Margin Trading Facility (MTF) lets you buy more stock than your cash allows: you put up part of the purchase (your margin), the broker funds the rest, you take actual delivery of the shares, and those shares sit pledged with the broker as collateral. You pay daily interest on the borrowed portion until you sell or repay. Unlike intraday, where you must square off the same day, an MTF position can be held for weeks or months — for as long as you keep the margin topped up and keep paying the interest.
The interest rate is the number that decides whether MTF is a tool or a slow leak. And it is the number brokers work hardest to blur. Almost every "MTF from 5.99%", "from 7.99%", or "9.69% p.a." banner is a teaser — it applies only to the smallest borrowing slab (usually your first Rs 1 lakh), or only if you buy the broker's most expensive paid plan. Cross that line, or use the default plan, and the rate on the rest of your borrowing jumps to 12.49% – 18% a year, and sometimes higher.
This post lays out the actual per-broker slabs — grouped by broker type, with a master at-a-glance table — so you can see exactly what you would pay on a real position. It also covers the SEBI rules that govern MTF (the initial margin is not a flat 50%, contrary to what most explainers say), how the interest is computed day by day, the full cost stack beyond interest, the tax treatment, and the risks that make this a facility for experienced investors only.
Everything here is time-sensitive. All broker rates are as of 13 August 2026 and change frequently — several changed in the weeks before this was written. Always confirm the live number on the broker's own page before you act. Rates listed as "not independently verified" should be treated as leads to check, not facts to rely on.
The teaser trap, in one paragraph
Here is the whole game. A broker advertises "MTF from 5.99%". That 5.99% is the rate on the first Rs 1 lakh you borrow — and only there. Borrow Rs 3 lakh and the top Rs 2 lakh is charged at the next band, often around 14.6%. Your blended rate lands near 11–12%, not 5.99%. Other brokers instead reserve the low rate for a paid subscription plan (Kotak Neo's and ICICIdirect's ~9.69% are top-plan rates; the default is 17.99%). And a few, like Fyers, invert the whole thing — the rate drops as you borrow more, so the cheap number is for large books, not small ones. The advertised rate and the rate you pay are almost never the same. The rest of this post is the detail behind that sentence.
How MTF works: the SEBI framework
MTF is not a broker invention you take on trust — it runs inside a defined SEBI framework, laid out in the SEBI Master Circular for Stock Brokers and the exchanges' risk-management rules. Understanding the guardrails tells you what the broker can and cannot do to your position.
Eligible securities: Group I only
Only equity shares and equity ETF units classified as "Group I" are eligible for MTF. Group I is the exchange's classification for the most liquid, lowest-risk scrips — broadly, securities that trade on at least 80% of trading days with an impact cost of 1% or less. Illiquid stocks, penny stocks, and anything outside Group I cannot be bought on margin.
One nuance worth stating honestly: the lookback window for that liquidity test has been revised over the years. SEBI's original 2004 margin-trading wording referenced an 18-month history; the current Comprehensive Risk Management framework (updated October 2023) uses a rolling six-month assessment. The practical point is the same either way — MTF eligibility tracks the exchange's Group I liquidity criteria, and if a stock falls out of Group I, its MTF eligibility is affected. Brokers publish their own list of MTF-approved scrips (each broker's list is a subset of Group I), and it is updated periodically. Check the current list before assuming a stock is fundable.
Initial margin: it is NOT a flat 50%
This is the single most-repeated error in MTF explainers, so read it carefully.
The regulatory initial margin for an MTF position is not a flat 50%. It is risk-based and scrip-specific, driven by the cash-segment VaR (Value at Risk) and ELM (Extreme Loss Margin) of the individual stock. Per the framework set out in the SEBI Master Circular (the structure summarised in Table 10 of the June 2026 consultation paper on the MTF review):
| Security type | Applicable initial margin |
|---|---|
| Group I stocks available in the F&O segment | VaR + 3 × ELM |
| Group I stocks not in F&O, and equity ETF units | VaR + 5 × ELM |
Here VaR and ELM are the cash-segment values for that specific stock. So a liquid, F&O-eligible large cap carries a lower margin than a Group-I mid cap that is not in F&O. The effective margin varies by scrip and by day, and for many non-F&O names it lands well above 50% once you add VaR and five times ELM.
Where does "50%" come from, then? It is a separate rule about the composition of collateral, not the entry margin — broadly, the requirement around how much of the maintained margin must be in cash or cash-equivalent form versus pledged securities. It is not the amount you must put down to open the trade. Conflating the two is what produces the "MTF needs 50% margin" myth.
(A note on the 5× figure: the multiplier applies within the current "funded-stock-as-margin" structure formalised in SEBI's September 2024 changes, and is presented here as the framework described in the June 2026 consultation Table 10. Because the framework is under active review — see below — treat the exact multiplier as current-as-of-writing rather than permanent.)
Pledge, mark-to-market, margin call, square-off
Once the trade settles, a strict custody-and-risk cycle kicks in:
- The funded shares are pledged. The stock you bought on margin is pledged in the broker's favour via CDSL/NSDL and held identifiable and free of co-mingling — your MTF stock cannot be pooled indistinguishably with other clients' or the broker's own holdings.
- Marked to market daily. The pledged position is revalued every trading day against the current price.
- Margin call on a shortfall. If the value falls and your maintained margin drops below the required level, the broker issues a margin call asking you to add funds or securities.
- Liquidation strictly per the RODoc. If you do not meet the call, the broker can square off (forced-sell) the pledged shares — but only in the manner set out in the Rights and Obligations Document (RODoc) you signed, the terms of which are mandated by the SEBI Master Circular (Section 39). The RODoc governs when and how liquidation happens; it is not at the broker's arbitrary whim.
The SEBI June 2026 consultation (proposed, not final)
In June 2026, SEBI floated a consultation paper reviewing the MTF framework. As of writing it is a proposal, not a rule — none of the following is in force yet:
- Raising the minimum broker net worth to offer MTF from Rs 3 crore to Rs 5 crore.
- Allowing brokers to fund MTF via NCDs (non-convertible debentures) as a funding source.
- Expanding the eligible collateral that can be used to maintain MTF margin.
Watch for the final circular before assuming any of this applies. Until then, the framework in the sections above is what governs your position.
How the interest is computed
The interest mechanics are consistent across brokers, and they are simpler than the marketing makes them look.
-
Charged only on the funded (borrowed) amount. The base is the money the broker actually lent you — that is trade value minus your own margin — not the full purchase value, and never on your own contribution.
-
Accrues every calendar day, including weekends and holidays. Interest runs from T+1 (the day after the exchange pay-in, when delivery settles) until the position is squared off or sold. Saturdays, Sundays, and market holidays all accrue — the loan does not take weekends off.
-
Simple interest, typically debited monthly. The formula is:
Interest = Funded Amount × Annual Rate × Days ÷ 365"Debited monthly" means the month's accumulated simple interest is posted to your ledger together — it does not mean monthly compounding. (Some brokers post it weekly; the accrual is still daily and simple.)
Worked examples
Example 1 — Rs 80,000 funded at 18% p.a. for 30 days:
- 80,000 × 18% × 30 ÷ 365 = Rs 1,183 for the month.
Example 2 — Rs 1,00,000 funded at 12% p.a. for 90 days:
- Daily interest = 1,00,000 × 12% ÷ 365 = Rs 32.88/day
- 90 days = 32.88 × 90 = Rs 2,959 total (about Rs 986/month, no compounding).
Example 3 — Rs 2,00,000 funded at 14.6% p.a. for 1 year:
- 2,00,000 × 14.6% = Rs 29,200 for the year (about Rs 80/day).
The takeaway from Example 3: at a mid-band rate, your stock has to rise roughly 15% in a year just to cover the interest on the borrowed portion — before any brokerage, pledge, or statutory charges. That is the hurdle every MTF thesis has to clear.
