and using that to reduce my current jumbo mortgage to a conventional mortgage so I can get a more competitive mortgage rate. This will bring down my current rate of 2.875% for a 30 year fixed to probably as low as 2.25% for a 30 year fixed.

I am not even sure if this is a good idea. Given, I am new to margin loans, is this a good idea or a bad idea that I will regret later? Just looking for the pros and cons.

TIA.
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whodidntante
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by whodidntante »

worthit wrote: Wed Aug 12, 2020 3:25 pm
whodidntante wrote: Tue Aug 11, 2020 3:53 pm
ras4250 wrote: Tue Aug 11, 2020 3:38 pm
RocketShipTech wrote: Mon Aug 10, 2020 11:07 pm Here is another Interactive Brokers offer.

Sign up for an IB account through stockbrokers.com and your "margin rate charged for loans up to USD 100,000 will be equal to the rate for loans of USD 100,000.01 to USD 1,000,000." In other words right now you can get a loan for 1.1%, even less on an after-tax basis if you itemize deductions. This comes as close to borrowing for free as I have seen.

https://www.interactivebrokers.com/en/? ... nr=stkbrks (not a personal referral link)
Does anyone have any experience with taking an Interactive Brokers Margin Loan and actually withdrawing it as cash? I chatted with their support and they said the amount eligible to withdraw changes based on some factors he could not tell me. Anyone have any actual use-case to withdraw cash by margin loan with them?
Sure. There isn't much to know, however. You need a margin account with marginable securities. Then you simply make a withdrawal that exceeds the amount of cash you have. You can take it as a wire transfer, ACH, check, or you can spend money on the debit card they give you or use bill pay. What is it you need to know?

I suspect IB support will give you accurate but infuriating answers if you ask basic questions. They have a reputation to maintain. :twisted:
Can someone explain to me in simple terms what this means? I tried educating myself online reading about margin loans but wanted to check with the financially savvy BH crowd as I would like to better understand this.

Similar to ras4250, I could potentially move $500k. Does this mean that I can get a loan for 1.1%? Basically what I would like to know is - What is the duration of this loan? What would be the terms?

If so, I am thinking of taking a loan of $60,000 and using that to reduce my current jumbo mortgage to a conventional mortgage so I can get a more competitive mortgage rate. This will bring down my current rate of 2.875% for a 30 year fixed to probably as low as 2.25% for a 30 year fixed.

I am not even sure if this is a good idea. Given, I am new to margin loans, is this a good idea or a bad idea that I will regret later? Just looking for the pros and cons.

TIA.
If you open under that reduced margin rate promo, yes. The duration of the loan is infinite and no payments are required. The interest will simply compound if you don't pay anything. However, if you fail to meet maintenance margin, IB will liquidate your positions until you do. The rate is variable (BM + 1%) and cannot drop below 1% unless you borrow more than 1 million dollars.

I answered with an example of how much you can withdraw with a specific example upthread.

Margin loans are a tool. In some situations, it's a great idea. In others, potentially harmful. Your use case sounds fine. However, your loan originator might want to know where that 60k transfer into your bank account came from. Just wait for them to ask and answer honestly if they do.

You'll understand it much better if you just take a small margin loan. You can drive yourself crazy reading about this stuff. It's not difficult, but the terminology is full-on nerd stuff.
ras4250
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by ras4250 »

whodidntante wrote: Wed Aug 12, 2020 3:47 pm If you open under that reduced margin rate promo, yes. The duration of the loan is infinite and no payments are required. The interest will simply compound if you don't pay anything. However, if you fail to meet maintenance margin, IB will liquidate your positions until you do. The rate is variable (BM + 1%) and cannot drop below 1% unless you borrow more than 1 million dollars.

I answered with an example of how much you can withdraw with a specific example upthread.

Margin loans are a tool. In some situations, it's a great idea. In others, potentially harmful. Your use case sounds fine. However, your loan originator might want to know where that 60k transfer into your bank account came from. Just wait for them to ask and answer honestly if they do.

You'll understand it much better if you just take a small margin loan. You can drive yourself crazy reading about this stuff. It's not difficult, but the terminology is full-on nerd stuff.
Can you allocate a payment to pay the interest each month? i.e., if you borrow $100,000 at 1.1% the monthly interest $91.67. The principal will always remain at $100k unless you pay it down. The interest will always be $91.67 per month as long as you pay the interest. Almost like an infinte interest-only loan. Yes?
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whodidntante
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by whodidntante »

ras4250 wrote: Wed Aug 12, 2020 9:43 pm
whodidntante wrote: Wed Aug 12, 2020 3:47 pm If you open under that reduced margin rate promo, yes. The duration of the loan is infinite and no payments are required. The interest will simply compound if you don't pay anything. However, if you fail to meet maintenance margin, IB will liquidate your positions until you do. The rate is variable (BM + 1%) and cannot drop below 1% unless you borrow more than 1 million dollars.

I answered with an example of how much you can withdraw with a specific example upthread.

Margin loans are a tool. In some situations, it's a great idea. In others, potentially harmful. Your use case sounds fine. However, your loan originator might want to know where that 60k transfer into your bank account came from. Just wait for them to ask and answer honestly if they do.

