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What is an allocation and how does it work?

When you’re using Margin Loan (Debit Money), your cash balance is negative, and standard interest of 5.90% is being charged.

By allocating an amount, you are basically announcing your intention to use that amount as Margin Loan (Debit Money) in the coming calendar month. This gives us time to prepare and plan accordingly. In return, you benefit from the reduced interest rate of 4.50%.

For a detailed overview of costs and charges, see our Fee Schedule.

Accordion

Log in to your account, go to the Settings page, and select Allocation. Note that these settings are only visible if your account has an Active, Trader, or Intraday profile. Once you’re in the Allocation page, select Add allocation. You can request allocations currency, EUR, GBP, and USD. Your allocation will start on the first day of the following calendar month.

You can see the allocation for the current calendar month under Current allocation. To remove an active allocation, use the pencil icon and set the amount to zero. You can also change the allocation in the same way by setting it to the desired amount. Adjustments will be seen under New allocation. The removal or change of the allocation will take effect on the first day of the following calendar month.

Important to know

  • Allocation is an ongoing service. Once you add or adjust an allocation, it will remain in place unless you remove it or change the amount to another value.
  • An allocation will be applicable for a minimum of a full calendar month. Adding, changing, or removing an allocation will take effect on the first day of the following calendar month.
  • The interest is always charged on the full amount allocated, whether it is used or not.
  • If in one calendar month, you end up using more Margin Loan (Debit Money) than you have allocated for that month, standard interest rate will be charged on the amount exceeding the allocation.
  • In case you have allocated more than we can currently lend you, you’ll be charged interest on the full amount you have allocated, even when you don’t currently have that amount of Margin Loan (Debit Money) at your disposal.
  • As merely a way of announcing your intention to use a certain amount of Margin Loan (Debit Money), allocating will not increase your cash balance nor grant you more margin. The actual margin available to you depends on factors such as value and composition of your portfolio. For details, consult our Investment Portfolio Risk Handbook.
  • When you allocate an amount in a foreign currency which you are handling through Auto FX, the allocated amount cannot be used until you enable Manual FX for this currency. Learn more about Currency conversion settings.
  • The existing Margin Loan (Debit Money) amount you have in a foreign currency cash account will be converted to the account default currency once you activate Auto FX. Your allocation in a foreign currency will stay in place, so you might need to adjust it manually.

Investování s sebou nese riziko.

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