Margin lending

A margin account extends credit to you which is backed by your eligible securities. A margin loan allows you to borrow funds to purchase securities or to withdraw cash. Interest accrues on the amount borrowed.

How can margin lending help?

This source of funds can be used to buy additional stocks and bonds or for short-term cash needs such as bridge loans, personal credit, home mortgages, investment property purchases or small business capital needs.

Is a margin account right for you?

A margin account offers a number of advantages, but there are also risks involved. We recommend speaking with a financial advisor to determine if a margin account is right for you.

Advantages:

• Convenient, easily accessible line of credit
• Competitive rates and easy setup
• No closing costs or application fees
• Not reflected on credit reports
• No set repayment schedule
• Margin interest can be tax deductible, but may be limited to your net investment income (please consult your tax advisor)

Ameriprise Financial wants you to be fully aware that there are also risks involved with margin borrowing

If the value of the securities used as collateral falls below the required minimum equity level, a "margin call" will be issued. You may be required to deposit additional cash or securities or sell existing securities to meet the call.

Risks:

• Loss of funds
• Forced sale of securities in your account
• Reduction in available loan capabilities based on securities held

Ameriprise Financial, like other firms, can sell securities to cover a margin call without informing the investor.

If the market declines significantly, your margin loan may be greater than the market value of the securities in the account and you will be required to cover the deficit. In other words, you can lose more funds than you deposit in a margin account.

Who's eligible?

Only certain non-qualified accounts are eligible for margin lending. The minimum equity required to open a margin account is $2,000. Margin lending initial purchase and equity requirements are determined by 2 organizations:

• The Federal Reserve Board. You pay for 50% of the purchase and borrow 50% from Ameriprise Financial. Securities other than stock have lower initial requirements.
• The Financial Industry Regulatory Authority (FINRA). Brokerage firms can't set maintenance requirements that are lower than those mandated by the NYSE and FINRA, but they can set the requirements higher. Securities other than stock have lower maintenance requirements.

Investment products provided through Ameriprise Financial are not federally or FDIC insured, are not deposits or obligations of, or guaranteed by, any financial institution, and involve investment risks, including possible loss of principal and fluctuation in value.