The best investments offer securities loans

Interest rates, Schufa, flexibility
The best investments offer securities loans

October 14, 2024, 11:29 am

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How sensible is it to borrow against your own securities account? You can find out here which costs are rising and which banks or brokers have the most attractive conditions.

If you have a full portfolio of securities, if you want to buy cheap shares quickly or if you have some money, you have several options: You can sell shares, funds or ETFs to obtain the necessary liquidity or borrow against the investment balance with a securities lending. So anyone looking for the best portfolio should also consider how much of the invested money can be used to buy shares or for other purposes.

What factors affect choosing the right storage facility?

As with other loans, the effective interest rate of a loan is an important factor. It should be as low as possible. But the size of the possible loan is also important. It is initially based on the value (loan-to-value) of the securities in the portfolio. However, since there can always be turbulence on the stock exchanges, brokers and custodian banks are not willing to look at 100 percent of the securities balance as security in the form of a loan. Depending on how the suppliers evaluate the individual deposits, there are big differences in the credit limit. The same applies to the question of who customers can use the borrowed money and whether security loans are reported to Schufa – the providers do not work uniformly here .

Cheap investment, cheap loan?

To make it easier for interested investors to decide on the right portfolio, ntv commissioned FMH Finanzberatung to identify the best offers from banks and neobrokers, including security lending.

The search turned out to be unexpectedly difficult. Apparently, too much transparency is not in the best interests of all market participants. Out of the (reachable) number of brokers and banks willing to participate in the study, some of them did not want to provide binding information on the interest rate or other conditions.

With some effort, the Frankfurt experts still managed to filter the best banks willing to provide information.

There are generally two “ideal” providers

Before customers can even get a secured loan, the deposit must be filled with a large sum of money or less. Against this background, FMH’s financial consultancy also included the holding and trading fees in the assessment. The combination of these costs and credit conditions ultimately determined which suppliers were placed on the best list.

The differences in this area are significant. Some providers such as S Broker (Sparkassengruppe) only look at stocks, currencies and ETFs as security up to 60 percent of the balance. Other players, such as Smartbroker, set the limit at 75 percent of the investment balance. Some brokers and custodial banks such as maxblue or finvesto even see certain funds as security for up to 90 percent of the investment amount.

It is also surprising that there are still banks that report security loans to Schufa. Even if the value of the securities on the stock exchange is subject to changes, the loan is secured by more than 100 percent thanks to the low loan-to-value ratio. So there is no need for Schufa entry.

Another specific criterion is whether the proceeds from the loan are subject to markups. The custodial banks and brokers primarily provide security loans for the purchase of new investments. There are more and more providers now that allow them to be used for other purposes. The credit check is usually done digitally within minutes.

In the overall evaluation of the costs of securities and securities loans, only online and neobrokers scored “very good”. They are: finanzen.net zero, Smartbroker, Scalable Capital, flatex, S Broker and maxblue from Deutsche Bank.