I have a cash account at IB. Recently I send CHF to IB, exchanged to USD and then exchanged to EUR. Then I wanted to send that EUR back to my bank account, but as it appears, the amount available is 0.00 EUR. I guess that’s because the fx trade is not yet settled, right?
So I decided to switch to margin account. I checked the page with interest rates and it says 2.92% for USD and 1.50% for EUR.
For those of you having the margin account at IB:
- have you ever been charged any interest?
- how is it calculated, on daily basis? Is it also charged on daily basis? I would not like to find a huge bill end of month because I made a mistake
- what is the basis of the loan? the settled currency on the account?
- if I want to withdraw unsettled EUR, will they charge me interest in EUR? I want to avoid a situation where I would have a -0.10 EUR balance on my account and then would have trouble to bring it back to zero
- what should I be careful about when having a margin account, are there any risks or downsides?
- any other case where margin account would be useful, other than described here?
I do not indend to trade on margin, just want to be able to transfer money faster. By the way, for the part of converted USDs I bought some ETFs, and it worked instantly, with a cash account. I really don’t understand how it works. Why does IB allow me to buy using unsettled currency but does not allow to withdraw it?