Interactive Brokers: Experience And Reliability In A Single Broker

July 26, 2020
Brokers
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Interactive Brokers is owned by the publicly-traded company Interactive Brokers Group, Inc. and has been in business for 42 years offering a range of products such as stocks, options, futures, forex, bonds and funds from a single integrated account. In addition, the broker has several regulations such as the UK’s Financial Conduct Authority (FCA) and the US Securities and Exchange Commission (SEC).

Interactive Brokers is headquartered in Greenwich, Connecticut and has more than 1,400 employees at its offices in the United States, Switzerland, Canada, Hong Kong, the United Kingdom, Australia, Hungary, Russia, Japan, India, China and Estonia. Interactive Brokers is regulated by the SEC, FINRA, NYSE, FCA, and other regulatory agencies around the world.

It is true that Interactive Brokers is a broker that has good characteristics in several aspects. But, we strongly believe that Capital.com is the best online trading platform because is one of the easiest and cheapest ways to trade CFDs on equities, commodities, indices, Forex pairs and cryptocurrencies anywhere in the world. Capital.com offers you zero fees on intra-day trading, a lightning-fast web platform and their proprietary Negative Balance Protection. Also, Capital.com gives you the best chance at financial success with a clean, easy-to-use interface.

We analyzed hundreds of data points relevant to the costs, benefits and features of trading with Interactive Brokers and scored our findings on a 10-point scale across 10 distinct categories.
Fees 7
Signup Process 7
Minimum Deposit 10
Ease of Use 9
Deposit & Withdrawal Options 10
Customer Support 10
Asset Classes 10
Referral Program 8
Demo Account & Educational Resources 8
Safety & Regulation 10
Total 89

 What Is Interactive Brokers

Interactive Brokers is an online brokerage service provider headquartered in Greenwich, Connecticut that has more than 1,400 employees at its offices in the United States, Switzerland, Canada, Hong Kong, the United Kingdom, Australia, Hungary, Russia, Japan, India, China and Estonia.

The company has been in business for 42 years offering a range of products such as stocks, options, futures, forex, bonds and funds from a single integrated account. It is regulated by the SEC, FINRA, NYSE, FCA, and other regulatory agencies around the world.

Below we show you the list of countries where it is possible to open an account with Interactive Brokers:

Aland IslandsComorosHaitiMonacoSan Marino
AlbaniaCook IslandsHoly SeeMongoliaSao Tome and Principe
AlgeriaCosta RicaHondurasMontenegroSaudi Arabia
American SamoaCote D’IvoireHong Kong Special Administrative Region of ChinaMontserratSenegal
AndorraCroatiaHungaryMoroccoSerbia
AngolaCuracaoIcelandMozambiqueSeychelles
AnguillaCyprusIndiaNamibiaSingapore
AntarcticaCzech RepublicIndonesiaNepalSlovakia
Antigua and BarbudaDenmarkIrelandNetherlandsSlovenia
ArgentinaDjiboutiIsle of ManNetherlands AntillesSolomon Islands
ArmeniaDominicaIsraelNew CaledoniaSouth Africa
ArubaDominican RepublicItalyNew ZealandSpain
AustraliaEast TimorJamaicaNicaraguaSri Lanka
AustriaEcuadorJapanNigerSuriname
AzerbaijanEgyptJordanNiueSvalbard and Jan Mayen Islands
BahamasEl SalvadorKazakhstanNorfolk IslandSwaziland
BahrainEquatorial GuineaKenyaNorthern Mariana IslandsSweden
BangladeshEritreaKiribatiNorwaySwitzerland
BarbadosEstoniaKoreaOccupied Palestinian TerritoryTaiwan (Republic of China)
BelgiumEthiopiaKuwaitOmanTajikistan
BelizeFaeroe IslandsKyrgyzstanPakistanThailand
BeninFalkland Islands (Malvinas)Lao People`s Democratic RepublicPalauThe former Yugoslav Republic of Macedonia
BermudaFijiLatviaPanamaTogo
BhutanFinlandLebanonPapua New GuineaTokelau
BoliviaFranceLesothoParaguayTonga
Bosnia and HerzegovinaFrench GuianaLiberiaPeruTrinidad and Tobago
BotswanaFrench PolynesiaLiechtensteinPhilippinesTunisia
BrazilGabonLithuaniaPitcairnTurkey
British Indian Ocean TerritoryGambiaLuxembourgPolandTurkmenistan
British Virgin IslandsGeorgiaMacao Special Administrative Region of ChinaPortugalTurks and Caicos Islands
Brunei DarussalamGermanyMadagascarPuerto RicoTuvalu
BulgariaGhanaMalawiQatarUganda
Burkina FasoGibraltarMalaysiaRepublic of MoldovaUkraine
CambodiaGreeceMaldivesReunionUnited Arab Emirates
CameroonGreenlandMaliRomaniaUnited Kingdom
CanadaGrenadaMaltaRussian FederationUnited Republic of Tanzania
Cape VerdeGuadeloupeMarshall IslandsRwandaUnited States
Cayman IslandsGuamMartiniqueSaint HelenaUnited States Virgin Islands
ChadGuatemalaMauritaniaSaint Kitts and NevisUruguay
Channel Islands and JerseyGuernseyMauritiusSaint LuciaUzbekistan
ChileGuineaMayotteSaint Pierre and MiquelonVanuatu
ChinaGuinea-BissauMexicoSaint Vincent and the GrenadinesVenezuela
ColombiaGuyanaMicronesia, Federated States ofSamoaViet Nam

