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Interactive Investor fees explained

Aug 2019
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Overview of Interactive Investor fees and charges

Interactive Investor logo

When it comes to brokerage fees Interactive Investor shows a mixed picture: some fees are high but some are low. First you need to figure out your approach or you should use our questionnaire to be able to tell whether Interactive Investor fees are an advantage for you. Continue reading about Interactive Investor fees and charges to see if this is the right brokerage for you or a similar broker like Hargreaves Lansdown or Degiro is better for you.

Here's a high level overview of Interactive Investor's fees

Interactive Investor Fees snapshot
Assets Fee level Fee terms
US stock fee High Investor and funds fan fees: £7.99 per trade; super investor fee: £4.99 per trade
EURUSD fee - Not available
US tech fund fee - Not available
Inactivity fee Low No inactivity fee

Interactive Investor fees
Interactive Investor fees explained

Online brokerages in general charge much lower brokerage fees than traditional brokerages do - this is largely due to the fact that online brokerages' businesses can be much better scaled: From a purely technical standpoint it doesn't make that much of a difference for them if they have 100 or 5000 clients.

This is not to say however that they don't have any fees at all. They make money by charging you at various events for various rates. Usually you need to keep an eye on these 3 types of fees:

  • Trading fees - these are brokerage fees that you pay when you actually do a trade, i.e. buying an Apple stock or an ETF. What you pay is either a commission, a spread or financing rate. Some brokers apply all of these.
    • A commission is either based on the traded volume or it is fixed.
    • A spread is the difference between the buy price and the sell price
    • Financing rate or overnight rate is charged when you hold your leveraged positions for more than one day.
  • Non-trading fees. These occur related to some operations you make in your account, i.e. depositing money to your account, withdrawing money from it or not trading for an extended amount of time.

We compare Interactive Investor fees with its closest competitors, Hargreaves Lansdown and Degiro.

Interactive Investor fees
Interactive Investor trading fees

Interactive Investor's trading fees are mid-tier which means you need to pay special attention to asset classes with high trading fees.

Let's break down the trading fees into the different asset classes available at Interactive Investor.

Trading fees

Interactive Investor's trading fees are average.

Stock fees and ETF fees

Interactive Investor has average stock trading fees.

Stock fees of a $2,000 trade
Interactive Investor Hargreaves Lansdown Degiro
USA $11.7 $17.3 $0.6
UK $11.6 $17.3 $2.4
Germany $29.0 $17.3 $5.7

Fund fees

Interactive Investor fund fees are high.

A $2,000 fund buy fees
Interactive Investor Hargreaves Lansdown Degiro
USA tech fund buy - - $10.6
Europe stock fund buy $11.6 $0.2 $10.6

Bond fees

Interactive Investor has low bond fees.

Bond fees of a $10,000 trade
Interactive Investor Hargreaves Lansdown Degiro
USA - - -
Europe $11.6 $17.3 $11.5

Financing rates

Interactive Investor financing rates are .

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

Interactive Investor yearly financing rates
Interactive Investor Hargreaves Lansdown Degiro
Apple financing rate - 5.8% 4.3%
Vodafone financing rate - 4.0% 2.5%
EURUSD financing rate - 2.9% -
EURGBP financing rate - 2.9% -

Interactive Investor fees
Interactive Investor non-trading fees

When it comes to looking at all the non-trading fees Interactive Investor is a cheap broker. This means that they don't charge you a lot for non-trading related activities on your trading account, like withdrawal fee.

Non-trading fees include various brokerage fees and charges at Interactive Investor that you pay not related to buying and selling assets. Among some others, typical non trading fees are withdrawal fee, deposit fee, inactivity fee and account fee.

A high level overview of how Interactive Investor stacks up in non-trading fees
Interactive Investor Hargreaves Lansdown Degiro
Withdrawal fee $0 $0 $0
Deposit fee 0 0 0
Inactivity fee No No No
Account fee Yes No No

Interactive Investor fees
Interactive Investor deposit fee

Deposit fees are applied when you send money to your trading account from your bank account. Usually brokers don't charge money for that and Interactive Investor is not different: you will see the exact same amount on your brokerage account that you sent by any of the deposit methods Interactive Investor offers.

Interactive Investor deposit methods
Interactive Investor Hargreaves Lansdown Degiro
Bank transfer Yes Yes Yes
Credit/Debit card Yes Yes No
Electronic wallets No No Yes
Deposit fee 0 0 0

Interactive Investor fees
Interactive Investor withdrawal fee

Unlike the majority of the online brokers we have reviewed Interactive Investor does not charge a withdrawal fee. This means that you'll see the same amount of money on your bank account that you transferred from your brokerage account.

Interactive Investor withdrawal fees and options compared
Interactive Investor Hargreaves Lansdown Degiro
Bank transfer Yes Yes Yes
Credit/Debit card Yes Yes No
Electronic wallets No No Yes
Withdrawal fee with bank transfer $0 $0 $0

Interactive Investor fees
Interactive Investor inactivity fee

Interactive Investor does not apply an inactivity fee which is great because your account will not be charged even if you do not trade for a longer time period (months or years).

AUTHOR

Gergely Korpos
Gergely Korpos
Co-founder, CPO
Gergely's aim is to bring more clarity into personal investing. He has 10 years of experience in financial markets with GE Money, KPMG and MOL. He concluded thousands of trades as a commodity trader and financial portfolio manager
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