Schwab Bank: Pledged Asset Line®
Offer your clients a line of credit that can be used for a wide range of financial needs.
The flexibility your clients need.
To help investors tap into the value of their investments and access cash for personal or business needs, generally without having to sell securities, Schwab Bank offers a Pledged Asset Line® (PAL), a line of credit that allows clients to borrow against non-retirement assets in their portfolio.
Secured by eligible assets held in a separate pledged account maintained by Charles Schwab & Co., Inc., clients can use their line of credit to access the funds they need while maintaining their investing strategy.
How can your clients use a PAL?
Can be used for a wide range of financial needs:
- Bridge funding for a new home
- Home renovation
- New business startup
- Tax payments
- College tuition
- Dream vacation
Benefits:
- Line amounts beginning at $100,000.
- Competitive variable rates, based on the Secured Overnight Financing Rate ("SOFR") plus an interest rate spread.
- Interest charges only on the amount of the line used.
- Line access via checks or wire transfers.
- No set-up fees or prepayment penalty. Brokerage fees and commissions may apply.
- Streamlined digital application process.
- Potential rate discounts with Investor Advantage Pricing.1
To learn more, visit the Introduction to the new Pledged Asset Line section in the Service Guide or call Schwab Bank at 800-986-3700 to speak with a Regional Banking Manager.
PAL interest rates
Rates below do not reflect Investor Advantage Pricing discounts.
PAL interest rates
| Loan Value of Collateral at Origination | Annual Percentage Rate (APR) |
| $100,000 to <$250,000 | SOFR +4.40% |
| $250,000 to <$500,000 | SOFR +3.90% |
| $500,000 to <$1,000,000 | SOFR +3.40% |
| $1,000,000 to <$2,500,000 | SOFR +2.90% |
| $2,500,000 and above | SOFR +2.40% |
Investor Advantage Pricing1
With our exclusive offer, the more qualifying assets you have with Schwab, the more you can save on your PAL interest rate.
Qualifying assets are based on Schwab brokerage and Schwab Bank combined account balances, including:
- Brokerage accounts in which the borrower(s) is an owner, trustee, or custodian;
- Bank accounts in which the borrower(s) is an owner or trustee: checking & savings;
- Non-Retirement Business Corporation, LLC, Partnership, and Sole Proprietorship accounts may be eligible depending on the borrower's ownership and role. (Excludes business retirement accounts such as Simple IRA, SEP IRA, & Pension Trust).
0.25%
interest rate discount
$250,000 – <$750,000
in qualifying assets
0.50%
interest rate discount
$750,000 – <$4,500,000
in qualifying assets
0.75%
interest rate discount
$4,500,000 – <$9,000,000
in qualifying assets
1.00%
interest rate discount
$9,000,000+
in qualifying assets
Want more? Count on it
Learn more about our holistic bank and trust solutions that can help your clients make the most of their money.
Already custody with Schwab?
Ready to take advantage of banking, lending, and trust services to support your clients in even more ways with Schwab?
Learn more in the Service Guide, contact your Regional Banking Manager, or call 800-986-3700.
Ready to talk with us?
Access to streamlined banking in one place with Schwab Bank is just another reason why so many RIAs consider Schwab a custodian of choice.
Get in touch with us today to learn more about all the ways we can support you.
Investment and Insurance Products Are: Not FDIC Insured • Not Insured by Any Federal Government Agency • Not a Deposit or Other Obligation of, or Guaranteed by, the Bank or any of its Affiliates • Subject to Investment Risks, Including Possible Loss of Principal Amount Invested
1. For Charles Schwab Bank & Charles Schwab Premier Bank Pledged Asset Line (PAL) Investor Advantage Pricing (IAP): PALs to natural persons and trusts are eligible for only one Investor Advantage Pricing discount per loan. PALs are eligible for an interest rate discount between 0.25% and 1.00% based on Borrower's Schwab brokerage and Schwab Bank combined qualifying assets totaling $250,000 or greater. Loans to organizational borrowers are not currently eligible for IAP discounts.
A. For PAL loans made to individuals, the "Borrower" is defined as any natural person(s) identified as Borrower(s) in the PAL loan application. Qualifying assets are based on the combined account balances as listed below:
a) Brokerage accounts in which the Borrower is an owner, trustee or custodian;
b) Bank deposit accounts in which the Borrower is an owner or trustee: checking & savings;
c) Non-retirement Corporate, LLC, Partnership and Sole Proprietorship accounts may be eligible depending on the Borrower's ownership and role (excludes business retirement accounts such as Simple IRA, SEP IRA & Pension Trust).