You'll understand it much better if you just take a small margin loan. You can drive yourself crazy reading about this stuff. It's not difficult, but the terminology is full-on nerd stuff.
Can you allocate a payment to pay the interest each month? i.e., if you borrow $100,000 at 1.1% the monthly interest $91.67. The principal will always remain at $100k unless you pay it down. The interest will always be $91.67 per month as long as you pay the interest. Almost like an infinte interest-only loan. Yes?
The way you "pay" a margin loan is to transfer money into your brokerage account. That's it. If you have a margin loan it first goes towards paying it down instead of going to your cash balance. You would be able to avoid an ever expanding margin loan if you want to. But you probably have dividend paying securities, and if you take the dividends as cash, that will also pay down the margin loan. So the loan would shrink over time as long as you have more dividends than margin interest.
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Steve Reading
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by Steve Reading »

worthit wrote: Wed Aug 12, 2020 3:25 pm
whodidntante wrote: Tue Aug 11, 2020 3:53 pm
ras4250 wrote: Tue Aug 11, 2020 3:38 pm
RocketShipTech wrote: Mon Aug 10, 2020 11:07 pm Here is another Interactive Brokers offer.

Sign up for an IB account through stockbrokers.com and your "margin rate charged for loans up to USD 100,000 will be equal to the rate for loans of USD 100,000.01 to USD 1,000,000." In other words right now you can get a loan for 1.1%, even less on an after-tax basis if you itemize deductions. This comes as close to borrowing for free as I have seen.

https://www.interactivebrokers.com/en/? ... nr=stkbrks (not a personal referral link)
Does anyone have any experience with taking an Interactive Brokers Margin Loan and actually withdrawing it as cash? I chatted with their support and they said the amount eligible to withdraw changes based on some factors he could not tell me. Anyone have any actual use-case to withdraw cash by margin loan with them?
Sure. There isn't much to know, however. You need a margin account with marginable securities. Then you simply make a withdrawal that exceeds the amount of cash you have. You can take it as a wire transfer, ACH, check, or you can spend money on the debit card they give you or use bill pay. What is it you need to know?

I suspect IB support will give you accurate but infuriating answers if you ask basic questions. They have a reputation to maintain. :twisted:
Can someone explain to me in simple terms what this means? I tried educating myself online reading about margin loans but wanted to check with the financially savvy BH crowd as I would like to better understand this.

Similar to ras4250, I could potentially move $500k. Does this mean that I can get a loan for 1.1%? Basically what I would like to know is - What is the duration of this loan? What would be the terms?

If so, I am thinking of taking a loan of $60,000 and using that to reduce my current jumbo mortgage to a conventional mortgage so I can get a more competitive mortgage rate. This will bring down my current rate of 2.875% for a 30 year fixed to probably as low as 2.25% for a 30 year fixed.

I am not even sure if this is a good idea. Given, I am new to margin loans, is this a good idea or a bad idea that I will regret later? Just looking for the pros and cons.

TIA.
Before you do this, consider two things:
1) Do you own any bonds? If so, liquidate 60K in bonds and use that instead. In other words, instead of "lending your money" out with bonds and borrowing from a broker, simply "borrow from yourself".
2) Assuming you can't do that (i.e. your 500k is in stocks, or the bonds have massive capital gains), I will just warn you that Interactive Brokers uses Trader Workstation (TWS) for buying and selling. And this is NOT as easy and straightforward as a Vanguard or Schwab web page. I probably spent like a week in tutorials to make sure I understood where all of the buttons were. It's designed for professionals. Just google some images and you'll see what I mean.

IB does have a web app for buying and selling which works OK but it is pretty ratchet and I'm not sure it works that well with margin stuff. And if you have any questions and call them, they'll just tell you "no don't use that, use TWS".

Just letting you know what you might be getting yourself into.
"... so high a present discounted value of wealth, it is only prudent for him to put more into common stocks compared to his present tangible wealth, borrowing if necessary" - Paul Samuelson
worthit
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by worthit »

whodidntante wrote: Wed Aug 12, 2020 3:47 pm
worthit wrote: Wed Aug 12, 2020 3:25 pm
whodidntante wrote: Tue Aug 11, 2020 3:53 pm
ras4250 wrote: Tue Aug 11, 2020 3:38 pm
RocketShipTech wrote: Mon Aug 10, 2020 11:07 pm Here is another Interactive Brokers offer.

Sign up for an IB account through stockbrokers.com and your "margin rate charged for loans up to USD 100,000 will be equal to the rate for loans of USD 100,000.01 to USD 1,000,000." In other words right now you can get a loan for 1.1%, even less on an after-tax basis if you itemize deductions. This comes as close to borrowing for free as I have seen.

https://www.interactivebrokers.com/en/? ... nr=stkbrks (not a personal referral link)
Does anyone have any experience with taking an Interactive Brokers Margin Loan and actually withdrawing it as cash? I chatted with their support and they said the amount eligible to withdraw changes based on some factors he could not tell me. Anyone have any actual use-case to withdraw cash by margin loan with them?
Sure. There isn't much to know, however. You need a margin account with marginable securities. Then you simply make a withdrawal that exceeds the amount of cash you have. You can take it as a wire transfer, ACH, check, or you can spend money on the debit card they give you or use bill pay. What is it you need to know?

I suspect IB support will give you accurate but infuriating answers if you ask basic questions. They have a reputation to maintain. :twisted:
Can someone explain to me in simple terms what this means? I tried educating myself online reading about margin loans but wanted to check with the financially savvy BH crowd as I would like to better understand this.

Similar to ras4250, I could potentially move $500k. Does this mean that I can get a loan for 1.1%? Basically what I would like to know is - What is the duration of this loan? What would be the terms?

