Macquarie Prime - Why so cheap?

Hi,

I was wondering if anyone knows why Macquarie Prime's Margin Loan rate, which is currently 6%, is so cheap compared to other providers (like the Banks)? Commsec is 7.85%.

Are there any strings attached with Macquarie Prime? Fees? Or are they just trying to be competitive in getting more business?

Also as another question, has anybody got an account with them? How do you find there service? And how comprehensive are their online tools?

I am just wondering if they would make a good margin loan provider. The difference in interest rates, would make a huge difference to performance over time.

Cheers,
Ash.

 

Hi Ashwright,

I think Mac Bank are extremely keen to get new business on board.

Cheers,

Dan

 

I have been using them for a year. The advertise themselves as a trading platform and hence competing with other CFD providers. I think that's the reason that their interest rate is low. Also the lending ratio for major stocks is comparable to other CFD providers. Their trading platform is a bit unstable sometime but it has improved a lot since a year ago. Also by default they don't have all stocks available. If you want any stock that is not on their list, you have to send a request to them to add it. This is especially true for hybrid and interest rate securities as they are not very common among traders, and hence they require hundred percent margin for those securities at the moment. I have asked them about it last week and they said they will get the credit team to review them next. They got the commission rebate wrong two months back and hence I think their system is still a bit un-mature. I am yet to do a manual check on their interest charge for the last few months. Other than that, I am quite happy with it.

 

I did notice that Macquarie will not allow Managed Funds such as the Vanguard Index Fund to be used as security. This is different to say BT or Commsec. This means that Macquarie can 'liquidate' you and obtain funds more swiftly. I do like their Interest Rates though, very competitive.

 

Thanks everyone for their thoughts. It does seem they are not as 'full service' as a traditional margin loan provider. But for a share portfolio it does seem very attractive.