What are commissions?
We know that fees are among people's top concerns when selecting a broker; and so are commissions. But what exactly is the difference between fees and commissions?
In everyday conversation, commissions are fees that are paid as a percentage of some transaction. In a trading context, a commission would be a volume-based fee that you pay after each trade; for example, 0.1% of traded volume, or $0.01 per share etc. In actual reality, some brokers charge flat commissions or a mix of flat and volume-tiered commissions for trading.
The types of fees that brokers charge for trading and what they’re called also depends on the asset type. For example, in the case of forex, often you pay only the spread and the financing rate (if you hold your positions for more than a day). Anything else that’s charged on top of that will be called a commission.
In the case of stock brokers like Interactive Brokers (see our detailed Interactive Brokers review here), the terms ‘ Interactive brokers fee’ and ‘commission’ are often used interchangeably when referring to the costs of trading. But at the end of the day, the most important thing is the amount you have to pay, not what it’s called.
So with that in mind, let’s see how Interactive Brokers compares to some of its competitors in terms of commissions and other trading fees.
| Interactive Brokers | Saxo Bank | DEGIRO | |
|---|---|---|---|
| Stock and ETF | Low | Average | Low |
| Forex | Low | Low | - |
| Fund | Average | Low | Low |
| Bond | Low | High | Low |
| Options | Low | High | Low |
| Futures | Low | High | Low |
| CFD | Low | Average | - |
Interactive Brokers commission and other fees
Interactive Brokers trading commissions
Interactive Brokers stock and ETF commissions
Interactive Brokers stock and ETF commissions are low. When trading US stocks, the commission is $0.005 per share or $1, whichever is higher. The commission is capped at 1% of trade value. US clients choosing the IBKR Lite plan may trade US-listed stocks for free.
In the UK or major EU markets, you must pay a flat £/€3 commission if the trade value is less than £/€6,000, and a 0.05% commission for trades above this volume. Commissions are slightly higher in minor European and most Asia/Pacific markets.
| Interactive Brokers | Saxo Bank | DEGIRO | |
|---|---|---|---|
| US stock | $1.0 | $10.0 | $2.1 |
| UK stock | $3.7 | $9.9 | $3.4 |
| German stock | $3.2 | $10.7 | $5.2 |
| Indian stock | $0.20 | - | - |
Stock and ETF commissions are calculated for a $2,000 trade
Interactive Brokers forex commissions
Interactive Brokers forex commissions are low, though not necessarily the best on the market. For trading forex, Interactive Brokers applies a volume-tiered commission system - the more you trade during a month, the lower percentage you pay in commissions. For those with monthly trade value below $1 billion, it is 0.2 percentage points, or a minimum $2; for trade value of $1-2 billion, it is 0.15 percentage points or a minimum $1.50; and so on.
| Interactive Brokers | Saxo Bank | DEGIRO | |
|---|---|---|---|
| EURUSD benchmark fee | $14.8 | $13.7 | - |
| GBPUSD benchmark fee | $10.8 | $8.7 | - |
| AUDUSD benchmark fee | $9.0 | $10.4 | - |
| EURCHF benchmark fee | $4.9 | $1.0 | - |
| EURGBP benchmark fee | $12.8 | $11.6 | - |
Forex fees are calculated for a $20,000 trade using 30:1 leverage
Interactive Brokers fund commissions
Interactive Brokers fund commissions are mixed. Many US mutual funds are available for US clients commission-free (and the same applies to many non-US funds for non-US clients). For other funds, though, Interactive Brokers charges a hefty 3% commission, although it is capped at $14.95 per transaction.
| Interactive Brokers | Saxo Bank | DEGIRO | |
|---|---|---|---|
| Mutual fund | $15.0 | $0.0 | $4.2 |
Fund commissions are calculated for a $2,000 trade
Interactive Brokers bond commissions
Interactive Brokers bond commissions are low. Interactive Brokers charges a volume-tiered commission with a minimum amount. For example, US Treasury bond transactions below $1 million will cost 0.002% of face value or $5, whichever is higher.
| Interactive Brokers | Saxo Bank | DEGIRO | |
|---|---|---|---|
| US Treasury bond | $5.0 | $85.6 | - |
| EU government bond | $10.0 | $85.6 | $3.2 |
Bond commissions are calculated for a $10,000 trade
Interactive Brokers options commissions
Interactive Brokers options commissions are average, though slightly lower than at some direct competitors. The commission is volume-tiered, as it depends on the number of options contracts you trade each month. For those trading less than 10,000 contracts a month, the commission is $0.65 per contract for US stock or index options, with a $1 minimum. Trading index options in Europe or Asia is slightly more expensive.
| Interactive Brokers | Saxo Bank | DEGIRO | |
|---|---|---|---|
| US stock index options | $6.5 | $30.0 | $7.5 |
| US stock options | $6.5 | $30.0 | - |
| UK stock index options | $21.1 | $31.0 | - |
| German stock index options | $18.2 | $42.8 | $9.6 |
Options commissions are calculated for 10 contracts
Interactive Brokers futures commissions
Interactive Brokers futures commissions are low. Commissions vary considerably by market, but are invariably charged on a per-contract basis; sometimes there’s a minimum commission. US micro e-mini stock index futures, a popular contract type, cost $0.25 per contract.
| Interactive Brokers | Saxo Bank | DEGIRO | |
|---|---|---|---|
| US micro e-mini stock index futures | $2.5 | $40.0 | $7.5 |
| UK stock index futures | $21.1 | $37.2 | - |
| German e-mini stock index futures | $8.6 | $42.8 | $8.0 |
Futures commissions are calculated for 10 contracts
Interactive Brokers CFD commissions
Interactive Brokers CFD commissions are low. Trading US share or index CFDs costs $0.005 per share or $1, whichever is higher. CFD commissions in other markets are a bit more expensive. Share CFD commissions are volume-tiered, meaning you get a lower commission if you trade in sufficiently large volumes during a month. For example, the default commission for US share CFDs applies to those who trade less than $300,000 of share CFDs a month.
| Interactive Brokers | Saxo Bank | DEGIRO | |
|---|---|---|---|
| S&P 500 index CFD fee | $3.3 | $3.1 | - |
| Euro Stoxx 50 index CFD fee | $4.3 | $3.0 | - |
| Apple CFD | $1.1 | $10.1 | - |
| Vodafone CFD | $4.1 | $10.3 | - |
CFD fees are calculated for a $2,000 trade using 20:1 leverage for stock index CFDs, and 5:1 leverage for stock CFDs
Interactive Brokers commission and other fees
Bottom line
Interactive Brokers charges low trading commissions for all but a few asset types.
Unsure whether Interactive Brokers is the right broker for you? For a tailored recommendation, check out our broker finder tool. You can enter your country and it will narrow down the list of brokers to those that are available where you live.
Want to see how Interactive Brokers stacks up against brokers other than those highlighted above? We suggest you try our in-depth comparison tool.
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