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Fully Paid Lending Income Program

Earn passive income on stocks you already own

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With the Fully Paid Lending Income Program, you can lend your securities to TD Ameritrade each month to potentially earn additional income.  There is no added cost to participate and risk is mitigated because the loan is backed by 102% cash collateral.

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Potential benefits of the program

  • Additional monthly income potential
  • No action required after successful enrollment*
  • No additional cost to participate
  • Maintain ownership of your shares
  • Opt out of the program at any time
  • Loans are back backed by 102% of cash collateral held at a 3rd party bank, aimed at reducing risk
  • Easily keep tabs on earnings in your account with statements

Important considerations

It’s important to note that there are risks of Fully Paid Lending Income

  • Typical Investment Risk: All inherent investment risks apply and share performance is subject to market fluctuation.
  • SIPC: The SIPC doesn’t cover shares on loans, which are secured by 102% collateral provided by TD Ameritrade and held at a third party bank. You can withdraw on this collateral in the unlikely event of a default in which TD Ameritrade does not return borrowed securities.
  • Tax Implications: After you lend out a dividend-paying security, you’ll receive cash-in-lieu of your regular dividend payment. It’s important to remember that dividend income is taxed at a different rate.
  • Waived Voting Rights: Your shares will be lent out and you will temporarily forfeit your voting rights to the borrower. However, if you’d like to reclaim them before the record date, it’s easy to regain your voting privileges.
  • Market Dictates Demand: Whether or not your securities are borrowed depends on their volume and lending market demand. Interest rates and demand will vary by security over time

How Fully Paid Lending Income works

When you successfully enroll* in the program, we’ll manage the lending process automatically and you’ll receive interest based on the demand for your securities in the lending market —with large positions in unique equities often in highest demand. Plus, you'll retain full ownership of your investments, which means your earnings will continue to perform based on market conditions.

Here’s an example of how the interest adds up

Shares on loan

Market price

10,000

$10


Market value

Annualized lending interest rate**

Daily accrual
$100,000 x 8.50% / 360 days

$100,000

8.50%

$23.61


Your hypothetical monthly income
$23.61 x 30 days / month

$708.30

For illustrative purposes only. Past performance is not a guarantee of future results.

Frequently Asked Questions

Get answers to commonly asked questions about the Fully Paid Lending Income Program.

What is the Fully Paid Lending Income Program?

Who is eligible for the Fully Paid Lending Income Program?

How do I enroll in the program?

What is needed to enroll in the Fully Paid Lending Income Program?

Will I pay any fees to participate in the program?

How do I earn income?

Where can I review my loan activity and accrual?

What securities will be loaned out?

How will securities be chosen for loans?

How are lending rates determined?

Can I still buy/sell the security while it is out on loan?

Where will the collateral be held?

How do I opt out/unenroll from the Fully Paid Lending Income Program?

What risks are involved in the Fully Paid Lending Income Program?

How will dividends be handled within the Fully Paid Lending Income Program?

Will I continue to have voting rights for shares on loan?

How will SIPC coverage be impacted?

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Have a question that wasn’t answered in our FAQ?

Please reach out to our experienced trader services team by email at clientservices@tdameritrade.com.

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