If so, I am thinking of taking a loan of $60,000 and using that to reduce my current jumbo mortgage to a conventional mortgage so I can get a more competitive mortgage rate. This will bring down my current rate of 2.875% for a 30 year fixed to probably as low as 2.25% for a 30 year fixed.

I am not even sure if this is a good idea. Given, I am new to margin loans, is this a good idea or a bad idea that I will regret later? Just looking for the pros and cons.

TIA.
If you open under that reduced margin rate promo, yes. The duration of the loan is infinite and no payments are required. The interest will simply compound if you don't pay anything. However, if you fail to meet maintenance margin, IB will liquidate your positions until you do. The rate is variable (BM + 1%) and cannot drop below 1% unless you borrow more than 1 million dollars.

I answered with an example of how much you can withdraw with a specific example upthread.

Margin loans are a tool. In some situations, it's a great idea. In others, potentially harmful. Your use case sounds fine. However, your loan originator might want to know where that 60k transfer into your bank account came from. Just wait for them to ask and answer honestly if they do.

You'll understand it much better if you just take a small margin loan. You can drive yourself crazy reading about this stuff. It's not difficult, but the terminology is full-on nerd stuff.
Thanks whodidntante.
worthit
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by worthit »

Steve Reading wrote: Wed Aug 12, 2020 10:32 pm
worthit wrote: Wed Aug 12, 2020 3:25 pm
whodidntante wrote: Tue Aug 11, 2020 3:53 pm
ras4250 wrote: Tue Aug 11, 2020 3:38 pm
RocketShipTech wrote: Mon Aug 10, 2020 11:07 pm Here is another Interactive Brokers offer.

Sign up for an IB account through stockbrokers.com and your "margin rate charged for loans up to USD 100,000 will be equal to the rate for loans of USD 100,000.01 to USD 1,000,000." In other words right now you can get a loan for 1.1%, even less on an after-tax basis if you itemize deductions. This comes as close to borrowing for free as I have seen.

https://www.interactivebrokers.com/en/? ... nr=stkbrks (not a personal referral link)
Does anyone have any experience with taking an Interactive Brokers Margin Loan and actually withdrawing it as cash? I chatted with their support and they said the amount eligible to withdraw changes based on some factors he could not tell me. Anyone have any actual use-case to withdraw cash by margin loan with them?
Sure. There isn't much to know, however. You need a margin account with marginable securities. Then you simply make a withdrawal that exceeds the amount of cash you have. You can take it as a wire transfer, ACH, check, or you can spend money on the debit card they give you or use bill pay. What is it you need to know?

I suspect IB support will give you accurate but infuriating answers if you ask basic questions. They have a reputation to maintain. :twisted:
Can someone explain to me in simple terms what this means? I tried educating myself online reading about margin loans but wanted to check with the financially savvy BH crowd as I would like to better understand this.

Similar to ras4250, I could potentially move $500k. Does this mean that I can get a loan for 1.1%? Basically what I would like to know is - What is the duration of this loan? What would be the terms?

If so, I am thinking of taking a loan of $60,000 and using that to reduce my current jumbo mortgage to a conventional mortgage so I can get a more competitive mortgage rate. This will bring down my current rate of 2.875% for a 30 year fixed to probably as low as 2.25% for a 30 year fixed.

I am not even sure if this is a good idea. Given, I am new to margin loans, is this a good idea or a bad idea that I will regret later? Just looking for the pros and cons.

TIA.
Before you do this, consider two things:
1) Do you own any bonds? If so, liquidate 60K in bonds and use that instead. In other words, instead of "lending your money" out with bonds and borrowing from a broker, simply "borrow from yourself".
2) Assuming you can't do that (i.e. your 500k is in stocks, or the bonds have massive capital gains), I will just warn you that Interactive Brokers uses Trader Workstation (TWS) for buying and selling. And this is NOT as easy and straightforward as a Vanguard or Schwab web page. I probably spent like a week in tutorials to make sure I understood where all of the buttons were. It's designed for professionals. Just google some images and you'll see what I mean.

IB does have a web app for buying and selling which works OK but it is pretty ratchet and I'm not sure it works that well with margin stuff. And if you have any questions and call them, they'll just tell you "no don't use that, use TWS".

Just letting you know what you might be getting yourself into.
Thanks and appreciate it, Steve Reading.

Agree, a lot of nerdy phrases and terminologies. I am going to take the time to understand and perhaps try a small loan to get my feet.
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whodidntante
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by whodidntante »

Steve Reading wrote: Wed Aug 12, 2020 10:32 pm IB does have a web app for buying and selling which works OK but it is pretty ratchet and I'm not sure it works that well with margin stuff. And if you have any questions and call them, they'll just tell you "no don't use that, use TWS".
You don't need to use TWS to take a margin loan at IB. You withdraw more cash than you have in the account, using the method you find most convenient. You can use the "ratchet" if you want. Ha! :D
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by ras4250 »

yes, thanks to both. very helpful.

also to note: the free (Lite) version currently has margin rates at 2.6%, where the paid (Pro) version is 1.1% with the promo above. But the Pro requires a $10 monthly fee. If you are doing it for a margin loan for say $60k it is still worth paying the $10/month pro as your monthly margin interest on $60k would be $65 ($55 + $10) at 1.1% and $130 at 2.6%.
ras4250
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by ras4250 »

Is there any Schwab client who wants to send me referal code/link? They say you can do so at: https://www.schwab.com/refer If so, please PM me, thanks!
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by Steve Reading »

ras4250 wrote: Thu Aug 13, 2020 10:15 am yes, thanks to both. very helpful.

