Effective September 23, 2022, the annual rate of interest you will be charged on your Baird loan (i.e., your “net debit balance”) will be equal to a “Base Rate” plus or minus a “Specified Percentage,” which will vary based on the highest net debit balance in any margin account among your Baird “household accounts” and the aggregate net value of your Baird household accounts (after subtracting the aggregate debit balances across those accounts).
To determine the interest rate that will be applied to your loan, see the table below.
Annual Rate of Interest = Current Base Rate of 9.00%
+/- Specified Percentage
|Household Account Value
(Net of Aggregate Debit Balance)
|Highest Debit Balance||$0-$249,999||$250,000-$999,999||$1,000,000-$1,999,999||$2,000,000 & Above|
|$0 - $19,999||2.750%||2.125%||1.375%||0.750%|
|$20,000 - $49,999||2.250%||1.625%||1.000%||0.625%|
|$50,000 - $99,999||1.625%||1.125%||0.625%||0.250%|
|$100,000 - $249,999||1.000%||0.625%||0.250%||0.125%|
|$250,000 - $499,999||N/A||0.375%||0.125%||-0.125%|
|$500,000 - $999,999||N/A||0.125%||-0.125%||-0.375%|
|$1,000,000 - $1,999,999||N/A||N/A||-0.375%||-0.625%|
|$2,000,000 and Above||N/A||N/A||N/A||-0.750%|
What Does “Household Accounts” Mean?
“Household Accounts” refers to your individual and joint accounts, and accounts related to you that share the same address and, at your request, are consolidated for statement mailing purposes.
How Your Interest Rate is Determined
As mentioned above, the interest rate applicable to a particular margin account is equal to the Base Rate as adjusted by a Specified Percentage. The Base Rate is set by Baird by reference to a number of factors, which may include commercially recognized interest rates (such as the broker call rate, the prime rate, the fed funds rate and/or SOFR), Baird’s cost of capital, industry conditions relating to extension of margin credit, and general market and competitive considerations. Baird may change the Base Rate at any time without specific notice to you. A change in the Base Rate will generally be reflected in the daily interest that is charged to your account beginning on the first business day following the change and will be disclosed on your Baird client statement.
The Specified Percentage is determined monthly by reference to the highest net debit balance in any of the margin accounts among your Baird household accounts and aggregate net value of your Baird household accounts (after subtracting the aggregate debit balances across those accounts) as of the end of the previous month.
As an example, if you have four Baird household accounts with values of $800,000, $500,000, $100,000 and $25,000 (for a total of $1,425,000), and two of those accounts are margin accounts with outstanding debit balances of $400,000 and $150,000 (for a total of $550,000), the household account value after netting or subtracting the aggregate outstanding balances is equal to $875,000 ( $1,425,000 - $550,000), and the highest debit balance is $400,000. Thus, applying the table above, the Specified Percentage for the two margin accounts would be 0.375% and assuming a Base Rate equal to 6.0%, the interest rate charged on the debit balances in each margin account would be 6.375%.