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Home / Direct Investing / Stock Lending Income Program
Ready to earn extra income?
Understanding stock (or securities) lending
Lend some, or all, of your fully paid securities to other investors and earn interest income. Just login to enrol and we look after the rest, including finding borrowers, tracking your loans, and depositing payments to your account.
How it works
When you enrol, your eligible stocks and ETFs are made available to lend to other investors. If one or more of your stocks is borrowed by another investor, you earn interest income that's calculated daily and paid to you monthly.
Eligible accounts
Only CAD and USD cash accounts qualify.
Watch this video to get an overview of the program.
Video length: 2 minutes, 4 seconds
Why enrol in Stock Lending
Stock Lending Income Program offers an easy way to put your investments to work.
Key features
You can earn interest income
It's easy and comes with no cost to you
You can sell your shares or opt out at any time
You're in control
Looking for more information about Stock Lending? Read article
How you make money with the Stock Lending Income Program
Your earnings will depend on which of your eligible stocks are borrowed.
Stocks in higher demand pay higher interest rates. Interest is calculated daily and paid to you each month.
Interest earnings are split 50|50 between you and TD. Here's a hypothetical example of lending an eligible stock for a day:
|
Current share price |
$100.00 |
|---|---|
|
Quantity on loan |
100 shares |
|
Loan value |
$10,000 {$100.00 (market price) x 100 shares} |
|
Annual interest rate for the loan |
8.00% |
|
Total income earned per day |
(Market value x interest rate) / # of days {($10,000) x (1.08)%} / 360 days = $30.00 |
|
Your earnings |
(Income per day x 0.5 TD commission = $15.00) |
|
Loan duration (20 days) |
$15.00 x 20 days = |
Frequently asked questions
Participation in the Stock Lending Income Program doesn't guarantee that your securities will be lent out immediately. We will match holdings with borrowers based on market demand.
Loans will be allocated to clients based on an algorithm that includes factors such as client holdings and price for the eligible security, foreign exchange rates, and the amount you currently have on loan from your account.
If you have securities on loan, you transfer their title and beneficial ownership to TD Securities Inc. We will have the owners' rights, including the right to transfer the loaned securities to others.
During the term of any loan, you will receive manufactured dividends (e.g. cash substitute payments), as you are entitled to the amount of any distributions made on or in connection with your loaned securities.
Things to remember:
- The Canadian Investor Protection Fund (CIPF) does not cover any securities while on loan. To offset this risk, we provide cash collateral updated to market value every day while your securities are on loan. CIPF coverage resumes once the loaned securities are returned to your account.
- Voting rights pass to the ultimate third-party borrower. This means that if you wish to vote at annual meetings, for corporate actions, or for board seats, you will need to recall the loan securities before the proxy vote dates (subject to a minimum of 10 business day notice period).
At this time, lent out securities are not eligible for dividend reinvestment benefits. If you wish to receive DRIPs, you can choose to exclude specific securities from being loaned at any time. Go to the Stock Lending tab, select Manage > Exclusion and update your preferences.
The length of time your securities will be lent out is based on market needs, usually short periods, no more than a maximum of 270 days.
No, but you can choose which securities are excluded from lending. To update, go to the Stock Lending tab and select Manage > Exclusions.
Keep in mind, you will not have the ability to manage your holdings until the business day following your enrollment in the program.
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