also to note: the free (Lite) version currently has margin rates at 2.6%, where the paid (Pro) version is 1.1% with the promo above. But the Pro requires a $10 monthly fee. If you are doing it for a margin loan for say $60k it is still worth paying the $10/month pro as your monthly margin interest on $60k would be $65 ($55 + $10) at 1.1% and $130 at 2.6%.
The $10 monthly fee does not apply if you have more than $100k in assets. Pro does mean you have to pay commissions to buy and sell (about $1 for most ~10K purchases I've made, if that gives you some context). Lite is completely commission free.
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tj
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by tj »

ras4250 wrote: Thu Aug 13, 2020 11:18 am Is there any Schwab client who wants to send me referal code/link? They say you can do so at: https://www.schwab.com/refer If so, please PM me, thanks!
There's a thread at DoctorofCredit most likely.
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by tj »

Steve Reading wrote: Thu Aug 13, 2020 11:26 am
ras4250 wrote: Thu Aug 13, 2020 10:15 am yes, thanks to both. very helpful.

also to note: the free (Lite) version currently has margin rates at 2.6%, where the paid (Pro) version is 1.1% with the promo above. But the Pro requires a $10 monthly fee. If you are doing it for a margin loan for say $60k it is still worth paying the $10/month pro as your monthly margin interest on $60k would be $65 ($55 + $10) at 1.1% and $130 at 2.6%.
The $10 monthly fee does not apply if you have more than $100k in assets. Pro does mean you have to pay commissions to buy and sell (about $1 for most ~10K purchases I've made, if that gives you some context). Lite is completely commission free.
Is that a consistent percentage for all sizes?
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by whodidntante »

tj wrote: Thu Aug 13, 2020 12:14 pm
Steve Reading wrote: Thu Aug 13, 2020 11:26 am
ras4250 wrote: Thu Aug 13, 2020 10:15 am yes, thanks to both. very helpful.

also to note: the free (Lite) version currently has margin rates at 2.6%, where the paid (Pro) version is 1.1% with the promo above. But the Pro requires a $10 monthly fee. If you are doing it for a margin loan for say $60k it is still worth paying the $10/month pro as your monthly margin interest on $60k would be $65 ($55 + $10) at 1.1% and $130 at 2.6%.
The $10 monthly fee does not apply if you have more than $100k in assets. Pro does mean you have to pay commissions to buy and sell (about $1 for most ~10K purchases I've made, if that gives you some context). Lite is completely commission free.
Is that a consistent percentage for all sizes?
This is their commission schedule.
https://www.interactivebrokers.com/en/index.php?f=1590
ras4250
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by ras4250 »

Steve Reading wrote: Thu Aug 13, 2020 11:26 am
ras4250 wrote: Thu Aug 13, 2020 10:15 am yes, thanks to both. very helpful.

also to note: the free (Lite) version currently has margin rates at 2.6%, where the paid (Pro) version is 1.1% with the promo above. But the Pro requires a $10 monthly fee. If you are doing it for a margin loan for say $60k it is still worth paying the $10/month pro as your monthly margin interest on $60k would be $65 ($55 + $10) at 1.1% and $130 at 2.6%.
The $10 monthly fee does not apply if you have more than $100k in assets. Pro does mean you have to pay commissions to buy and sell (about $1 for most ~10K purchases I've made, if that gives you some context). Lite is completely commission free.
Did not realize that, good to know, thanks!
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by the way »

caklim00 wrote: Wed Jul 29, 2020 4:55 pm Thank you for your patience and I have received a response from our Promotions Department regarding the promotion you asked for. They advised that your state is not a state that is eligible for this promotion. To receive this promotion a client must meet these requirements:

- Have a TD Bank account.

- Live in one of the following states -ME, NH, MA, CT, VT, NY, NJ, PA, RI, DE, DC, VA, FL, MD, NC, SC

We apologize then that we won't be able to add this promotion to your account. We have another promotion that your account could be eligible for and below I have posted the details. If you have any questions, or would like this other promotion added to your account, please contact me by return email.


Net deposits between 7/1/20 and 9/30/20 will qualify for this offer:
· Deposit $250,000 - $499,999 and receive $350 cash
· Deposit $500,000 - $999,999 and receive $700 cash
· Deposit $1,000,000 or more and receive $1,500 cash
Thanks, I was still considering giving the TDB one a try, but it looks like TDA has pulled all their promos now.
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by the way »

RocketShipTech wrote: Mon Aug 10, 2020 11:07 pm Here is another Interactive Brokers offer.

Sign up for an IB account through stockbrokers.com and your "margin rate charged for loans up to USD 100,000 will be equal to the rate for loans of USD 100,000.01 to USD 1,000,000."
Strange wording imo, since a loan of $100,001 would have a margin rate at Tier 1 on the first 100k and Tier 2 on $1. It would make more sense for the promo to say the "Tier 1 rate is set equal to the Tier 2 rate"
BlackcatCA
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by BlackcatCA »

MikeG62 wrote: Thu Aug 06, 2020 8:44 am Merrill Edge has increased their transfer bonus to $1,000 (for transferring $200K). Requires a 180 day holding period before bonus posts.

See here:

https://www.doctorofcredit.com/merrill- ... vestments/
I can use some BH wisdom.

