Schwab Securities Lending Fully Paid Program

Earn income by lending your own securities.

Ready to put your stocks to work? With Schwab's Securities Lending Fully Paid Program, you can lend out eligible securities in your portfolio to potentially earn additional monthly income.

There's no cost to participate and applying is a simple, one-time process.

How does the Securities Lending Fully Paid program work?

Simply put, you're allowing Schwab to loan your eligible shares to other investors or financial institutions when there is demand for them, often driven by short selling. In exchange, you'll receive interest based on this demand. Unique equities usually command the highest rates.

Passive income. Activated.

Monthly income potential. No hidden fees.

You're always in control.

Maintain full ownership. Sell or opt out at any time.

Reassurance made easy.

Securities backed with cash collateral at 102%. You apply, we do the rest.

Call 877-793-8872 to speak with a Securities Lending team member or login to check for available offers.  See if you qualify. Tooltip

 

What are some of the advantages of this program?

  • You remain invested in your securities
  • You can sell your shares or opt out at any time
  • No enrollment fees or hidden costs 
  • No action required after enrollment1
  • Easily track earnings on our online dashboard
  • You may receive a cash-in-lieu instead of a dividend or interest payment

How much can I earn by lending my securities?

When your securities are loaned out, interest is accrued daily and will be automatically paid to your account each month.2 The interest you’re paid will depend on the demand for the shares on loan. Here’s an example of how your income is calculated.

Shares on loan
 		10,000
Market price
$10
Market value
$100,000 
Annualized lending interest rate2  8.50% 
Daily accrual ($100,000 x 8.50% / 360 days)
 $23.61
Your hypothetical monthly income
($23.61 x 30 days)
 $708.30

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

A few important considerations.

Before you decide to participate in Schwab's Securities Lending Fully Paid Program, there are some potential risks that you should be aware of.

  • Market risks.

    When securities are borrowed to facilitate a short sale, there's a chance that the market price of that security will go down.

  • Dividends.

    When you lend a dividend-paying security, you may receive a cash-in-lieu instead of your regular dividend payment, which is taxed at a different rate.

  • Voting rights.

    When you loan your shares, you temporarily forfeit your voting rights. However, you can always recall the loan to regain your voting privileges.

  • Loan term.

    Schwab can end the loan at any time. You'll receive a notification if this has occurred.

  • SIPC protection.

    Because borrowed securities may not be covered by SIPC, loans are backed at 102% by cash collateral and held at Charles Schwab Trust Company.3

Frequently asked questions.

This program gives you the opportunity to potentially earn extra income from the securities you already own by loaning them to Schwab while you maintain full economic ownership. Schwab typically loans the shares to third parties (brokers, traders, hedge funds) for a fee, which is then shared with you.

Schwab charges borrowers for the loan of your securities and collects fees that will be shared with you. The interest you earn is based on market demand and will be paid on a monthly basis.

Hypothetical income example (based on 360‑day annualized lending rate of 10.5%):

Market value of loaned shares $50,000
Daily accrual $14.58
Monthly income $437.50
Charles Schwab portion $218.75
Client portion $218.75

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

You can see your loaned shares, collateral, month-to-date accruals, and the rate you're earning online daily. 

Up-to-date information will only be available if the security is on loan. It can be found at Schwab.com by going to Accounts > Securities Lending.

Each security has its own lending rate based on demand and is subject to change daily.

Yes, you may remain invested and can sell the securities as usual within the supplemental account. However, once the securities on loan are sold, the loan will terminate, and you'll stop receiving loan interest.

You can opt out or unenroll by calling the Securities Lending Services team at 877-793-8872 between 8:30 a.m. and 4:00 p.m. EST.

Fully paid lending isn't appropriate for everyone. Clients with very short-term liquidity needs or who do not understand the risks should not consider the program.

A primary risk is counterparty default. Schwab is your counterparty on Securities Lending Fully Paid transactions. In the unlikely event of a default by Schwab, you can draw upon the collateral held by Charles Schwab Trust Company.

Please review the FAQs to gain a better understanding of the program benefits and risk considerations.

See all Securities Lending Fully Paid FAQs

Still have questions? We're here to help.

If you want to know more about our Securities Lending Fully Paid Program, you can reach us by calling 877-793-8872 between 8:30 a.m. and 4:00 p.m. EST.