Interactive Brokers is a reputable brokerage company that offers a range of services which includes, but is not limited to ETFs, bonds and portfolio analysis. Since being found in 1978, the company has enjoyed great success and later became widely recognized among online broker services.
In this Interactive Brokers review, we’ll guide you through everything that you should know about the service.
But first, a word.
If you’re looking for a way to manage the money you’ve withdrawn from Interactive Brokers, why not try out Wise? With Wise, you can keep your money in more than 55 currencies and send them overseas with low and transparent fees. It takes just a few minutes to open an account for free.
|📝 Table of contents|
Interactive Brokers is mainly aimed at experienced investors. The majority of the products advertised, are aimed at traders who move high volumes.
However, Interactive Brokers does have one of the market’s most detailed education portals. Traders have access to a wealth of information that will get them up to speed very quickly. There are also new products that are being released regularly which will be appealing to traders who are making their first foray in this area.
While Interactive Brokers is predominantly aimed at experienced traders, it does its best to make itself inviting to beginners. Making this a user-friendly site for beginners to visit is something Interactive Brokers have worked hard on. It is one of the key factors we looked when we started to compile our review.
Interactive Brokers is quite complex when it comes to fees. The fees are slightly different between the two different account types. The IBKR Lite targets beginner investors and retail investors, while the IBKR Pro account is for more sophisticated traders.
It should be noted that if you have an IBKR Lite account and you use it to trade for more than just retail trading purposes, then Interactive Brokers may refuse your positions and orders.
Both with IBKR Lite and IBKR Pro accounts, investors won’t be required to pay monthly fees to use the account. This is one of the standout features of the site as costs are generally kept to a minimum for traders at Interactive Brokers.
While no monthly inactivity fees apply to IBKR Lite accounts, IBKR Pro accounts pass on inactivity fees for traders who have account balances of less than $100,000.
For example, if you have an account balance lower than $2,000, the inactivity fee start from $20 per month and the commissions get subtracted from this amount. For an account between $2,000 and $100,000, the inactivity fee is $10 per month and the commissions get subtracted from this.¹
There’s no minimum deposit when creating an account – we found this was the case for both the IBKR Lite and IBKR Pro accounts. There is one caveat for this: if you do margin trading, then a minimum deposit of $2,000 is required.¹
|IBKR Lite||IBKR Pro|
|Monthly account fee||$0¹||$0¹|
|Monthly Inactivity fee||$0¹|
Balance less than $2,000: $20 minus commissions¹
Balance between $2,000 - $100,000: $10 minus commissions¹
Balance is or more than $100,000: $0¹
|Minimum account deposit||$0 ($2,000 if trading on margin)¹||$0 ($2,000 if trading on margin)¹|
With International Brokers, you’ll either be subject to fixed or tiered rates. When using IBKR Lite, the fees will be either commission free or fixed. With IBKR Pro, fees tend to be fixed for smaller volume trades and for higher volumes there is a tiered system in place.
The reason for the difference in fees between IBKR Lite and Pro, is that the IBKR Lite account is recommended for retail trades whereas IBKR Pro is for industry investors – the fees cover higher volume trades.
The IBKR Lite account charges zero commissions and fees on listed stocks and ETFs. The IBKR Pro account has fees of $0.005 per share, but there is a minimum cost of $1 attached. However, the fee will reflect a maximum of 1% of the trade’s total value.²
Options, Futures and Mutual Funds all have equal costs for both account types. Options trades carry a fee of $0.65 for every contract involved, whereas futures trades are charged $0.85 per contract, and the mutual funds come in at $14.95. With mutual funds, you could face a charge that translates to 3% of the total transaction value – if this is less than $14.95. If that’s not the case, then $14.95 is the flat fee.²
|IBKR Lite||IBKR Pro|
|Stocks||$0²||$0.005 per share (minimum $1 and maximum 1% of trade value)²|
|ETFs||$0²||$0.005 per share (minimum $1 and maximum 1% of trade value²)|
|Options||$0.65 per contract²||$0.65 per contract²|
|Futures||$0.85 per contract²||$0.85 per contract²|
|Mutual Funds||$14.95 or 3% of value per transaction (whichever is less)²||$14.95 or 3% of value per transaction (whichever is less)|
Each month, you’re allowed one withdrawal without any additional fees attached. Once this has been used up, there will be fees applied for the rest of the month. So, if you want to make a withdrawal, it makes sense to do it all at once. This will help to keep your costs as low as possible in the long term and your profit margin rates will be higher.
Once you have carried out your free withdrawal, then depending on the method you use, you’ll be charged between $1 and $10. If you use BACS/GIRO/ACH/EFT/SIPA for withdrawals, there will be a $1 fee, while a check costs $4 and wire transfers are $10.³
Obviously, the check takes the longest to process as it has to be sent out to the trader, and then it will take further time to be cleared. The other methods tend to be resolved within three business days, but in some cases, it can take up to five business days for the funds to clear.
Once you’ve withdrawn your money from Interactive Brokers, you’ll want to find an easy-to-use service to store your funds. This is where Wise comes in. Not only is it safe and secure, but it also allows for exchanges between more than 55 currencies to be carried out quickly and safely. Send money abroad with low and transparent fees using the mid-market rate – and save up to 7x on fees.
|Using Wise with your Interactive Brokers account is one of the best ways to ensure you always have convenient access to your investment funds – and it takes just a couple of minutes to open a free account.|
Interactive Brokers have a large selection of different platforms available. There is a browser-based platform, a desktop download platform, a mobile platform as well as several APIs. To understand which platform is the best for you, we had a look at all of them in this review.
The browser platform serves as Interactive Brokers’ client portal, allowing full access to your IBKR accounts.It is generally the easiest platform to use. It doesn’t offer the full range of analytical tools that the desktop platform does, but you can place trades quickly and easily, as well as trawling your way through several performance trackers. This includes a profit and loss chart where you can see how you’re doing over specific time periods.
There is also an AI assistant that is on hand to provide any help that might be needed.
Experienced traders may look for something else, but for beginner traders the browser platform will be the best choice.
The Interactive Brokers mobile app is available on both iOS and Android. It’s one of the strongest mobile apps on the market, but it can be quite tricky for new traders to get to grips with – it’s essentially halfway between the browser and the desktop platform.
For experienced traders who want to keep in touch with the markets on the go, the app is a very powerful platform. It can also be linked to the browser and desktop platform. So, you’ll notice that any new metrics or watch lists that have been created, will automatically be sent over to them each time you log onto your computer.
The desktop platform is the most in-depth platform that Interactive Brokers has to offer. It allows traders to access a massive range of different tools and analytical charts. The other thing that is impressive about the desktop platform is that it is very intuitive. If you prefer to use certain tools more often than others, this will appear in your own personal list.
For beginner traders, this could be a bit of a stumbling block as it is quite complex. However, for professional or experienced traders, this platform provides the perfect environment to invest at a high level.
Interactive Brokers offers plenty of opportunities to get support. For example, the AI-driven FAQs section provides a high quality experience where traders can get answers to common questions.
If the FAQ doesn’t prove to be helpful, there are also email, live chat and telephone support options.
The telephone line is open 24/7, and an agent will always be around to tackle any queries via email. Calls are answered instantaneously, while it may take slightly longer to receive a reply to your email. This is likely during busy periods.
The live chat is available 24 hours a day from Monday to Friday. It’s closed on Saturdays, and it can be used between 13:00 and 19:00 Eastern Time (US) on Sundays.
Contact Interactive Brokers’ customer support through the following channels:
|Phone||1 (877) 442-2757|
Interactive Brokers LLC: Document Processing
P.O. Box A3770
Chicago, IL 60690-3770 USA
Interactive Brokers has one of the largest selections of investment choices available. This ensures traders are able to cover almost every potential trading opportunity.
Trading fees are great. They are on the low side when compared to other brokers on the market.
Using the desktop and mobile trading platforms can be difficult. Beginner traders may need some time to adjust to these platforms, but it can also be tricky for more experienced traders.
Transfer and inactivity fees. If you make more than one withdrawal per month, then you’ll need to pay extra. Plus, if you’re not using your IBKR Pro account frequently enough, you’ll need to pay inactivity fees.
Interactive Brokers provides traders with many good features. There is the ability to trade with a wide range of different stocks, mutual funds, bonds and instruments. This makes it a great place if you like to keep a diverse portfolio.
While experienced traders will be blown away by everything that Interactive Brokers offers, beginners could struggle to get to grips with it. However, the huge range of educational materials on offer do help with this.
Overall, experienced and professional traders should gravitate towards Interactive Brokers. But – as far as our Interactive Brokers review is concerned – beginners might want to start out somewhere else.
It definitely is.It has one of the widest ranges of regulatory licenses on the market. Not only that, but it is licensed in every territory that it operates in, which means it has undergone all the necessary checks. This is to ensure the different financial regulators are satisfied that it acts in a safe way.
Interactive Brokers works hard to keep the information and money of traders safe. It has a number of fail-safes in place to ensure accounts are kept secure and money can’t be stolen.
Insurance has been arranged that covers each individual investor to a maximum of $500,000. There is also an extra policy from UK-based bank Lloyds that covers up to $150 million. This ensures that traders' money is completely protected.
- Account Minimums - Interactive Brokers
- Commissions Stocks, ETFs (ETPs) and Warrants - Interactive Brokers
- Other Fees - Interactive Brokers
All sources checked on 5 April 2021
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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