Situation: DH has a taxable account with funds he likes that do not have etf equivalent for easy transfer to ME. I have stocks that can be used for this transfer for him. I already have ME CMA account and got this bonus earlier this year, so i dont think a joint account can work.

Which is a better way to get DH this bonus?

1. DH opens new ME CMA. I gift (transfer) him stocks from outside account to his new ME account (if it is allowed?).
2. Add DH to my outside account (joint account), then DH opens an individual ME CMA and transfer in himself.

Can either of these work? Any issues to watch out for?
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by MikeG62 »

BlackcatCA wrote: Fri Aug 14, 2020 9:35 pm
MikeG62 wrote: Thu Aug 06, 2020 8:44 am Merrill Edge has increased their transfer bonus to $1,000 (for transferring $200K). Requires a 180 day holding period before bonus posts.

See here:

https://www.doctorofcredit.com/merrill- ... vestments/
I can use some BH wisdom.

Situation: DH has a taxable account with funds he likes that do not have etf equivalent for easy transfer to ME. I have stocks that can be used for this transfer for him. I already have ME CMA account and got this bonus earlier this year, so i dont think a joint account can work.

Which is a better way to get DH this bonus?

1. DH opens new ME CMA. I gift (transfer) him stocks from outside account to his new ME account (if it is allowed?).
2. Add DH to my outside account (joint account), then DH opens an individual ME CMA and transfer in himself.

Can either of these work? Any issues to watch out for?
Why are you so sure the funds your DH owns cannot be transferred to ME or that he needs ETF equivalents to transfer in? Have you called ME and asked about their ability to hold these funds if they were to be transferred in (transfer in-kind) from another broker?

Reason I ask is that for the IRA I opened at ME, I transferred in shares in an institutional share class bond fund with a $1,000,000 minimum investment threshold (WACPX). This is a fund that I had access to through my former employers 401k plan (no it did not have a $1,000,000 minimum entry fee to purchase in the 401k) and upon retiring I rolled over my shares in this fund along with the other positions in my 401k to a rollover IRA at Fidelity. While this fund cannot be purchased on the ME platform, ME was still willing to accept the transfer in of shares in this fund, with the understanding that I could not buy more shares in (add to) this fund on the ME platform (other than as related to dividend reinvestment).

So, I'd call and ask if you have not already done so. Tell them about the fund I was allowed to transfer in if they give you a hard time.

With regard to your second option, I'm not sure I understand what you are proposing Are you saying your husband, after being added as a joint owner on your ME individual account, would transfer shares from that joint account to his newly opened individual account and use those shares to meet the transfer bonus? Since I'm pretty sure this won't work (funds must be new money into ME), I must be misunderstanding what you are thinking here. Can you clarify?
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sc9182
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by sc9182 »

m1finance transfer/bonus update:
Transfer-in took some time to get into their system (approx 2-3 weeks) - even though Fidelity released within 2nd day of receiving the Transfer-out request. So, there is 2-3 weeks in-transit time involved (the positions remained intact/fine/stay-invested, no problem here except a couple of weeks of delay to setup account on m1finance side of the house)

The Transfer-bonus posted exactly on 60th day as per m1finance promotion, which is today. So, they've been prompt here and kept their promise - Kudos m1finance ! (minor inconvenience: m1finance deposited their as-promised Bonus into my Brokerage account, instead of the IRA-account -- guessing will get a 1099 on it !!)

m1finance currently/still have their: "Transfer Promotion" going on:
https://www.m1finance.com/transfer/
up to $2500 bonus on $1 Million transfer-in, require 90 days retain/holding period to obtain the full bonus.

If you decide to go with m1finance - just pay attention to their pie/slices way of investing - if you don't (and make a simple mistake) it could lead to some tax pain if working with "brokerage" instead of IRA/Rollover-IRA side !! Mine was Rollover-IRA, and also read their pie/slices model reasonably well - so no problem (let alone tax-consequences) here.

One more gotcha is - unless you want to invest in pie/slices model, not a great brokerage/platfor for "individual" stock/etf trades. Trades happen on market-rate during their allotted 1-hour in the morning window (or 1 hour in afternoon window if you go with their Pro/paid account feature). I simply stayed without (without needing) any trades FWIW.

Thanks
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by BlackcatCA »

MikeG62 wrote: Sat Aug 15, 2020 6:31 am
BlackcatCA wrote: Fri Aug 14, 2020 9:35 pm
I can use some BH wisdom.

Situation: DH has a taxable account with funds he likes that do not have etf equivalent for easy transfer to ME. I have stocks that can be used for this transfer for him. I already have ME CMA account and got this bonus earlier this year, so i dont think a joint account can work.

Which is a better way to get DH this bonus?

1. DH opens new ME CMA. I gift (transfer) him stocks from outside account to his new ME account (if it is allowed?).
2. Add DH to my outside account (joint account), then DH opens an individual ME CMA and transfer in himself.

Can either of these work? Any issues to watch out for?
Why are you so sure the funds your DH owns cannot be transferred to ME or that he needs ETF equivalents to transfer in? Have you called ME and asked about their ability to hold these funds if they were to be transferred in (transfer in-kind) from another broker?

So, I'd call and ask if you have not already done so. Tell them about the fund I was allowed to transfer in if they give you a hard time.

With regard to your second option, I'm not sure I understand what you are proposing Are you saying your husband, after being added as a joint owner on your ME individual account, would transfer shares from that joint account to his newly opened individual account and use those shares to meet the transfer bonus? Since I'm pretty sure this won't work (funds must be new money into ME), I must be misunderstanding what you are thinking here. Can you clarify?
DH wants to keep that account as it is and add to positions, etc. Hence needs a workaround for the promotion.