Interactive Brokers: Pros & Cons

Pros

  • The offer of financial instruments is wide and varied.
  • Educational tools are relevant.
  • It is a regulated broker.
  • The desktop version of the investment portal offers great customization features.
  • There is a demo account.
  • There are no fees for deposit or withdrawal of funds.
  • Listed on the stock exchange.

Cons

  • There are inactivity fees.
  • Must pay commissions for trading.
  • Deposit and withdrawal methods are limited.
  • Customization is very limited in the web and mobile versions of the investment portal.
  • The investment platform interface is complex.
  • The desktop version of the investment platform is complex for beginners.
  • No 24/7 customer service.
  • You must register with the broker to access the educational material.

Interactive Brokers Account Types

Interactive Brokers offers a wide variety of investment accounts. Below we present a table where you’ll find all you need to know to select the type of account that best suits your needs.

 IndividualJOINTTrustIRAUGMA / UTMA
Customer DescriptionA single account holder.Two account holders. It can be one of these types: co-owners with survivor rights, joint owners, communal property or full owners.A legally established entity in which the interest is held by one party for the benefit of another party.Individual retirement account, available only to US residents.A natural or legal person who manages an account on behalf of a minor until the minor reaches a specific age. Available to US residents only.
Account descriptionAssets held in a single account by a single account holder.Assets held in a single account with two account holders.A single account controlled by a trustee with trustors and grantors.Same as Individual account.Assets held in a single account managed by a single custodian user.
Access to trading and account managementThe account holder has access to all functions. You can add additional users with power of attorney.Both account holders have access to all functions. You can add additional users with power of attorney.One or more trustees have access to all functions.Same as Individual account.Individual (custodian) has access to all functions.
Here’s a breakdown of our 10 scoring categories, each scored out of 10 for a total of 100 points.

#1 Interactive Brokers Fees

With Interactive Brokers, you will not have to pay deposit or withdrawal fees. Also, Interactive Brokers does not offer a dormant or inactive account status. But, pro accounts are subject to a monthly activity fee of $10 USD ($20 USD  if the account balance is $2,000 USD or below).

Regarding trading commissions, Interactive Brokers offers you two types of commissions:

Fixed-Rate: you will owe a fixed value when trading. For example, you must pay in the case of each market a minimum of:

  • $1 USD in the USA.
  • $1 CAD in Canada.
  • $60 MXN in Mexico.
  • Between 4 EUR and 6 EUR in most European markets.

Staggered Rate: under this form of commission payment you could have a discount depending on the trading volume. But, you will always have to pay commissions because there is a minimum fee:

MONTHLY TRADE VALUE (EUR)FEE PER TRADE VALUE
<= 50,000,0000.050%
50,000,001 – 100,000,0000.030%
100,000,001 – 500,000,0000.020%
> 500,000,0000.015%

As you can see, trading commissions with Interactive Brokers can be quite low, but it still doesn’t beat not having any trading fees at all, which is why we don’t give this broker the best score in this category.

Interactive Brokers Fees Score: 7/10

#2 Interactive Brokers Signup Process

The process of opening an account in Interactive Brokers is completely digital and has no minimum deposit for most accounts. In general, the entire process of opening and verifying an account in Interactive Broker usually takes 2 business days.

You must upload the following documents to create your investment account:

Identity verification

  • Passport
  • National ID
  • Driver’s license

Residence Verification (Proof Of Address)

  • Bank statement
  • Utility bill
  • Driver’s license
  • Credit card statement

As we previously mentioned, to start operating within the Interactive Brokers platform, you must wait up to 2 business days. This can be a bit long for some, especially considering that being able to open an account quickly offers you the possibility of exploiting opportunities in the financial market.