Per-broker slab rates
Rates below are annual (p.a.), charged daily on the borrowed amount, as of 13 August 2026. Read the band carefully — the cheap rate almost always applies only to a small first slab or a paid plan. Brokers are grouped by the shape of their pricing.
Group A — flat-rate discount brokers
No slabs, no volume games. One rate on every rupee borrowed.
Zerodha — flat 0.04%/day = 14.6% p.a.
Zerodha's MTF interest is a flat 0.04% per day, which annualises to exactly 14.6% p.a. on the funded amount. There is no slab, no volume discount, and no teaser — you pay the same rate whether you borrow Rs 10,000 or Rs 10 lakh. It is one of the most transparent structures in the market.
| Item | Charge |
|---|---|
| Interest | 0.04%/day = 14.6% p.a. (flat, on funded amount) |
| MTF brokerage | Lower of 0.3% or Rs 20 per executed order |
| Pledge / unpledge | Rs 15 + GST per ISIN |
| Square-off charge | Rs 50 + GST per position |
| Auto square-off trigger | If losses exceed 20% of the funded amount (hard cut around the 80% level) |
That last line matters: Zerodha will auto square-off your position once mark-to- market losses eat through more than 20% of the funded amount — a hard risk cut you should size positions around.
Angel One — 0.041%/day = 14.99% p.a.
Angel One charges 0.041% per day, annualising to 14.99% p.a. on the funded amount, with leverage of up to 4x. Like Zerodha, it is a flat structure — the rate does not step down with volume.
Group B — tiered / teaser brokers
These publish a ladder of slabs. Whether the ladder helps you depends entirely on its direction — some rise with borrowing (small positions cheap), some fall (large positions cheap), and one puts a tiny teaser on the first lakh.
Pocketful — headline "5.99%" (rising ladder, non-incremental)
Pocketful markets itself on "Lowest MTF Charges" and a 5.99% teaser. The ladder rises, and — importantly — the slabs are non-incremental: the whole funded amount is charged at the band its total falls into, not sliced across bands.
| Borrowing band | Annual rate | Daily rate |
|---|---|---|
| Up to Rs 1,00,000 | 5.99% | 0.0164% |
| Rs 1,00,001 – Rs 25,00,000 | 14.60% | 0.0400% |
| Above Rs 25,00,000 | 16.00% | 0.0438% |
- Max leverage: up to 5x on a wide list of stocks.
- The trap, spelled out: 5.99% applies only if your total borrowing stays under Rs 1 lakh. Borrow Rs 1,00,001 and the entire amount is charged at 14.60% — about 2.4x the headline. Above Rs 25 lakh, the whole book is at 16.00%. Because the bands are non-incremental, crossing a threshold re-prices everything, not just the excess.
Fyers — tiered but INVERTED (rate drops as you borrow more)
Fyers is the mirror image of a teaser. Its rate falls as the borrowed amount rises — so the cheap number is for large books, not small ones. This structure took effect 2 June 2025, replacing a prior flat 18%.
| Borrowing band | Annual rate |
|---|---|
| Up to Rs 1,000 | 0% |
| Rs 1,000 – Rs 1,00,000 | 16.49% |
| Rs 1,00,000 – Rs 10,00,000 | 15.49% |
| Rs 10,00,000 – Rs 25,00,000 | 14.49% |
| Above Rs 25,00,000 | 12.49% |
- The shape, spelled out: the most expensive Fyers band is the small one (16.49% for the first lakh above Rs 1,000). A large borrower crossing Rs 25 lakh pays 12.49% — one of the lower large-book rates here. Fyers rewards scale, not small positions.
