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closer look into securities income program

Take a closer look at the Securities Income Program.

A chance to earn extra income on the shares you already own.

What is the Securities Income Program?

In short, this program is securities lending. That means you give us the right to borrow certain in-demand stocks for a short-term purpose to loan out to other investors, and in exchange, we’ll pay you interest. It’s the potential for extra cash with minimal effort.

  • We’ll do the work.

    All you need to do is consent to enroll, and once you’re eligible, we’ll see if any of your securities are in demand. If so, they’ll be automatically lent out in exchange for interest.

  • Sell anytime, no restrictions.

    While enrolled in this program, you maintain full ownership of the securities on loan at all times. If you decide to sell, we’ll simply end the borrowing agreement for that particular stock.

  • Sit back and earn.

    We’ll deposit any of the daily interest your shares make to your account in the middle of each month. This is in addition to the value of any dividends earned.

  • No long-term commitment.

    If you wish to stop participating in the program, you’re able to unenroll at any point in time with no penalties.

  • We’ll do the work.

    All you need to do is consent to enroll, and once you’re eligible, we’ll see if any of your securities are in demand. If so, they’ll be automatically lent out in exchange for interest.

  • Sell anytime, no restrictions.

    While enrolled in this program, you maintain full ownership of the securities on loan at all times. If you decide to sell, we’ll simply end the borrowing agreement for that particular stock.

  • Sit back and earn.

    We’ll deposit any of the daily interest your shares make to your account in the middle of each month. This is in addition to the value of any dividends earned.

  • No long-term commitment.

    If you wish to stop participating in the program, you’re able to unenroll at any point in time with no penalties.

How it works.

Take a step-by-step look at the program.

step one

First, give us your consent to enroll. We’ll auto-enroll you the moment you become eligible.

step two

We’ll identify your in-demand securities and loan those out to other investors. While they’re borrowed, they’ll accrue a daily interest.

step three

You’ll see borrowed shares and earned interest in your account activity in the middle of each month and in your end-of-month account statement. You’ll also see the value of any dividends as they’re earned.

step four

Even if we’re borrowing your shares, sell as normal, no restrictions. We’ll simply end the borrowing agreement for shares you choose to sell. 

What you should know.

While this program is generally hassle-free, and entirely fee-free, there are a few things to keep in mind.

  • Borrowed shares

Enrollment doesn’t guarantee that your shares will be borrowed. Typically, securities that do get borrowed are in high demand or limited supply.

  • Dividends

When we borrow your security, we must provide collateral for the loan in the form of the security’s cash value — this gives protection to the trader. Because of this, for shares that do get borrowed, you’ll receive cash instead of your regular dividend payment for the duration of the loan. This may be taxed differently. Talk to your tax advisor if you have concerns.

  • Proxy voting rights

You give up proxy voting rights while your security is on loan. Though this won’t be of concern to most investors, it may be of greater concern if you’re a larger institutional investor.

How to enroll.

If you already have an Ally Invest Self-Directed account, visit Securities Income Program and select Consent to Enroll to get started.

If you're new to self-directed trading, first learn more, then when you're ready, open an account. You’ll choose Consent to Enroll in step 2 of your application.

FAQs

We have answers.

Yes. You still own your shares, so you can sell them at any time. Selling your shares while they’re being borrowed terminates the loan, and you’ll no longer earn interest off that share.

Income from loans are taxed at an ordinary income rate and do not qualify for capital gain rates.

 

Ally Invest Securities, LLC, Securities Income Program (SIP) is facilitated by Apex Clearing under the Fully-Paid Securities Lending (FPSL) agreement which can be reviewed here. 

 

Full Risk Disclosures with respect to fully paid or excess margin securities lending transactions available here.

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Eligibility

To be eligible for this program, you need to have a cash, non-margin account with at least 1 of the following:

 

  • A net worth of at least $100,000
  • An account value greater than $50,000
  • An annual income greater than $50,000
  • More than 5 years’ trading experience of any kind

 

Once every 3 years, we’ll send you a request to update this information. Or, to update sooner, call us any time.

 

Even if you don’t meet any of those requirements today, by consenting to participate upon eligibility we will auto-enroll you as soon as we know you qualify.