Interactive Brokers Signup Process Score: 7/10

#3 Minimum Initial Deposit

In Interactive Brokers there is no minimum initial deposit for normal cash accounts, which is the ideal scenario for beginners of for traders that don’t have too much capital at their disposal. However, if you want to use a margin account to trade on leverage, you must have a minimum of $2,000 USD in your account. Either way, all brokers require hefty minimum balances on margin accounts, so the score is based only on the minimum deposit requirements of cash accounts. Therefore, Interactive Brokers scores a perfect 10 out of 10.

Interactive Brokers Minimum Initial Deposit Score: 10/10

#4 Ease of Use

The Interactive Brokers investment platform is very well designed and you will have a version for desktop, mobile and web. Please note that the web version has fewer features compared to the desktop version, which is frequently the case. In the desktop version, you will have access to a greater number of tools and analyses, but it is a little more complex than the web version.

Brokers Review: desktop and web

Interactive Brokers: App

The Interactive Brokers app will allow you to always be updated with your positions. But, keep in mind that it is very like the web version and you will not have all the tools you need to operate with complete peace of mind as in the desktop version. We think that the interactive app is a good tool to follow, but if you want to trade you should use the most complete version concerning your analysis possibilities. That is the desktop version.

Brokers Review: App

The perception of the users of the Interactive Broker app, in general, is regular. The app has a rating of 3.6/5 on Google Play and 3.5/5 on the Apple App Store.

In this aspect, Interactive Brokers loses a point because the apps could be better. Otherwise, this broker offers a solid trading platform for both beginners and professionals alike.

Interactive Brokers Ease of Use Score: 9/10

#5 Deposit & Withdrawal Options

Clients can hold multiple currencies in their Interactive Brokers account. Also, there are no surcharges for depositing or withdrawing funds, which is really great. Clients can generally deposit and withdraw funds in the currency of their residential country, the base currency of their account, or a common currency (USD, EUR, HKD, GBP, AUD, SGD, CHF, CAD or JPY).

Please note that Interactive Brokers will not automatically convert currency when placing a withdrawal. The currencies that can be held are:

  • Australian Dollar (AUD)
  • British Pound (GBP)
  • Canadian Dollar (CAD)
  • Chinese Offshore Yuan (CNH)
  • Czech Koruna (CZK)
  • Danish Krone (DKK)
  • Euro (EUR)
  • Hong Kong Dollar (HKD)
  • Hungarian Forint (HUF)
  • Israeli Shekel (ISL)
  • Japanese Yen (JPY)
  • Korean Won (KRW)
  • Mexican Peso (MXN)
  • New Zealand Dollar (NZD)
  • Norwegian Krone (NOK)
  • Polish Zloty (PLN)
  • Russian Ruble (RUB)
  • Singapore Dollar (SGD)
  • South African Rand (ZAR)
  • Swedish Krona (SEK)
  • Swiss Franc (CHF)
  • Turkish Lira (TRY)
  • United States Dollar (USD)

Deposit and withdrawal methods are limited at Interactive Broker. You can only use the following alternatives:

  • ACH initiated by bank
  • ACG initiated at IB
  • Bill Payment
  • Check
  • Wire

To make deposits, you must follow the following steps:

  • Log in to Client Portal/Account Management.
  • Select Transfer & Pay followed by  Transfer Funds and Deposit Funds.
  • Then, select the Currency of this deposit from the drop-down menu.
  • Select the “How to” button for the method you will be using to transfer funds.
  • Follow the remaining instructions provided to initiate the transfer with your bank.

Even though this broker doesn’t offer many popular transaction methods like e-wallets or credit cards to fund or withdraw from your account, it scores high for the diversity of currencies you can use, which is unparalleled.

Interactive Brokers Deposit & Withdrawal Options Score: 10/10

#6 Interactive Brokers: Customer Support

Interactive Brokers customer service is very fast but it is not 24/7. You will be able to communicate with the technical staff in 9 languages through the following alternatives

  • E-mail:
  • Live chat: on the web platform
  • Phone:
LocationNumberHours of operation (Time Zone)
United States1 (877) 442-2757 Toll free14:00 (Mon – Fri) – 02:00 (Tue – Sat) (Europe/Berlin)
United States1 (312) 542-6901 Direct dial19:00 (Sun) – 01:00 (Mon) (Europe/Berlin)
Canada1 (877) 745-4222 Toll free/ 1 (514) 847-3499 Direct dial14:00 – 23:30 (Mon – Fri) (Europe/Berlin)
Europe00800-42-276537 Toll free /+41-41-726-9500 Direct dial/ +44 207-710-5695 Direct dial United Kingdom09:00 – 18:00 (Mon – Fri) (Europe/Berlin)
Russia8-800-100-8556 Toll free/ +41-41-726-9506 (Russian)08:00 – 17:00 (Mon – Fri) (Europe/Berlin)
Hong Kong+852-2156-7907 Direct dial02:00 – 11:00 (Mon – Fri) (Europe/Berlin)
Australia+61 (2) 8093 7300 Direct dial00:30 – 10:00 (Mon – Fri) (Europe/Berlin)
India+91 22 61289888 Direct dial/ +91 22 39696188 Direct dial02:30 – 14:00 (Mon – Fri) (Europe/Berlin)
China+86 (21) 6086 8586 Direct dial03:00 – 12:00 (Mon – Fri) (Europe/Berlin)
Japan +81 (3) 4588 9700 Direct dial/+81 (3) 4588 9710 Direct dial (English)01:30 – 10:30 (Mon – Fri) (Europe/Berlin)

