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Narrator: The Funds Available and Margins Details account information on Schwab.com can help clients with margin accounts know how much they have available to place trades or withdraw from their accounts.
So, let's talk about what those numbers mean. To get there, starting on the Accounts tab, select Balances.
First, select the account you want to see balance details for. Within the Balance Details section, we're going to focus on two sections relevant to trading: Funds Available and Margin Details & Buying Power. Note that if you have an account that is not margin enabled, you may not have all these sections.
Looking at Funds Available, there are sections called To Trade and To Withdraw. Starting under To Trade, there's Cash & Cash Investments, which also appears a few other places on the page. Cash & Cash Investments under the To Trade section is the available cash that you can use without borrowing on margin.
Next, there's Settled Funds.
Settled Funds is cash from either deposits or from the sale of securities that have been fully paid for and have reached the settlement date for that sale.
Then there's Available to Day Trade. This only appears in margin accounts and is only used by accounts designated as day trader. The value listed is the maximum dollar amount of fully marginable securities that can be held intraday and includes funds swept into interest-bearing features of your Schwab account, like the Bank Sweep feature.
Second from the bottom is Cash + Borrowing. If you're going to trade on margin, this tells you the maximum market value you can purchase. Finally, there's SMA, or Special Memorandum Account. SMA balances are used in calculating the amount of funds that may be withdrawn from the account or applied to new margin transactions.
Looking now at the To Withdraw section, the Cash & Cash Investments is the amount of cash available to withdraw from the account. Keep in mind, this isn't always the same as Cash & Cash Investments in the To Trade section. For example, cash from recent deposits may show up as available to trade but may not be available to withdraw until after an initial hold period.
Next is Borrowing.
If you have $2,000 or more in marginable securities equity, you can use the amount above $2,000 as collateral to borrow or to withdraw. For those purposes, think of $2,000 as the baseline.
It's good to know that you'll be charged interest on any amount that you withdraw that exceeds the available cash in the account.
Next is Cash + Borrowing. This is the total amount you can withdraw from your account. Finally, Cash on Hold refers to margin interest and recent deposit holds in the account and is therefore not available to be withdrawn or used in new trades.
Continuing down to Margin Details & Buying Power, this section starts with Balance Subject to Interest, which is your prior day's settled margin loan amount that's subject to interest. Keep in mind that if you sell securities to cover a margin loan, you'll continue to see a balance until the day after the sale settles.
Month to Date Interest Owed shows how much interest you owe on funds you've borrowed. At Schwab, margin interest is accrued daily and charged monthly, so that balance potentially updates every day.
Margin Equity represents the value of marginable securities plus any margin cash or minus any margin loans.
Equity Percent is your margin equity divided by the market value of your long marginable securities plus the market value of any short positions. Note that non-marginable securities do not count toward margin equity but counts toward account value.
On this page, there's also a link to margin buying power. Select Margin Buying Power, and it'll show you exactly what your buying power is for a number of different security types in your account.
Also, on that page, you have a link to Margin Rates. Select it to see the current margin rates that Schwab charges for margin borrowing. Rates vary depending on the size of the debit balance.
That's it. Understanding the numbers on the Funds Available and Margin Details sections of the Balances page can help you manage your investments and trades more effectively.