Dhan — headline "12.49%" (rising ladder, honest shape)
Dhan's ladder rises with the amount borrowed — the honest shape — so the lowest rate is the best case for the first Rs 5 lakh, not a Rs-1-lakh teaser.
| Borrowing band | Annual rate | Daily rate |
|---|---|---|
| Up to Rs 500 | Nil | 0% |
| Rs 500 – Rs 5,00,000 | 12.49% | 0.0342% |
| Rs 5,00,000 – Rs 10,00,000 | 13.49% | 0.0369% |
| Rs 10,00,000 – Rs 25,00,000 | 14.49% | 0.0397% |
| Rs 25,00,000 – Rs 50,00,000 | 15.49% | 0.0425% |
- Note on the top tier: Dhan's own published table stops at Rs 50 lakh. Secondary coverage reports an "above Rs 50 lakh = ~16.49%" sixth band, but since it is not in Dhan's own table, treat it as unconfirmed — confirm on Dhan's site if you borrow that much.
Group C — full-service & bank-backed brokers
Higher headline rates, softened by paid-plan discounts and bundled research, banking, and relationship support. The pattern is consistent: high default, low only if you pay for a premium plan — and the low number is the one they advertise.
ICICIdirect — default 17.99%, paid-plan teaser ~9.69%
ICICIdirect revised its MTF rates effective 21 August 2026. Its interest is charged on the funded amount plus any Shares-as-Margin (SAM), daily including weekends.
| Plan | Old rate | New rate (eff. 21 Aug 2026) |
|---|---|---|
| Prime (Rs 9,999) | 9.85% | 9.69% |
| Prime (Rs 4,999) | 9.85% | 10.99% |
| Prime (Rs 999) | — | 17.99% (unchanged) |
| Default plan | — | 17.99% (unchanged) |
- The teaser, spelled out: the ~9.69% is achievable only on the Rs 9,999 Prime plan. The default plan pays 17.99% — so the "as low as 9.69%" headline is a paid-plan floor, not the standard rate.
Kotak Neo — headline 9.69% p.a. under Trade Free Pro (paid-plan teaser)
Kotak Neo advertises a 9.69% p.a. headline available under its Trade Free Pro plan. Other plans are higher (for example around 14.99%). Leverage runs up to 4x (roughly 25% investor / 75% funded), and interest is charged daily on the funded amount only. As with ICICIdirect, the 9.69% is a paid-plan floor — confirm which plan you are on.
HDFC Securities — BSPL "Buy Stocks Pay Later" ~18% p.a. (up to 24%)
HDFC Securities offers MTF as BSPL ("Buy Stocks Pay Later"), charging roughly 0.05% per day, annualising to ~18% p.a. on the outstanding amount, and up to 24% p.a. where applicable. Leverage runs up to 4x. (Separately, HDFC Sky's related product is priced around 1% per month = ~12% p.a. — a different structure under the same group, so check which one you are using.)
Brokers not independently verified this pass
The following brokers offer MTF, but their current rates were not independently verified in this research pass. Confirm on each broker's official page — do not rely on the figures below without checking:
- Paytm Money — earlier research indicated a 7.99% teaser on the first Rs 1 lakh, with higher bands above. Not verified this pass.
- Groww, Upstox, 5paisa, m.Stock (Mirae Asset), Alice Blue, Sharekhan, Motilal Oswal, SBI Securities, Axis Direct, IIFL, Nuvama — all offer MTF; current rates not independently verified here.
At a glance: master comparison
All rates as of 13 August 2026; verify before acting. "True rate for Rs 1–5L" is the rate a typical retail borrower actually pays on a meaningful position (i.e. after the teaser slab).
