Dhan Reduces MTF Interest Rates to 12.49% Per Annum, Increases Leverage to 5x
Dhan has reduced its MTF interest rates to 12.49% per annum (0.0342% per day) while increasing leverage from 4x to 5x and expanding eligible stocks from 1,500 to over 1,700 securities. The new five-slab rate structure ranges from 12.49% to 16.49% per annum, with MTF limits increased to ₹1 crore. This positions Dhan competitively in the brokerage market while making advanced trading tools more accessible to retail investors.
*this image is generated using AI for illustrative purposes only.
Dhan , India's fastest-growing online brokerage platform, has upgraded its Margin Trading Facility (MTF) interest rates to 12.49% per annum or 0.0342% per day, targeting reduced leverage costs for retail investors. The upgrade forms part of the platform's strategy to provide advanced trading tools to the Indian retail investment segment.
Understanding MTF and Its Market Impact
Margin Trading Facility allows investors to purchase securities by paying only a fraction of the total purchase value, with the remaining amount funded by the brokerage. Interest charges apply on the funded portion, calculated on a per-day basis on Dhan's platform. This structure enables investors to begin their investment journey with minimal initial capital while reducing total leverage costs and increasing net returns.
Many brokers now calculate MTF interest rates on a per-day basis to minimize costs for investors. Investors can estimate their total MTF expenses in advance using MTF calculators , facilitating more efficient trade planning.
Enhanced Features and Expanded Access
Beyond rate reductions, Dhan has expanded its MTF utility significantly. The platform has increased leverage from 4x to 5x, providing investors with higher purchasing power. The eligible stock universe has grown from 1,500 to over 1,700 stocks, allowing MTF usage across a broader spectrum of securities spanning large-cap, mid-cap, and small-cap categories.
The MTF limit has been raised from ₹50 lakhs to ₹1 crore, accommodating larger investment requirements.
New Rate Structure
Dhan's updated interest rate structure features five distinct slabs based on funded amounts:
| Slab | Amount Funded by Dhan | Interest Rate (p.a.) |
|---|---|---|
| 1 | Up to ₹5,00,000 | 12.49% |
| 2 | ₹5,00,000.01 to ₹10,00,000 | 13.49% |
| 3 | ₹10,00,000.01 to ₹25,00,000 | 14.49% |
| 4 | ₹25,00,000.01 to ₹50,00,000 | 15.49% |
| 5 | Above ₹50,00,000 | 16.49% |
Competitive Market Positioning
Dhan's MTF rates position the platform competitively within the brokerage industry. The company focuses on providing higher accessibility to market participants at lower rates rather than concentrating solely on high-value clients.
| Broker | Base Interest Rate (per day) | Max Leverage |
|---|---|---|
| Dhan | 0.0342% | 5x |
| Zerodha | 0.04% | 5x |
| Groww | 0.041% | 4x |
| AngelOne | 0.041% | 4x |
| ICICI Direct | 0.0265% | 4x |
| Kotak Securities | 0.027% | 5x |
Risk Management and Regulatory Framework
MTF carries inherent risks alongside its benefits. While it amplifies potential gains, it equally amplifies potential losses during unfavorable market movements. The minimum margin requirement stands at 20% for MTF positions. When margins fall below this threshold, brokers issue margin calls, and failure to add funds results in automatic liquidation of pledged holdings to recover outstanding dues.
Best practices include maintaining cash buffers to absorb sudden volatility and meet margin calls, along with implementing stop-loss strategies to limit downside risk.
Market Accessibility and Strategic Impact
The upgrade in Dhan's MTF interest rates represents a significant step toward democratizing advanced trading tools for retail investors. By reducing overall leverage costs and expanding the stock universe, the platform makes equity markets more accessible, enabling participants to execute high-conviction strategies with enhanced financial flexibility.
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