2nd option is to add him to one of my individual accounts that is not at ME. Then he opens a ME CMA and transfer stocks from the joint one outside into this individual ME, so funds will be new to ME. The question is whether the joint account to individual account transfer would be allowed, and if there are other issues I didnt think of.

Or if there are simpler solutions. Neither of us want to deal with IRA transfers, so CMA only with one account each.
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by MikeG62 »

BlackcatCA wrote: Sat Aug 15, 2020 9:26 am
MikeG62 wrote: Sat Aug 15, 2020 6:31 am
BlackcatCA wrote: Fri Aug 14, 2020 9:35 pm
I can use some BH wisdom.

Situation: DH has a taxable account with funds he likes that do not have etf equivalent for easy transfer to ME. I have stocks that can be used for this transfer for him. I already have ME CMA account and got this bonus earlier this year, so i dont think a joint account can work.

Which is a better way to get DH this bonus?

1. DH opens new ME CMA. I gift (transfer) him stocks from outside account to his new ME account (if it is allowed?).
2. Add DH to my outside account (joint account), then DH opens an individual ME CMA and transfer in himself.

Can either of these work? Any issues to watch out for?
Why are you so sure the funds your DH owns cannot be transferred to ME or that he needs ETF equivalents to transfer in? Have you called ME and asked about their ability to hold these funds if they were to be transferred in (transfer in-kind) from another broker?

So, I'd call and ask if you have not already done so. Tell them about the fund I was allowed to transfer in if they give you a hard time.

With regard to your second option, I'm not sure I understand what you are proposing Are you saying your husband, after being added as a joint owner on your ME individual account, would transfer shares from that joint account to his newly opened individual account and use those shares to meet the transfer bonus? Since I'm pretty sure this won't work (funds must be new money into ME), I must be misunderstanding what you are thinking here. Can you clarify?
DH wants to keep that account as it is and add to positions, etc. Hence needs a workaround for the promotion.

2nd option is to add him to one of my individual accounts that is not at ME. Then he opens a ME CMA and transfer stocks from the joint one outside into this individual ME, so funds will be new to ME. The question is whether the joint account to individual account transfer would be allowed, and if there are other issues I didnt think of.

Or if there are simpler solutions. Neither of us want to deal with IRA transfers, so CMA only with one account each.
I don’t see any issues on the ME side with what you propose. The only issue could be the other brokerage where he is added as a joint owner then transferring funds to an account he owns individually. Sometimes banks/brokers seem to balk at this other times they don’t.

Your husband could do a partial transfer of that other account - so can still add to positions where they are now. Only transfer enough shares to meet the $200k minimum.

I would not worry about partial IRA rollover (direct trustee to trustee transfer). That was just as easy as doing it with the CMA.
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SlowMovingInvestor
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by SlowMovingInvestor »

Pretty good bonus from Citi Wealth Management

https://www.doctorofcredit.com/citi-wea ... 500-bonus/


$500 for $50K transfer looks like the sweet spot. And you only have to keep it there 3-4 months (not completely clear).

Apparently you can do a self directed account too, but the process is cumbersome.

If it were someone other than Citi, I'd be tempted but I know nothing about their wealth management or brokerage.
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by BuddyJet »

Citi brokerage website is OK. Not great, not bad, basically workable.

Easiest approach is to transfer in required securities, hold for required period and transfer out. They do charge $75 for complete transfers out.
People say nothing is impossible. I do nothing all day.
SlowMovingInvestor
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by SlowMovingInvestor »

BuddyJet wrote: Tue Aug 18, 2020 5:55 pm Citi brokerage website is OK. Not great, not bad, basically workable.

Easiest approach is to transfer in required securities, hold for required period and transfer out. They do charge $75 for complete transfers out.
Thanks ! Do they support ACATS transfers ?

Do you have any experience with their 'Wealth Management' group ?
BuddyJet
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by BuddyJet »

SlowMovingInvestor wrote: Tue Aug 18, 2020 6:02 pm
BuddyJet wrote: Tue Aug 18, 2020 5:55 pm Citi brokerage website is OK. Not great, not bad, basically workable.

Easiest approach is to transfer in required securities, hold for required period and transfer out. They do charge $75 for complete transfers out.
Thanks ! Do they support ACATS transfers ?

Do you have any experience with their 'Wealth Management' group ?
They do support ACATS but I think I had to fax/mail in a paper form since I was doing a partial account transfer and not full.

No experience with “Wealrh Management”. I was only there for the bonus.
People say nothing is impossible. I do nothing all day.
shess
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by shess »

RocketShipTech wrote: Tue Aug 11, 2020 12:40 am
muffins14 wrote: Mon Aug 10, 2020 11:35 pm Could you elaborate on how one can deduct margin interest when you itemize deductions? Does it require also having a mortgage and doing some accounting wizardry?
Schwab explains it well:

https://www.schwab.com/resource-center/ ... deductible

For me the 1.1% rate is actually 0.6% after tax.
"Investment interest expense is the interest paid on money borrowed to purchase taxable investments. This includes margin loans for buying stock in your brokerage account."