| Broker | Lowest rate (and its band/condition) | True rate for Rs 1–5L funded | Max leverage | Notes |
|---|---|---|---|---|
| Zerodha | 14.6% (flat, all amounts) | 14.6% | ~4x | Flat, no slab, fully transparent. Auto square-off at 20% funded-loss. |
| Angel One | 14.99% (flat, all amounts) | 14.99% | 4x | Flat structure, no volume discount. |
| Pocketful | 5.99% (only ≤ Rs 1L) | 14.60% | 5x | Steep teaser; non-incremental slabs re-price the whole book. |
| Fyers | 12.49% (only > Rs 25L) | 15.49% | — | Inverted ladder — cheap for large books, dear for small. Eff. Jun 2025. |
| Dhan | 12.49% (Rs 500 – 5L) | 12.49% | up to 4x | Honest rising ladder; Nil under Rs 500. Table stops at Rs 50L. |
| ICICIdirect | 9.69% (Rs 9,999 Prime plan only) | 17.99% (default) | — | Paid-plan floor; default is 17.99%. Eff. 21 Aug 2026. |
| Kotak Neo | 9.69% (Trade Free Pro plan only) | ~14.99% (other plans) | up to 4x | Paid-plan teaser; interest on funded only. |
| HDFC Securities | ~18% (flat outstanding) | ~18% (up to 24%) | up to 4x | BSPL product. HDFC Sky variant ~12% p.a. |
The pattern is unmistakable. For a normal retail position of Rs 1–5 lakh borrowed, the cheapest confirmed rate here is Dhan's 12.49%, followed by Zerodha's flat 14.6%. The 5.99% and 9.69% headlines belong to bands or paid plans that almost no ordinary retail trader will actually use.
The full cost stack beyond interest
Interest is the biggest cost, but not the only one. Some charges are broker-set (they vary, and can be negotiated or shopped) and some are statutory (government/exchange-mandated, the same everywhere, unwaivable).
| Charge | Type | Rough level | Notes |
|---|---|---|---|
| MTF interest | Broker-set | 12.49% – ~18%+ p.a. | The dominant cost on any multi-week hold. |
| MTF brokerage | Broker-set | e.g. Zerodha lower of 0.3% or Rs 20/order | Some free-delivery brokers charge little; this can tilt "cheapest". |
| Pledge / unpledge | Broker-set (CDSL/NSDL) | ~Rs 15–20 + GST per scrip per request | Charged per pledge event; adds up across many positions. |
| DP charges on sell | Broker-set | Per-scrip fee on delivery sell | Applies when you sell the delivered shares. |
| Square-off charge | Broker-set | e.g. Zerodha Rs 50 + GST | On broker-initiated liquidation. |
| STT | Statutory | On delivery buy & sell | Securities Transaction Tax — unwaivable. |
| Stamp duty | Statutory | On purchase | State-set — unwaivable. |
| Exchange transaction charges | Statutory | NSE/BSE per turnover | Unwaivable. |
| SEBI turnover fee | Statutory | Tiny per-turnover levy | Unwaivable. |
| GST | Statutory | 18% on brokerage + charges | Not on STT/stamp; unwaivable. |
The broker-set rows are where you shop and negotiate. The statutory rows are the same at every broker — no one can waive STT, stamp duty, exchange charges, the SEBI fee, or the 18% GST on brokerage.
Worked total-cost example: Rs 2 lakh MTF hold for 1 year
Borrow Rs 2,00,000 via MTF and hold for a full year at a 12.49% rate (Dhan's first band — a realistic best-case retail rate):
- Interest: 2,00,000 × 12.49% = Rs 24,980 for the year (~Rs 68/day).
- MTF brokerage: on entry and exit of, say, a ~Rs 4 lakh total trade value, roughly Rs 400 + GST at 0.1% — or near zero on a free-delivery broker.
- Pledge/unpledge: ~Rs 15–20 + GST per scrip per event — a few tens of rupees.
- DP on sell + statutory (STT, stamp, exchange, SEBI, GST): a few hundred rupees depending on scrips and trade value.
All-in, you are handing over roughly Rs 25,500 – Rs 26,000 for the year on a Rs 2 lakh borrowing. The stock has to rise more than ~13% in the year just to break even — and that is at one of the cheapest confirmed rates. At Zerodha's 14.6% or a full-service default 17.99%, the break-even hurdle is materially higher (~15% and ~18% respectively, before other costs).
Which is genuinely cheapest — and the slab trick
Honest answer: it depends on how much you borrow and how the ladder is shaped.
- The sub-Rs-1-lakh teaser trick is real but narrow. Pocketful's 5.99% (or Paytm's rumoured 7.99%) only holds if your total borrowing stays under Rs 1 lakh — and only because those slabs are non-incremental, so a small book gets the whole thing at the low rate. Push past Rs 1 lakh and the entire amount re-prices to the higher band. Some traders split positions across brokers to keep each book under its cheap slab, but that means multiple accounts, multiple pledge fees, and real hassle for a small position. Rarely worth it.
