Is Interactive Investor really free?

Interactive Investor does charge a commission for real stock trading on US markets, so in this sense it is not a free-to-trade broker. However, it might still be a reasonable choice for some of you, as there are many other aspects other than commissions that are important when you choose a broker. If you wish to stick with Interactive Investor though, then you will find the fees they charge below. Alternatively, you could check our article detailing the best zero commission brokers and how their apps scored in our test.

We should note that the payment-for-order-flow model, which is used by some zero-commission brokers to generate income (rather than relying on commissions), could potentially create a conflict of interest between you and your broker. This could result in trade execution (like routing your orders to specific market makers) that might be unfavorable for you under certain market conditions, especially when using market orders (as opposed to limit orders, which seem to be less affected).

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Interactive Investor fees
Overview of Interactive Investor fees and charges

When it comes to brokerage fees, Interactive Investor is a mixed bag. To see how they may affect you, first you need to figure out your approach to trading - i.e. whether you are more of a buy-and-hold investor or if you want to trade frequently; or what type of assets and in what volumes you'll want to trade. Alternatively, use our questionnaire to help you tell whether Interactive Investor fees are beneficial for you. Continue reading about Interactive Investor fees and charges to see if this is the right broker for you, or if a similar broker like Charles Stanley Direct or Hargreaves Lansdown might suit you better.

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

Interactive Investor Fees snapshot
Assets Fee level Fee terms
US stock fee Average "Investor" and "Funds Fan" fees: £7.99 per trade; "Super Investor" fee: £4.99 per trade
EURUSD fee - Not available
US mutual fund fees Low "Investor" fee: £7.99 per trade; "Funds Fan" and "Super Investor" fees: £3.99 per trade
Inactivity fee Low No inactivity fee

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Interactive Investor fees
Interactive Investor fees explained

Online brokerages in general charge much lower brokerage fees than traditional brokerages do - this is largely because 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 5,000 clients.

This is not to say, however, that they don't charge any fees at all. They make money by charging you various rates for various actions or events. Usually you need to keep an eye on the following three types of fees:

  • Trading fees - these are brokerage fees that you pay when you actually carry out a trade, like buying an Apple share or an ETF. What you pay is either a commission, a spread or a financing rate. Some brokers apply all of these.
    • A commission is either fixed or based on the traded volume.
    • A spread is the difference between the buy price and the sell price.
    • A financing rate or overnight rate is charged when you hold your leveraged positions for more than one day.
  • Non-trading fees. These are usually related to some operations you carry out in your account, such as depositing money, withdrawing money, or not trading for an extended period.

We compare Interactive Investor fees with its closest competitors, Charles Stanley Direct and Hargreaves Lansdown.

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Interactive Investor fees
Interactive Investor trading fees

Interactive Investor's trading fees are mixed, which means that some asset classes come with high trading fees - be sure to check these carefully.

Let's break down trading fees according to 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 Charles Stanley Direct Hargreaves Lansdown
US stock $10.4 - $15.5
UK stock $10.4 $15.0 $15.5
German stock $26.0 - $15.5

Fund fees

Interactive Investor fund fees are low.

Fees of a $2,000 fund purchase
Interactive Investor Charles Stanley Direct Hargreaves Lansdown
Mutual fund $10.4 $0.0 $0.0
EU mutual fund $9.6 $0.0 $0.0

Bond fees

Interactive Investor has low bond fees.

Fees of a $10,000 bond trade
Interactive Investor Charles Stanley Direct Hargreaves Lansdown
US Treasury bond - - -
EU government bond $10.4 - $15.5

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Interactive Investor fees
Interactive Investor non-trading fees

When it comes to non-trading fees, Interactive Investor is a rather cheap broker.

Non-trading fees include various brokerage fees and charges at Interactive Investor that are not related to buying or selling assets. This can be a withdrawal fee, deposit fee, inactivity fee or account fee.

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

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Interactive Investor fees
Interactive Investor deposit fee

Usually, brokers don't charge anything for deposits, and Interactive Investor is no different.

Interactive Investor deposit methods
Interactive Investor Charles Stanley Direct Hargreaves Lansdown
Bank transfer Yes Yes Yes
Credit/debit card Yes Yes Yes
Electronic wallets No No No
Deposit fee $0 $0 $0

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Interactive Investor fees
Interactive Investor withdrawal fee

Interactive Investor generally doesn't charge a withdrawal fee.

Interactive Investor withdrawal fees and options compared
Interactive Investor Charles Stanley Direct Hargreaves Lansdown
Bank transfer Yes Yes Yes
Credit/debit card Yes Yes Yes
Electronic wallets No No No
Withdrawal fee for bank transfer $0 $0 $0

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Interactive Investor fees
Interactive Investor inactivity fee

Interactive Investor does not apply an inactivity fee, which is great because your account won't be charged even if you do not trade for an extended period (like several months or years).

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Author of this article

Ádám Nasli

Author of this article

Ádám is a motivated finance expert with over two years of experience in banking and investment, and a professional degree in this field. He's eager to help people find the best investment provider for them, and to make the investment sector as transparent as possible.

Ádám Nasli

Broker Expert

Ádám is a motivated finance expert with over two years of experience in banking and investment, and a professional degree in this field. He's eager to help people find the best investment provider for them, and to make the investment sector as transparent as possible.

Everything you find on BrokerChooser is based on reliable data and unbiased information. We combine our 10+ years finance experience with readers feedback. Read more about our methodology

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