I've always read this to mean that you can deduct your margin loan insofar as you use the proceeds to purchase taxable investments. If you use it to pay for a vehicle or a remodel on your home, that wouldn't be a taxable investment.
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by RocketShipTech »

shess wrote: Tue Aug 18, 2020 7:29 pm
RocketShipTech wrote: Tue Aug 11, 2020 12:40 am
muffins14 wrote: Mon Aug 10, 2020 11:35 pm Could you elaborate on how one can deduct margin interest when you itemize deductions? Does it require also having a mortgage and doing some accounting wizardry?
Schwab explains it well:

https://www.schwab.com/resource-center/ ... deductible

For me the 1.1% rate is actually 0.6% after tax.
"Investment interest expense is the interest paid on money borrowed to purchase taxable investments. This includes margin loans for buying stock in your brokerage account."

I've always read this to mean that you can deduct your margin loan insofar as you use the proceeds to purchase taxable investments. If you use it to pay for a vehicle or a remodel on your home, that wouldn't be a taxable investment.
You can use the margin loan to buy taxable investments and then redirect other money that would have otherwise gone into taxable investments to a vehicle or home remodel.

In this particular case, money is not fungible
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by whodidntante »

SlowMovingInvestor wrote: Tue Aug 18, 2020 5:47 pm Pretty good bonus from Citi Wealth Management

https://www.doctorofcredit.com/citi-wea ... 500-bonus/


$500 for $50K transfer looks like the sweet spot. And you only have to keep it there 3-4 months (not completely clear).

Apparently you can do a self directed account too, but the process is cumbersome.

If it were someone other than Citi, I'd be tempted but I know nothing about their wealth management or brokerage.
For those who are not familiar with Citi, start by assuming you are dealing with the worst bank on the planet. Then you'll find your interactions with them easy to understand. :happy

It's a good offer. I like money. I'll let the data points hatch for a bit, and then take the challenge.
SlowMovingInvestor
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by SlowMovingInvestor »

whodidntante wrote: Tue Aug 18, 2020 7:48 pm
SlowMovingInvestor wrote: Tue Aug 18, 2020 5:47 pm Pretty good bonus from Citi Wealth Management

https://www.doctorofcredit.com/citi-wea ... 500-bonus/


$500 for $50K transfer looks like the sweet spot. And you only have to keep it there 3-4 months (not completely clear).

Apparently you can do a self directed account too, but the process is cumbersome.

If it were someone other than Citi, I'd be tempted but I know nothing about their wealth management or brokerage.
For those who are not familiar with Citi, start by assuming you are dealing with the worst bank on the planet. Then you'll find your interactions with them easy to understand. :happy

It's a good offer. I like money. I'll let the data points hatch for a bit, and then take the challenge.
Well there is the possibility that Citi could deposit $900 million by mistake in your bank account, as they did to Revlon.

I'm a little concerned about whether one can really signup for wealth management, and then deposit money in a self managed account (I prefer an IRA), so like you, I'll let someone else be the guinea pig :happy
sc9182
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by sc9182 »

BuddyJet wrote: Tue Aug 18, 2020 7:26 pm
SlowMovingInvestor wrote: Tue Aug 18, 2020 6:02 pm
BuddyJet wrote: Tue Aug 18, 2020 5:55 pm Citi brokerage website is OK. Not great, not bad, basically workable.

Easiest approach is to transfer in required securities, hold for required period and transfer out. They do charge $75 for complete transfers out.
Thanks ! Do they support ACATS transfers ?

Do you have any experience with their 'Wealth Management' group ?
They do support ACATS but I think I had to fax/mail in a paper form since I was doing a partial account transfer and not full.

No experience with “Wealth Management”. I was only there for the bonus.
Thanks "whodidntante" for this Citi bonus post/linkeroo.

CLARIFICATION: When you transfer-out after their retention period ("maintain funds Through" date in Citi lingo), only do partial transfer-out leaving some minimal balance/funds in that account, if you do FULL transfer-out, it will automatically close that account -- thus strictly "ineligible" to receive the bonus into that 'now-closed' account. Better keep the account with minimal balance until bonus money is deposited or thru "Cash Bonus Credited to Account" date.

Do keep that account open thru their "Cash Bonus Credited to Account" date as posted.

Example: for accounts opened prior to Aug 31st, 2020, Funded before "10/31/20", then "maintain funds Through" 11/30/20 (note: you may chose to move most of the assets from this account, but do NOT do full transfer-out so as to prevent automatic account closure before bonus deposit date until final step) -- then the "Cash Bonus Credited to Account" date is: "March 1, 2021" (note: now you could close the account after the bonus deposit)

Again as REPEAT: Do NOT perform FULL transfer-out all assets upon meeting the 60-90 days "maintain funds Through" date., as this full transfer-out step automatically closes that account, ineligible for the Bonus to deposited into closed account! Do keep some assets (thus keeping the account open) through till "Cash Bonus Credited to Account" date (ie, partial transfer-out suggested)
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by Leesbro63 »

