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Fully Paid Lending

Earn passive income on stocks clients already own


Enroll now

With the Fully Paid Lending Income program, you can lend your client's securities to TD Ameritrade Institutional each month to potentially earn additional income. There's no added cost and risk is mitigated because the loan is backed by 102% cash collateral.

Potential benefits of the program

• Additional monthly income potential
• No action required after successful enrollment*
• No additional cost to participate
• Clients maintain ownership of shares
• Opt out of the program at any time
• Loans are backed by 102% of cash collateral held at a 3rd party bank, aimed at reducing risk
• Easily keep tabs on earnings in your client's account with statements

Important Considerations

It’s important to note that there are risks of Fully Paid Lending Income.

• Typical Investment Risk: All inherent investment risks apply and share performance is subject to market fluctuation.
• SIPC: The SIPC doesn't cover shares on loans, which are secured by 102% collateral provided by TD Ameritrade Institutional and held at a third party bank. You can withdraw on this collateral in the unlikely event of a default in which TD Ameritrade Institutional does not return borrowed securities.
• Tax Implications: After you lend out a dividend-paying security, your clients will receive cash-in-lieu of their regular dividend payment. It's important to remember that dividend income is taxed at a different rate.
• Waived Voting Rights: Shares will be lent out and clients will temporarily forfeit voting rights to the borrower. However, if clients would like to reclaim them before the record date, it's easy to regain voting privileges.
• Market Dictates Demand: Whether or not securities are borrowed depends on their volume and lending market demand. Interest rates and demand will vary by security over time.

How Fully Paid Lending Income works

When clients are enrolled* in the program, we'll manage the lending process automatically and they will receive interest based on the demand for their securities in the lending market — with large positions in unique equities often in highest demand. Plus, clients retain full ownership of investments, which means earnings will continue to perform based on market conditions.

Here’s an example of how the interest adds up.

Shares on loan

10,000

Market price

$10

Market value

$100,000

Annualized lending interest rate**

8.50%

Daily accrual
$100,000 x 8.50% / 360 days

$23.61

Hypothetical monthly income
$23.61 x 30 days / month

$708.30

For illustrative purposes only. Past performance is not a guarantee of future results.

Start earning passive income today

Submit our agreement to enroll.

Additional monthly income potential if we lend your client's securities.

Contact your Relationship Service Team with any questions.






Frequently Asked Questions:
Fully Paid Lending Income Program

  • What is the Fully Paid Lending Income Program?

    TD Ameritrade Institutional's Fully Paid Lending Income Program provides clients the opportunity to earn extra income from the securities they already own by loaning shares to TD Ameritrade Institutional while clients maintain ownership of the shares. TD Ameritrade Institutional typically loans the shares to third parties (brokers, traders, hedge funds) for a fee, which is then shared with clients in a 50/50 split.

  • Who is eligible for the Fully Paid Lending Income Program?

    Currently, only cash and margin IRA accounts are eligible to enroll in the program. All other margin accounts are ineligible at this time. It should also be noted that employer-sponsored retirement plan accounts like 401(k)s are not eligible under ERISA rules. In addition, clients must have $100,000 in net worth.

  • How do clients enroll in the program?

    Submit our agreement to enroll in the program.

  • What is needed to enroll in the Fully Paid Lending Income Program?

    Clients are required to meet certain suitability and eligiblity requirements prior to acceptance into the Fully Paid Lending Program. Clients will be required to review and acknowledge the Master Agreement prior to enrollment.

  • Will clients pay any fees to participate in the program?

    No, there are no fees associated with the program. Income received from third parties by TD Ameritrade Institutional for the shares on loan will be split 50/50 between clients and TD Ameritrade Institutional.

  • How do clients earn income?

    TD Ameritrade Institutional will charge borrowers for the loan and collect fees that will be shared with the enrolled client in a 50/50 split. Income will be paid on a monthly basis.

    Hypothetical income example (based on 360-day annualized lending rate of 10.5%):

    Market value of loaned shares$50,000
    Daily accrual$14.58
    Monthly income$437.50
    Client Portion$218.75
    TD Ameritrade Institutional Portion$218.75

  • Where can I review loan activity and accrual?

    For Veo One, go to https://veoone.tdainstitutional.com, then go to Account Management > File Download > enter in rep code of account(s) in the program.

    For AdvisorClients, go to: https://www.advisorclient.com, then go to Fully Paid Stock statements on the tab under the Documents menu. (The account has to be enrolled in the program in order to see the tab.)

  • What securities will be loaned out?

    Upon enrollment, all fully paid securities will be eligible to loan; however, market demand will drive which securities may be loaned out. Demand and pay rates vary by security and over time.

  • How will securities be chosen for loans?

    All enrolled accounts holding the security will be identified and put into a lottery process. Accounts will then be selected on a random basis.

  • How are lending rates determined?

    Each security has its own lending rate based on demand.

  • Can clients still buy/sell the security while it is out on loan?

    Yes, clients may remain invested and can continue to buy or sell securities as usual. However, once the securities on loan are sold the loan will terminate and the client will stop receiving loan interest.

  • Where will the collateral be held?

    TD Ameritrade Institutional will fully secure loans through the program with FINRA-approved methods of collateral (cash or U.S. Treasury bills and Treasury notes) that are held at Wells Fargo, our third party administrator.

  • How do clients optout/unenroll from the Fully Paid Lending Income Program?

    To optout/unenroll, please contact your Relationship Service Team.

  • What risks are involved in the Fully Paid Lending Income Program?

    Fully Paid Lending isn't appropriate for everyone. Clients with very short-term liquidity needs should not consider the program.

    A primary risk is counterparty default. TD Ameritrade Institutional is your counter party on fully paid lending transactions. If TD Ameritrade Institutional were to default on its obligations as defined in the MSLA, you would have the right to withdraw the collateral from the custodian bank in the manner described in the Collateral Administration Agreements.

    Please refer to the other FAQs on this page to gain a better understanding of the program benefits and risk considerations.

  • How will dividends be handled within the Fully Paid Lending Income Program?

    Substitute payments will be provided in lieu of dividends and are taxed differently than dividends. Consult a tax professional for further details.

  • Will clients continue to have voting rights for shares on loan?

    No, voting rights are forfeited for shares on loan, but the client will retain voting rights for any shares of that security that are not on loan.

  • How will SIPC coverage be impacted?

    SIPC will not cover the securities position on loan. However, the loan will be backed by 102% cash collateral held at a third party bank. That bank is currently Wells Fargo. In the event of a TD Ameritrade Institutional default, the client would be able to access 100% of the marked value of securities directly from the third-party bank. This information and how to contact the third-party bank are described in the Master Securities Lending Agreement.

  • What if I have more questions?

    If you have any questions, please contact your Relationship Service Team.