Also, it should be noted that Gold is a flat fee based on account value brackets and margin brackets not a percent fee of your margin like every other brokerage. That means your effective margin rate can be much higher. e.g. if you borrow $100 for a $2000 account, you're looking at an effective margin rate of 72%.
[1] https://d2ue93q3u507c2.cloudfront.net/assets/robinhood/legal... (linked to from their FAQ[2], sorry for the sketch URL)
[2] https://support.robinhood.com/hc/en-us/articles/214681823-In...
Is that from Robin Hood? If so it's a travesty specific to them. You can borrow from Interactive Brokers for 2.4%, which is a lot easier to overcome even with straight broad-market ETFs. [0]
[0] https://www.interactivebrokers.com/en/index.php?f=interest&p...
>IB accrues interest on a daily basis and posts actual interest monthly on the third business day of the following month.
from investopedia
>Interest accrues on loans, such as a mortgage, or on savings accounts and investments. Daily accrual means interest amounts are added to the account balance every day. Interest can accrue on any time schedule; common periods include daily, monthly and annually
it would be different if the rates were annual percentage rates, but your site doesn't specify that.
no I don't know anything about finance but I got google.
You found the right terms but totally missed the meaning. Daily accrual means that your interest for that day is calculated daily. It doesn't mean the interest rate is 2.4% a day.
Did you even think about this logically? 2.4% a day would be 876% a year. That's obviously insane.
This makes it easier to compare loans even if they have different terms. The fine print will usually provide the daily interest rate, for example 2.00% APR is 2/365 = 0.005479% per day interest.
Often interest is compounded continuously in which case calculus can be used to compute the exact interest, but it ends up as a famous formula in investing, FV = PV * e^(R*T). In practice, it ends up being very close to daily compounding, but it allows banks to advertise an ever-so-slightly higher APY (annual percentage yield) which is why everybody does it this way for interest paid on deposit accounts.
https://www.scottrade.com/investment-products/interest-margi...
https://www.fidelity.com/trading/advanced-trading-tools/marg...
I just looked up margin interest rates, for loans of 10 000 or less (which is what we are likely talking about with robin hood) the interest rate is Base Rate + 1.25% which is 8.50% interest. I don't know many stocks you can buy even in the best of circumstances that will get you a guaranteed return of more than 8.5%. Moral of the story - robin hoods retail investors should not engage in margin trading.