B. For PAL loans made to revocable trusts, the "Borrower" is defined as the Trust named in the PAL loan application. Qualifying assets are based on the combined account balances as listed below:
a) Brokerage accounts in which the Borrower is an owner;
b) Bank deposit accounts in which the Borrower is an owner: checking & savings;
c) The qualifying assets, as outlined in Section A above, of any natural person(s) named as BOTH "Trustee of Trust Borrower" AND "Grantor of Trust Borrower" as identified in the PAL loan application.
C. For PAL loans made to irrevocable trusts, the "Borrower" is defined as the Trust named in the PAL loan application. Qualifying assets are based on the combined account balances as listed below:
a) Brokerage accounts in which the Borrower is an owner;
b) Bank deposit accounts in which the Borrower is an owner: checking & savings.
Retirement accounts, including all IRAs, are excluded from this offer.
Schwab Bank and Schwab Premier Bank make their best effort to identify all qualifying assets based on your client profile. If you have questions regarding your specific assets or account eligibility, please call your Regional Banking Manager for assistance.
Qualifying new assets must be deposited prior to the start of an application to be considered for discount purposes.
The Pledged Asset Line is a demand line of credit provided by either Charles Schwab Bank, SSB, or Charles Schwab Premier Bank, SSB, (each, an Affiliated Bank and together, the Affiliated Banks). As a non-purpose line of credit, proceeds may not be used to purchase securities, pay down margin loans, or be deposited into any brokerage account.
Entering into a Pledged Asset Line and pledging securities as collateral involves a high degree of risk. You are pledging securities, the value of which is affected by events outside your control. Market fluctuations may cause the value of your pledged assets to decline. In addition, the Affiliated Banks, in its sole discretion, will determine at any time the eligible collateral criteria and the loan value of collateral. The Pledged Asset Line is uncommitted and the Affiliated Banks may demand full repayment at any time for any reason or no reason. In addition, if the loan value of collateral is insufficient to satisfy the minimum credit facility size or to support the outstanding loans, the Affiliated Banks may demand immediate payment of all or any portion of the outstanding obligations, or require additional cash or securities be pledged; otherwise the Affiliated Banks may immediately sell some or all of the pledged securities without further notice to you, which may result in tax consequences.
A Pledged Asset Line requires a brokerage account ("the Pledged Account") at Charles Schwab & Co., Inc. and sufficient eligible collateral to support a minimum credit facility size of $100,000. The Affiliated Banks are not acting or registered as securities broker-dealers or investment advisors.
Pledged Asset Lines to be held individually, jointly by natural persons, or by revocable trusts are offered by Charles Schwab Bank, SSB. Pledged Asset Lines to be held by incorporated organizations, non-incorporated organizations, or irrevocable trusts (collectively "entities") are offered by Charles Schwab Premier Bank, SSB.
All loans are subject to credit and collateral approval. Before you decide to apply for a Pledged Asset Line, make sure you understand the risks.
The advertised Annual Percentage Rate (APR) is an estimate reflecting the average borrowers cost expressed as a percentage. The APR will be set during underwriting and is based on the loan value of collateral at the time of origination. Your individual rate may vary. The APR is variable and may change weekly based on the current market rate of the Secured Overnight Financing Rate (SOFR).
Charles Schwab & Co., Inc., Charles Schwab Bank, SSB and Charles Schwab Premier Bank, SSB are separate but affiliated companies and subsidiaries of The Charles Schwab Corporation. Deposit and non-mortgage lending products, including the Pledged Asset Line, are offered by Charles Schwab Bank, SSB, Member FDIC and Equal Housing Lender, and Charles Schwab Premier Bank, SSB, Member FDIC.
Charles Schwab & Co., Inc. does not solicit, offer, endorse, negotiate, or originate any mortgage loan products and is neither a licensed mortgage broker nor a licensed mortgage lender. Home lending is offered and provided by Rocket Mortgage, LLC. Rocket Mortgage LLC., is not affiliated with The Charles Schwab Corporation, Charles Schwab & Co., Inc., Charles Schwab Bank, SSB, Charles Schwab Trust Bank or Charles Schwab Premier Bank, SSB. In order to participate, the borrower must agree that the lender, Rocket Mortgage, may share their information with Charles Schwab Bank, SSB and Charles Schwab Bank, SSB will share their information with the lender Rocket Mortgage. Nothing herein is or should be interpreted as an obligation to lend. Loans are subject to credit and collateral approval. Other conditions and restrictions may apply. This offer is subject to change or withdraw at any time and without notice. Hazard insurance may be required.