What are benchmark interest rates and where do they come from?

We use benchmark interest rates to calculate the overnight fees you pay for leverage CFD trading.

A benchmark interest rate is a standard interest rate used for pricing financial products and setting interest rates on loans and bonds. It's set by central banks or financial authorities and based on economic indicators. For example, USD interest rates are usually based on the Fed Funds rate set by the US federal reserve.

When you open a leveraged CFD long position, you are essentially borrowing money from your broker to finance your position. As a result, your broker will charge you an interest rate, also known as an overnight fee. At etoro we calculate the fee by combining the current market benchmark for that currency and our fee spread. Learn more about overnight fees here.

Where do etoro’s benchmark interest rates come from?

Our benchmark interest rates are generated by globally recognized benchmarks set by third-party financial institutions.

These benchmark rates are published in real real-time by central banks or other agencies. Each currency has one or more benchmarks and are used by thousands of financial institutions and publishers worldwide.

Here are the specific benchmarks we use to generate spot rates: