Interactive Brokers Review 2019

Interactive Brokers was founded in 1978 and it is one of the biggest US-based discount brokers. It is regulated by several regulators globally, including top-tier authorities like FCA and SEC. Interactive Brokers Group is listed on the New York Stock Exchange.

Interactive Brokers is considered safe because it has a long track record, is listed on a stock exchange, discloses its financials, and is regulated by top-tier regulators.

Recommended for advanced traders preferring low fees and can cope with a complicated trading platform.

Interactive Brokers pros and cons

Interactive Brokers has low fees. There are a lot of different product types in a lot of regions. It has great and diverse research tools, mostly provided by third-parties.

You can use only bank transfer for funding and withdrawing money. The account opening process is complicated. The desktop trading platform is not user-friendly and complicated.

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Interactive Brokers review
Fees 4 stars

Interactive Brokers has low trading fees and high non-trading fees. The fees are transparent.

To get things rolling, let's go over some broker fee lingo. You need to keep an eye on trading fees, financing rates, and non-trading fees.

• Trading fees occur when you trade. This can be commissions and spreads.
• Financing rates or overnight rates are charged when you hold your leveraged positions for more than a day. Leveraged position means that you borrow money from the broker to trade.
• Non-trading fees are like withdrawal fee or inactivity fee.

We compare Interactive Brokers fees with its peers, Saxo Bank and DEGIRO.

Let's start with the trading fees.

Trading fees

Interactive Broker's trading fees are low. Because of this, it is recommended for frequent trading too.

Its fee structure is transparent. You can choose between Interactive Brokers' fixed rate and tiered price plans

• Fixed rate plan typically charges a fixed rate per contract or share which covers all commissions and exchange fees.
• Tiered price plan charges the fees based on the monthly trading volume. Plus additionally exchange, regulatory and clearing fees. The more you trade, the lower commission you pay.

In this review, we tested the fix rate plan. Interactive Brokers charges commission and are usually volume based and have a minimum fee.

Stock fees and ETF fees

Interactive Broker has low stock trading fees.

Interactive Brokers stock trading fee calculation is volume based. Either per share or a percentage of the trade value with a minimum, and maximum also defined. ETF fees are same as the stock fees.

Forex fees

Interactive Brokers' forex fees are high, but it is less than Saxo's.

Interactive Brokers charges commission for its Forex trades. The commission depends on the monthly traded amount. Higher the trade volume, lower the commission and the minimum fee.

Fund fees

Interactive Brokers's US mutual fund fees are high, while the European fund fees are low. Saxo Bank does not provide mutual funds.

The fee structure is percentage based and can have a minimum and a maximum.

Bond fees

Interactive Brokers' bond fees are low, it is far cheaper than Saxo and a bit cheaper than DEGIRO.

Interactive Brokers applies a volume based pricing with a minimum fee. 

Options fees

Interactive Brokers' options fees are low. 

Interactive Brokers options fees are volume based, i.e. the number of contracts. 

Futures fees

Interactive Brokers' futures fees are low. They are almost the same as DEGIRO's, but much better than Saxo's futures fees:

Interactive Brokers futures fees are also volume based, i.e. the number of contracts. 

CFD trading fees

Interactive Brokers has low CFD fees. We compared the commissions of stock CFDs.

Interactive Brokers stock and stock index CFD fee calculations are commission based and have a set minimum.

Crypto fees

You can trade cryptos through futures and ETNs (exchange-traded notes):

• You can trade with Bitcoin futures on the CME and CBOE stock exchanges. The commission of one Bitcoin futures contract is $10 at the CME and $5 at the CBOE.
• Bitcoin and Ether ETNs are available on the Stockholm Stock Exchange. IB's trading cost here is 0.05% and the minimum is SEK 49.

If you want to learn more about crypto trading check out our crypto blogpost.

Asset management fees

Interactive Broker's asset management service is a mix of a fund and a robo-advisor. Beside the usual brokerage commissions there is an annual management fee ranging from 0.08 to 1.5% depending on your portfolio.

Financing rates

If you want to trade on margin and prefer to hold your positions long, financing costs can be significant.

Interactive Brokers financing rates are average. The financing rate is set differently for each asset types:

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Non-trading fees

Interactive Brokers has high non-trading fees.

The inactivity fee is $10 monthly which is high, especially compared other brokers:

*The withdrawal fee is different at the different currencies:

Interactive Brokers review
Account opening 3 stars

The account opening process is fully digital, but slow, and complicated.

Can you open an account?

Interactive Brokers is present in all continents. Hence you can most likely open an account. Only countries with really unstable political or economic backgrounds are excluded, like North Korea. 

Minimum deposit

Interactive Brokers minimum deposit is not the same for the different account types.

In 2018 the minimum deposit was lowered from $10,000 to $0.

$2,000 is still needed if you open a margin account. Margin account means that you trade with borrowed money, also known as leverage.

Account types

Interactive Brokers offers a lot of account types. There are two big groups of accounts:

• accounts for individual traders and investors
• accounts for institutions.

For individual traders and investors, you have eight types.

In our Interactive Brokers review, we tested the individual cash account.

How to open your account

The account opening process is fully online but overly complicated. For regulatory reasons, US brokers cannot open your account instantly. Interactive Broker's account opening is one of the fastest among US brokers. It usually takes 1-2 business days from registration to the account approval.

At first, you have to go through a 5-step registration process which takes roughly 30 minutes. We felt lost as the whole registration. It was complicated with confusing and unclear messages.

During this registration, you have to provide some personal information and there are trading experience questions.

In the end, you have to verify your identity and residency by uploading the required documents:

• Verification of identity: passport / national ID / driver's license
• Verification of residency: bank statement / utility bill / driver's license / credit card statement / other document

This is a standard process, in financial lingo, it’s called KYC (know-your-customer) and it is required to make sure you are truly identifiable.:

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Interactive Brokers review
Deposit and withdrawal 2 stars

Interactive Brokers offers a lot of base currencies and one withdrawal per month is free. On the flip side, only bank transfer is available.

Account Base Currencies

At Interactive Brokers, you can choose from 21 base currencies.

This is really wide if you compare it with DEGIRO's 9 base currencies, and only Saxo Bank can compete with its 32 base currency.

Why does this matter? Because if you fund your account in the same currency as your bank account, currency conversion fees won't be charged.

A convenient way to save on the currency conversion fees can be to open a multi-currency bank account. Revolut or Transferwise both offer bank accounts in several currencies with great currency exchange rates as well as free or cheap international bank transfers. The account opening only takes a few minutes on your phone.

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Deposit fees and options

Interactive Brokers deposit fees are free of charge.

Deposit options are limited, as neither credit or debit cards nor electronic wallets are available.

If you are from the US, you can also use

• ACH (automated clearing house) initiated at your bank/at IB
• Check
• Online bill payment
• Direct Rollover (IRA accounts only)
• Trustee-to-Trustee (IRA accounts only)

Bank transfer can take 2-3 business days to arrive.

You can only deposit money from sources which are on your name.

Withdrawal fees and options

Interactive Brokers applies a withdrawal fee if it is more than one per month. The first one is free per month. After that withdrawal fee differs by currency, but it is generally around ~$10 per withdrawal. 

You can withdraw money via bank transfer only outside of the US. If you are from the US, you can also use ACH transfer and check.

Interactive Broker quotes that if you withdraw before the daily cut-off time, the money is sent instantly. Then it is up to your bank when it arrives. In our test, we received Interactive Brokers withdrawal in 2 business days.

You can only withdraw money to accounts on your name. There are a $50,000 per day withdrawal restrictions if you don't have Secure Login System. 

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Interactive Brokers review
Web trading platform 4 stars

Interactive Brokers' web platform is simple and easy to use. Even beginners can easily get around. On the flip side, it can't be well-customized.

When you trade online at IB, you can choose between the Client Portal and the Webtrader. In this review, we tested the Client Portal since it is more user-friendly and easy-to-use than the Webtrader.

The Client Portal is available in many languages: English, German, Spanish, French, Italian, Russian, Chinese, and Japanese. The language can be changed within the platform.

Look and Feel

The Client Portal platform is very user-friendly and intuitive. You will easily get around even if you are a beginner. 

On the flip side, it is not customizable at all.

Login and Security

Beyond the normal online login system, you can protect your account with the so-called Secure Login System. This is a two-step authentication feature. You get by mail a plastic code card. It is certainly safe, however a bit outdated.

Search Functions

The search function is easy-to-use. It works as you would expect. You write the preferred asset's name, and you get a list. The search tab can be found at the upper right corner. 

Placing Orders

You can use only the order types. The more sophisticated order types are missing.

• market
• limit
• stop
• stop limit

If you are not familiar with the basic order types, read this overview.

You can also use some order terms:

• day order
• good till canceled

Alerts and Notifications

You can set alerts and notifications. We could set the alerts only through the chatbot. It is not intuitive.

We at Brokerchooser think that it would be much easier if you can set alerts when you select the product. 

Portfolio and Fee reports

Portfolio and fee reports are transparent at IB. You can see your performance on the Portfolio tab. It clearly shows what is your historical profit/loss balance and how much costs you paid.

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Interactive Brokers review
Mobile trading platform 4 stars

Interactive Brokers' mobile trading platform has lots of functions, even a chatbot. On the other side, the user-friendliness could be improved.

Interactive Brokers' mobile trading platform is available both for IoS and Android. In this review, we tested on Android.

The available languages are the same as at the web trading platform.

Look and Feel

The mobile trading app is handier compared to the web platform. On the other hand, both its look and user-friendliness lag behind the competitor mobile platforms. 

Login and Security

If you have a mobile phone with a fingerprint sensor, the app requires fingerprint authentication, a convenient and safe solution.

Search Functions

The search button is on the top, easy to reach. It is more user-friendly than its web platform equivalent.

After finding the asset you are looking for, you can choose from the asset types of the same underlying. For example, if you search for Apple, you can choose between Apple stock, futures, options, warrants and CFDs.

Next, you will be on the information and trading window:

• asset market information 
• an interactive chart with technical indicators
• related news
• some fundamental information
• summary of the latest analyst’s report
• the buy and sell buttons that transfer you to the order panel

Placing Orders

Just like the web trading platform, the order panel is highly advanced with lots of exotic order types. In fact, it has the same order types and terms.

Special feature - Chatbot

The most innovative and exciting function within the app is the chatbot. It is also available on the desktop platform, but not on the web platform.

You can use chatbot if you want to execute an order or close a position very quickly or you need basic information very fast.

The chatbot understands the basic commands, like “apple price” or “buy 1 apple share”. On top of this, you can also search for company fundamentals, like dividend yields or PE ratios. Some of the functions like the chart are also live within the chatbot.

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Interactive Brokers review
Desktop trading platform 3 stars

Interactive Brokers offers a desktop trading platform with advanced features, many customizable options, and advanced execution functions. However, the platform is not user-friendly and best suited for advanced trader.

Interactive’s desktop platform, the TWS is so advanced and has so many functions that even a separate review would not be able to cover it all. Anyhow, we tried to provide a comprehensive TWS summary.

In the desktop trading platform, you have literally everything you could desire for. Were you dreaming of replicating your favorite ETF? Wondered whether it is possible to trade via chatbots? Yep, with Interactive Brokers, you can do them.

The desktop trading platform is available on the same many languages as the web trading platform.

Look and Feel

To be honest, this is by far the most complex platform that we at Brokerchooser have ever reviewed. If you are an advanced and professional user, the platform is ideal. However, if you start trading now or you prefer long-term investments, you can hardly take advantage of all its features.

As a plus, the platform is highly customizable. You can set up your own templates.

Login and Security

It is the same as at the web trading platform. You can set a two-step authentication.

Search Functions

The weakest link of the platform is its search function. The search results are not structured and it is quite difficult to filter out the noise.

For example, if you search for an RWE stock that is a German utility provider, all the structured and derivative products are presented in the results and it is not easy to find the real stock.

The chatbot is a solution here. If you type in RWE, it directs you to the stock listed on the main stock exchange.

Placing Orders

The order functions are great, you have many many options. Some of them are designed for advanced, professional traders:

• market
• limit
• stop
• stop limit
• market on close
• market on open
• limit on close
• trailing stop
• trailing stop limit
• discretionary
• bracket
• forex hedge

If you are not familiar with the basic order types, read this overview.

The order terms also provide some specialties beyond the typical ones:

• day order
• good till canceled
• at the open
• immediate or cancel
• good till date/time
• good after date/time

Alerts and Notifications

Alerts and notifications can be set at the configuration panel. You can select email, SMS, or pop up notifications.

Furthermore, you can select if you want to get alert about price changes, your daily profit or loss, trade execution, etc.

Portfolio and fee reports

Reporting at the Interactive Brokers desktop trading platform is really transparent, just like the web-based platform.

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Interactive Brokers review
Markets and products 5 stars

At Interactive Brokers you can reach the most markets and trade with all product types. IB has the widest offering.

Interactive Brokers offers all product types from stocks to options. It also does a great job in markets you can access. Its stock, ETF, and bond coverage is exceptional. Only FX currency pairs and CFDs are not the highest. In addition, you can use IB's asset management service which is a mix of robo advisory and social trading.

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Stock and ETF

Interactive Brokers will give you access to more stock markets than its competitors. This includes the major stock markets, like NYSE or LSE, but also minor ones, like the Polish or the Mexican markets. Also, a wide range of penny stocks are available.

Besides stocks, you can trade with more than 20,000 ETFs at IB. This is also a much deeper offer than other brokers.

Forex

Interactive Brokers provides more than 100 currency pairs. This offer is really wide, only the Saxo Bank can compete with it:

Fund

There around 200 fund provider which great. You will find funds from the biggest fund providers like BlackRock or Vanguard and from smaller ones too. Only Swissquote offers more fund providers than Interactive Brokers.

Bond

Interactive Brokers gives you access to more than 100,000 bonds. You can see how deep this bond coverage is in comparison with Saxo and DEGIRO. The bonds cover both government and corporate bonds.

Options

Just like at the other products, Interactive Brokers has an extremely good option offer. You will find the biggest option markets, like CBOE or CME, but you can also reach to the smaller markets, like Korea Stock Exchange or Mexican Derivatives Exchange.

Futures

Interactive Brokers performs well in future product offer as you can access to 36 markets. This is also more than the average at competitor brokers. Similarly to options, you will find both the major and minor markets.

CFD

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 62% of retail investor accounts lose money when trading CFDs with IBKR (UK). You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Unlike the other asset types, Interactive Brokers has an average offer. You can only trade with stock and stock index CFD, and within these types IB is mid-range:

Crypto

At IB you can trade with Bitcoin and Ether ETNs and Bitcoin Futures

• Bitcoin and Ether ETNs are traded on the Swedish stock exchange. 
• Bitcoin futures are available on the CME and CBOE futures exchanges

If you want to know more about crypto investing, we recommend our crypto blogpost.

Asset management service

The asset management service enables you to copy professional portfolio managers, so you can automatically make the same trades as the professionals.

You can choose from many portfolio managers fitting you the most. You can easily find the real-time portfolio performance.

The minimum investment depends on the portfolio you want to invest in, the lowest investment is $5,000.

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Interactive Brokers review
Research 4 stars

Interactive Brokers research has endless possibilities. But, it is overcomplicated, hard to follow, and does not look nice.

The quality of the research is good and you always have the freedom to choose between third-party providers.

Recommendations

There are recommendations provided by third-parties, you can use many of them for free. However, there is also a wide range of paid research.  

Among the free researches, you can read big names, like Thomson Reuters, Morningstar or Dow Jones. 

Fundamental Data

Interactive Brokers provides a broad fundamental data selection. Just to mention a few of them, you can see the income statement for 6 years, dividend calendar, peer group companies.

Charting

The charting features are almost endless at Interactive Brokers. There are more than 100 technical indicators, however, just like the trading platforms, the charting tool is also not user-friendly.

In addition, there are many other technical tools. Just to mention the exotic ones:

• Stock/ETF benchmarker: you can benchmark your stock or portfolio versus a selected benchmark
• Mutual fund and ETF replicator
• Volatility lab
• A group of option analysis functions, like option probability lab
• Portfolio performance analyzer (VaR, Sharpe etc.)

News feed

You have access to

• News
• Daily summary
• Economic calendar

Just like the recommendations, the news is provided by third-parties as well.

You can get an informative daily summary of the markets through the Daily Lineup. Using this function, you can be informed about the hottest news, the latest analyst recommendations while earnings and economic calendar is also included. A pretty useful and quick start to your day.

You can use the economic calendar for checking the upcoming events. This feature can be used separately at any time from the menu. The design of the economic calendar can be improved.

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Interactive Brokers review
Customer service 4 stars

Interactive Brokers customer service was good. There are email, phone, and live chat too. The waiting time was short, and we got relevant answers. The design is ugly.

You can contact Interactive Brokers via:

• telephone
• email
• live chat

The customer service is available in several languages, namely in English, German, French, Italian, Spanish and Russian. 

In the 2018 test we had a lot of problems with the customer service. For example it had long waiting times. The funniest was when we received an answer email only after 4 days, and in Russian.

At the 2019 test we tested chat, email and call three times. Interactive Brokers customer service improved a lot. We did not encounter any major problems. Emails arrived within a day. The wait time for the live chat was rather long, more than three minutes, but after that it was smooth with relevant answers. The waiting time at the call was ~1 minute.

The design is ugly though. The message center, i.e. the"Inquiry Response Center" looks like a badly designed excel sheet.

We missed the 24/7 availability.

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Interactive Brokers review
Education 5 stars

Interactive Brokers offers quality educational tools. There are videos, webinar, paper account, and even a glossary.

You can learn in many ways:

• Demo/paper account
• Online courses
• Webinars
• Educational videos
• Platform tutorial videos
• Glossary and other

You can use the paper account for getting familiar with the platform. We think this is the best way to learn how the IB trading platform works.

In addition, you can choose from courses based on your trading skills. 

There is even a glossary which helps you to understand the unfamiliar words, expressions, acronyms. 

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Interactive Brokers review
Safety

Interactive Brokers is regulated by several financial authorities globally, including the top-tier SEC and FCA. Its parent company is listed on the New York Stock Exchange.

Interactive Brokers is a US broker established in 1978 serving clients from all over the globe. Is Interactive Brokers safe? To be certain, it is best to check two things: how you are protected if something goes south and what the background of the broker is.

How you are protected

The Interactive Brokers Group is an international broker operating through 7 different entities globally. This matters for you as clients from different countries belong to different entities and eligible for a different amount of protection:

*If you are from Europe, it is a little more complicated which investor protection amount you have. It depends on the product you trade: 

• If you trade with forex, CFDs, non-US stock index options, and futures, you are protected by the FCA's £50,000. 
• If you trade with stocks, bonds, funds, US stock index options, you are protected by the US investor protection, i.e. $500,000, with a cash limit of $250,000.

As you can see, it is not totally transparent. Our best advice is to ask the customer service from time to time about the protection amount of your actual portfolio.

Interactive Brokers provides negative balance protection. 

Background

IB's foundation dates back to 1978. During this more than 40 years, a lot of economic crisis occurred and IB is still on the top among the brokers. This is also a sign for you that Interactive Brokers is a safe broker.  

Interactive Brokers Group is the holding company of the sister companies. It is listed on the New York Stock Exchange which increases the transparency as it has to publish financial statements regularly. 

Being listed, being regulated by both the SEC and the FCA are all great signs for Interactive Broker's safety.

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Interactive Brokers review
Bottom line

IB is one of the biggest discount US brokers regulated by top-tier regulators. If you like low-cost trading and easily navigate on a really complicated platform, Interactive Brokers is for you. We mainly recommend IB for traders.

It has low trading fees, a wide range of product portfolio, and diverse research tools. 

On the flip side, only bank transfer is available for deposit and withdrawal. The account opening and the desktop platform are not user-friendly and complicated.

Interactive Brokers is definitely recommended if you want low fees, a lot of products and you are experienced to cope with a complicated platform.

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