SlowMovingInvestor wrote: Wed Aug 19, 2020 7:43 am

I'm a little concerned about whether one can really signup for wealth management, and then deposit money in a self managed account (I prefer an IRA), so like you, I'll let someone else be the guinea pig :happy
+1. I'm watching this too.
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by arf30 »

whodidntante wrote: Tue Aug 11, 2020 3:53 pm Sure. There isn't much to know, however. You need a margin account with marginable securities. Then you simply make a withdrawal that exceeds the amount of cash you have. You can take it as a wire transfer, ACH, check, or you can spend money on the debit card they give you or use bill pay. What is it you need to know?
Does this mean I can transfer 800k in ETFs, withdraw 800k cash to buy a house in full and repay it at 1%? Instead of having to sell 150k of ETFs for a downpayment and mortgage the rest at 2-3%? Why isn't everyone doing this?
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by RocketShipTech »

arf30 wrote: Wed Aug 19, 2020 9:02 pm
whodidntante wrote: Tue Aug 11, 2020 3:53 pm Sure. There isn't much to know, however. You need a margin account with marginable securities. Then you simply make a withdrawal that exceeds the amount of cash you have. You can take it as a wire transfer, ACH, check, or you can spend money on the debit card they give you or use bill pay. What is it you need to know?
Does this mean I can transfer 800k in ETFs, withdraw 800k cash to buy a house in full and repay it at 1%? Instead of having to sell 150k of ETFs for a downpayment and mortgage the rest at 2-3%? Why isn't everyone doing this?
1. The 1% is floating. It’s 1% now but may turn higher at any point. On the other hand one can argue that floating interest rates are more Bogleheadish than fixed rates, which time the market.

2. Not everyone has sufficient assets to put up as collateral for the margin loan.

3. The margin loan is not tax deductible unless you use it to buy taxable securities. Now there is a way around this, you could use the margin loan to buy securities and then buy the house with another $800k you had laying around that you would have put into securities. In this particular case money is not fungible.

4. Some states like CA allow you to walk away from your underwater mortgage by turning in the keys. Not so with a margin loan.
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by whodidntante »

arf30 wrote: Wed Aug 19, 2020 9:02 pm
whodidntante wrote: Tue Aug 11, 2020 3:53 pm Sure. There isn't much to know, however. You need a margin account with marginable securities. Then you simply make a withdrawal that exceeds the amount of cash you have. You can take it as a wire transfer, ACH, check, or you can spend money on the debit card they give you or use bill pay. What is it you need to know?
Does this mean I can transfer 800k in ETFs, withdraw 800k cash to buy a house in full and repay it at 1%? Instead of having to sell 150k of ETFs for a downpayment and mortgage the rest at 2-3%? Why isn't everyone doing this?
You probably can't withdraw 800k cash on 800k of securities.
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by arf30 »

whodidntante wrote: Wed Aug 19, 2020 9:22 pm
arf30 wrote: Wed Aug 19, 2020 9:02 pm
whodidntante wrote: Tue Aug 11, 2020 3:53 pm Sure. There isn't much to know, however. You need a margin account with marginable securities. Then you simply make a withdrawal that exceeds the amount of cash you have. You can take it as a wire transfer, ACH, check, or you can spend money on the debit card they give you or use bill pay. What is it you need to know?
Does this mean I can transfer 800k in ETFs, withdraw 800k cash to buy a house in full and repay it at 1%? Instead of having to sell 150k of ETFs for a downpayment and mortgage the rest at 2-3%? Why isn't everyone doing this?
You probably can't withdraw 800k cash on 800k of securities.
Yup, that makes sense now.
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by Steve Reading »

RocketShipTech wrote: Wed Aug 19, 2020 9:08 pm 3. The margin loan is not tax deductible unless you use it to buy taxable securities. Now there is a way around this, you could use the margin loan to buy securities and then buy the house with another $800k you had laying around that you would have put into securities. In this particular case money is not fungible.
I can bring 200K in equity to IBKR, then withdraw 100K in cash and keep it a Bank of America for 1 year. The interest on the 100K margin loan for that year is tax-deductible AFAIK.

It looks to me like you're saying that's not the case?
arf30 wrote: Wed Aug 19, 2020 9:02 pm
whodidntante wrote: Tue Aug 11, 2020 3:53 pm Sure. There isn't much to know, however. You need a margin account with marginable securities. Then you simply make a withdrawal that exceeds the amount of cash you have. You can take it as a wire transfer, ACH, check, or you can spend money on the debit card they give you or use bill pay. What is it you need to know?
Does this mean I can transfer 800k in ETFs, withdraw 800k cash to buy a house in full and repay it at 1%? Instead of having to sell 150k of ETFs for a downpayment and mortgage the rest at 2-3%? Why isn't everyone doing this?
You can withdraw up to 400K.

I don't know why more people don't do it. The catch of course is that if your holdings drop enough, the broker can call back their loan. As long as you're being conservative with how much you borrow, it seems like an excellent alternative to a HELOC, auto loan, etc.
"... so high a present discounted value of wealth, it is only prudent for him to put more into common stocks compared to his present tangible wealth, borrowing if necessary" - Paul Samuelson
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Re: The Final, Definitive Thread on Brokerage Transfer Bonuses

Post by RocketShipTech »

Steve Reading wrote: Wed Aug 19, 2020 10:00 pm
RocketShipTech wrote: Wed Aug 19, 2020 9:08 pm 3. The margin loan is not tax deductible unless you use it to buy taxable securities. Now there is a way around this, you could use the margin loan to buy securities and then buy the house with another $800k you had laying around that you would have put into securities. In this particular case money is not fungible.
I can bring 200K in equity to IBKR, then withdraw 100K in cash and keep it a Bank of America for 1 year. The interest on the 100K margin loan for that year is tax-deductible AFAIK.

It looks to me like you're saying that's not the case?
Bank interest does count as taxable income, so you can deduct the margin interest paid to generate it (although borrowing at 1.1% to earn 0.1% is probably a bad idea for other more obvious reasons).

What you can’t do is use the $100k margin loan to pay down a mortgage balance (or buy a house free and clear) and then deduct the 1.1% margin interest.
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