- Fyers is inverted — it is the exception. If you borrow large (above Rs 25 lakh), Fyers' 12.49% is genuinely one of the cheaper large-book rates. The "slab trick" runs backwards here: scale down and you pay more, not less.
- For a normal Rs 1–5 lakh position, Dhan's 12.49% is the cheapest confirmed rate, with Zerodha's flat, transparent 14.6% next. Both beat the full-service default of 17.99%.
- A paid plan can win if you borrow a lot and trade often. ICICIdirect's or Kotak Neo's ~9.69% can beat any discount broker's rate — but only after you have paid the annual plan fee (Rs 9,999 in ICICIdirect's case) and only if your borrowing is large enough that the interest saving exceeds the fee.
- Free/low delivery brokerage matters on big trade values. A broker slightly costlier on interest but free on brokerage can end up cheaper on a short hold.
There is no single "cheapest MTF broker" — only the cheapest broker for your borrowing size and holding period. Match the slab shape to your actual position: small book → rising-ladder or flat broker; very large book → inverted (Fyers) or paid-plan broker.
Risks and a debt-first reality check
MTF is leverage, and leverage cuts both ways.
- Clearing high-cost debt beats any MTF play. If you are carrying a credit-card balance at ~40% a year, no MTF arbitrage — even at 9.69% — comes close. Borrowing at 12% to invest while paying 40% on a card is setting money on fire. Pay the card first. This is the single most important line in the post.
- Margin call and forced square-off. If the stock drops and your margin falls below the maintenance level, the broker issues a call; if you cannot top up, it forced-sells your pledged shares — often near the bottom, locking in the loss. Zerodha, for instance, auto squares off once losses exceed 20% of the funded amount (a hard cut near the 80% level).
- Interest accrues every calendar day regardless of price direction. A flat or falling stock plus daily interest is a guaranteed loss. You pay for weekends and holidays too.
- Leverage magnifies both directions. A 4x position turns a 10% stock move into a ~40% swing on your capital — great on the way up, ruinous on the way down.
- Interest "compounding" via monthly debit. While the accrual is simple interest, once the month's interest is debited to your ledger it becomes part of what you owe — so unpaid interest can itself start attracting funding costs if it pushes your account into a debit. Keep the ledger clear.
MTF is for experienced investors with a clear thesis, spare margin capacity, and the discipline to exit. It is not an emergency fund, not a substitute for cash, and not a way to "afford" a stock you otherwise cannot.
Tax treatment (informational)
If you hold the MTF shares and eventually sell:
- Long-term capital gains (held > 12 months): taxed at 12.5% (above the annual exemption).
- Short-term capital gains (held ≤ 12 months): taxed at 20%.
- Interest deductibility is nuanced. MTF interest is a cost of acquiring and holding an investment; whether and how it can be set off depends on your tax situation and how you report the activity (for example, as investment income versus business income). This is informational, not tax advice — check with a qualified tax professional for your case.
FAQ
Is the MTF initial margin a flat 50%? No. This is the most common myth. The regulatory initial margin is risk-based and scrip-specific: VaR + 3 × ELM for Group I stocks that are also in the F&O segment, and VaR + 5 × ELM for Group I non-F&O stocks and equity ETFs. The "50%" you have read about refers separately to the composition of collateral (how much must be cash-equivalent), not to the entry margin.
Is MTF interest charged daily or monthly? It accrues daily on the borrowed amount — every calendar day, weekends and holidays included — and is typically debited to your ledger monthly (some brokers post it weekly). Monthly debit is not monthly compounding; it is just when the accumulated simple interest is booked.
Do teaser rates apply to my whole position? Usually not. Rates like 5.99% apply only to the lowest slab (often the first Rs 1 lakh borrowed). At brokers with non-incremental slabs (like Pocketful), crossing the threshold re-prices your entire book to the higher band. And "9.69%" headlines (ICICIdirect, Kotak Neo) are paid-plan floors — the default plan pays far more (17.99% at ICICIdirect).
