Does Interactive Brokers offer UK ISAs?
Yes, you can open a tax-free Individual Savings Account (ISA) at Interactive Brokers UK (IB) if you are a UK tax resident. You can open it as your first IB account, or in addition to your already existing IB trading account.
IB offers only stocks and shares ISAs, denominated only in GBP. As an advantage, fees, including Interactive Brokers trading fees in general, as well as those specific to ISAs, are low. In addition, these ISAs - held by IB's US affiliate - come with more generous investment protection than UK-based alternatives.
Does Interactive Brokers offer ISA accounts?
What is an ISA?
What is an ISA?
Just to recap: an Individual Savings Account (ISA) is a tax-free savings account for UK tax residents. You can deposit savings into your ISA up to an annual allowance, currently set by UK law at £20,000 for the 2022/23 tax year ending April 5, 2023.
There are several type of ISA's, including cash ISAs, stocks/shares ISAs or lifetime ISAs. Any trading profits, dividends or interest earned on assets held in ISAs are exempt from capital gains tax. To find out more, read our in-depth guide to ISAs.
What types of ISAs does Interactive Brokers offer?
Interactive Brokers offers only stocks/shares ISAs, including Junior stocks/shares ISAs opened on the behalf of children under 18. Cash ISAs or lifetime ISAs are not available.
Similarly to many other ISA providers on the market, IB's stocks/shares ISA is not a so-called flexible ISA. This means that you can withdraw money from your IB ISA without limitations, but it will count toward your annual allowance if you put it back in the same tax year. You are provided one free withdrawal per month.
IB's ISA account is a cash account type, meaning you cannot trade on margin. IB ISAs must be denominated in GBP.
IB ISAs are held by the company's US affiliate, Interactive Brokers LLC, which is regulated by the US Securities and Exchange Commission (SEC) and is a member of the US Securities Investor Protection Corporation (SIPC) compensation scheme. Because of this, assets in your IB ISA are protected up to the equivalent of $500,000 (including a cash limit of $250,000) in the case of broker bankruptcy. This is more than the £85,000 coverage available under the UK's Financial Services Compensation Scheme (FSCS).
How to open an ISA at Interactive Brokers?
If you do not yet have an account with IB, simply go to the broker's account open page and start the registration process. If you are eligible for an ISA (by age and tax residency) and you opt for a GBP-based cash account, the option to open a stocks/shares ISA will be shown to you.
If you already have an IB trading account, you need to log in to the Client Portal, open the user menu in the top right corner and click 'Settings'. Go to 'Account Settings' then 'Trading'; then click 'Open an Additional Account'.
What assets can I invest in, and what fees are charged?
You can invest in shares or other securities issued by companies (such as bonds), as well as in investment funds. Fractional shares are also available. You'll have access to about 30 exchanges worldwide, including the biggest US, UK, EU and Asian markets.
IB ISAs charge no annual fee and there is no minimum deposit, but there is a £3 minimum monthly activity fee (deductible from your actual trading fees if they exceed £3). Otherwise, IB's regular pricing schemes - where you can choose between a fixed or a tiered price plan - are available for ISA holders; trading fees under both plans are generally considered low.
If you want to buy an asset denominated in a currency other than GBP (e.g. a US stock), IB will automatically do the currency conversion for you at a relatively low cost of 0.03%.
You can deposit cash to your IB ISA via wire transfer only.
Can I transfer my existing ISA to Interactive Brokers?
It is possible to transfer a stocks and shares ISA from another provider to IB. To do this, you need to file a request with IB, which will then request the transfer from your existing ISA provider. Please note that not all asset types may be supported for such a transfer. In the case of unsupported asset types, you must first liquidate your positions and convert them to cash before a transfer to your new IB ISA can be made.
Interactive Brokers further reading:
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- How to withdraw funds from Interactive Brokers
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