Methodology for Determining Credit Interest Rates

The credit interest rates are determined using a two-step process.

For Accounts with a Net Asset Value ≥ 100,000 USD (or equivalent) the NAV factor is 1.

For Accounts with a Net Asset Value < 100,000 USD (or equivalent) the NAV factor is = NAV in USD/100,000 USD

For currencies where IBKR may apply an effective negative rate to long balances the NAV factor is 1.

For each tier outlined in the table on this page the NAV adjusted rate must be determined.

For currencies where IBKR may apply an effective negative rate to long balances the rates are calculated as follow:

NAV adjusted credit rate = NAV factor x (BM-IBKR Spread)

For the other currencies the NAV adjusted rate is calculated as follows:

NAV adjusted credit rate = Max(NAV factor x Max((BM-IBKR Spread);0%) – LYNX Markdown;0%)

Example 1:

Assumptions:

Calculation:

NAV = USD 100,000. For Accounts with a Net Asset Value >= 100,000 USD (or equivalent) the NAV factor is 1.

NAV factor = 1

	Cash (USD)	NAV adjusted IBKR Rate per annum	NAV adjusted LYNX Rate per annum
Up to Tier Cutoff	10,000	0.00%	0.00%
Above the Tier Cutoff	90,000	4.83% = 1 x Max((5.33%-0.5%);0%) = NAV factor x Max((BM-IBKR Spread);0%)	2.83% = Max(4.83% – 2%;0%) = Max(NAV adjusted IBKR rate – LYNX Markdown;0%)

There will be no interest paid on the first USD 10,000 of cash.

Example 2:

Assumptions:

Calculation:

NAV = USD 50,000. For Accounts with a Net Asset Value < 100,000 USD (or equivalent) the NAV factor is = NAV in USD/100,000 USD

NAV factor = USD 50,000/USD 100,000 = 0.5

	Cash (USD)	NAV adjusted IBKR Rate per annum	NAV adjusted LYNX Rate per annum
Up to Tier Cutoff	10,000	0.00%	0.00%
Above the Tier Cutoff	90,000	2.415% = 0.5 x Max((5.33%-0.5%);0%) = NAV factor x Max((BM-IBKR Spread);0%)	0.415% = Max(2.415% – 2%;0%) = Max(NAV adjusted IBKR rate – LYNX Markdown;0%)

There will be no interest paid on the first USD 10,000 of cash.