Which stocks can I buy on MTF? Only Group I equity shares and equity ETF units — the exchange's most liquid classification (broadly, traded on at least 80% of days with impact cost ≤ 1%). Each broker publishes its own MTF-approved list, a subset of Group I, updated periodically. Illiquid and penny stocks are not eligible.
What happens on a margin call? If your stock falls and your maintained margin drops below the required level, the broker issues a margin call asking you to add funds or securities. If you do not meet it, the broker can forced-sell (square off) your pledged shares — strictly in the manner set out in your Rights and Obligations Document. Some brokers (e.g. Zerodha) auto square-off once losses exceed a set share of the funded amount (20% at Zerodha).
Can I hold an MTF position forever? Most brokers state no fixed holding limit — you can hold as long as you maintain margin and pay interest. But interest runs every day, and a margin shortfall can trigger square-off. "Forever" is possible in theory; expensive in practice.
Which is the cheapest MTF broker in India? For a normal retail position (Rs 1–5 lakh borrowed), Dhan's 12.49% is the cheapest confirmed rate here, with Zerodha's flat 14.6% next. If you borrow very large amounts, Fyers' inverted 12.49% (above Rs 25 lakh) or a paid-plan 9.69% (ICICIdirect Rs 9,999 plan / Kotak Neo Trade Free Pro) can win — but only after the plan fee. The "5.99%" and "9.69%" headlines apply only to tiny slabs or paid plans. Confirm current rates on each broker's page.
Is MTF the same as a personal loan for shares? Functionally similar (you borrow to buy an asset and pay interest), but MTF is a secured, exchange-regulated facility: the shares you buy are the collateral, they are marked to market daily, and forced square-off protects the broker if the collateral falls. A personal loan is unsecured and unregulated by SEBI. MTF rates (12.49%–18%) can be lower than an unsecured personal loan, but the forced-sale risk is real and immediate.
Does the SEBI June 2026 consultation change any of this? Not yet. The June 2026 consultation paper proposes raising broker minimum net worth from Rs 3 crore to Rs 5 crore, allowing MTF funding via NCDs, and expanding eligible collateral. As of writing, it is a proposal, not a rule — nothing has changed until SEBI issues a final circular.
Not investment advice. MTF rates, slabs, plan structures, and charges change frequently — several changed in the weeks before this was written. Always confirm the current numbers on the broker's official page before you act. All rates as of 13 August 2026. Remember: every low headline quoted here (5.99%, 7.99%, 9.69%) applies to a small lowest slab or a paid plan only; the rate you actually pay on a normal position is the higher band or default rate. Where a broker is marked "not independently verified", treat the figure as a lead to confirm, not a fact to rely on.
Sources & further reading
Regulation (SEBI / exchanges):
- SEBI Master Circular for Stock Brokers — MTF provisions, Section 39 (Rights & Obligations Document), and the initial-margin framework (Table 10 as summarised in the June 2026 consultation).
- SEBI Comprehensive Risk Management framework (updated October 2023) — Group I liquidity classification and the rolling six-month liquidity assessment.
- SEBI Consultation Paper on the review of the Margin Trading Facility (June 2026) — proposed net-worth, NCD-funding, and collateral changes.
- NSE / BSE — published lists of Group I securities and MTF-eligible scrips.
Broker official pages (verify the live rate):
- Zerodha — MTF charges and terms (interest, brokerage, pledge, square-off).
- Angel One — Margin Trading Facility rates.
- Pocketful — MTF slab rates.
- Fyers — MTF interest slabs (effective 2 June 2025).
- Dhan — MTF interest ladder.
- ICICIdirect — MTF / Prime plan interest rates (effective 21 August 2026).
- Kotak Neo — Trade Free Pro MTF rate.
- HDFC Securities — BSPL ("Buy Stocks Pay Later") terms; HDFC Sky MTF pricing.
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