The technical support offers you several alternatives to communicate with the technical advisers. For this reason, Interactive Brokers has a high score in this category.

Interactive Brokers Customer Support Score: 10/10

#7 Asset Classes

Stocks

In Interactive Brokers, you can buy stocks in markets around the world. You can access the following markets:

U.SFranceItalyRussia
AustraliaGermanyJapanSingapore
AustriaHong KongLithuaniaSpain
BelgiumHungaryMexicoSweden
CanadaIndiaNetherlandsSwitzerland
EstoniaIsraelNorwayUK

Currency Pairs

You can buy currency pairs. For Example:

  • AUD/CAD
  • EUR/GBP
  • EUR/USD
  • SGD/JPY

Gold

Yes, it is possible to buy gold.

Bonds

Interactive Brokers allows you to trade fixed income instruments.

ETFs

Interactive Brokers, offers a wide variety of ETFs.

Crypto

It is possible to trade with this type of instrument.

Interactive Brokers Asset Classes Score: 10/10

#8 Referral Program

The trader referral program lets you send an invitation to somebody you know to open an account with them, and in return, you receive a bonus of up to $200 USD. There is no limit to the number of referral bonuses you can receive.

Trader Referral Payout Rules

Payouts to referring customers in the United States are subject to the following rule:

  • Each referred client must open an account using the invite link and maintain a balance of at least $10,000 USD for one year.

Payouts to referring customers in non-US countries are subject to the following rules:

  • The first payment of $100 USD will be sent when the referred account reaches $333.34 USD in commissions.
  • The second payment of $100 USD will be sent when the referred account reaches $666.67 USD in commissions.
  • You are eligible to receive the referral bonus up to one year from the opening of the referred account only if the commission minimums listed above are met.

To participate in the trader referral program: Go to Settings > Account Settings > Configuration > Trader Referral.

Interactive Brokers offers the possibility of earning through the referral program. But, the bonus could be higher and for this reason Interactive Brokers loses points in this regard.

Interactive Brokers Referral Program Score: 8/10

#9 Demo Account & Educational Resources

You can open a demo account in Interactive Brokers. The demo account allows you to practice investment strategies exactly as you would in the real market. You’ll have access to the same statistics, indices and other market information as if you were really trading. That way, you’ll know for sure when you’ve hit a home run or when you strikeout. It also lets you get to know the platform to make trading more natural once you start for real.

Brokers Review: Demo

Educational Resources

Interactive Brokers’ educational resources section is very good. Take into account that to create better investment strategies you must keep yourself in constant learning. Interactive Brokers offers you the following services:

Webinars

Interactive Brokers offers an extensive free webinar program. You will be able to access presentations on the functioning of markets around the world. Webinars are recorded and posted online, so if you can’t attend a live seminar, you can watch them whenever and wherever you want.

Interactive courses

You will be able to learn everything about stocks, options, futures and the currency market.

Traders’ Insight

It is a blog where you can get discussions, news webinars and many more educational resources.

The educational resources that Interactive Brokers offers is good. However, there are other brokers such as Capital.com that offer a much more complete and varied educational resources, as well as a more complete and limitless demo account.

Interactive Brokers Demo Account & Educational Resources Score: 8/10

#10 Safety & Regulation

Interactive Brokers has managed to have a solid performance in the investment industry. In this way, during the 42 years of service, the company has achieved a set of regulations that give it credibility:

  • It is a member of NYSEFINRASIPC and is regulated by the US Securities and Exchange Commission and the Commodity Futures Trading Commission.
  • It is a member of the Canadian Investment Industry Regulatory Organization (IIROC) and a Member of the Canadian Investor Protection Fund.
  • It is a member of the Luxembourg Investor Compensation Scheme (Système d’indemnisation des investisseurs, SIIL) and is regulated by the Financial Sector Supervisory Commission (CSSF).
  • It is licensed and regulated by the Australian Securities and Investments Commission (AFSL: 453554) and is a participant in ASX, ASX 24 and Chi-X Australia.
  • It is licensed and regulated by the Singapore Monetary Authority (License No. CMS100917).
  • It is regulated by the Kanto Office of Local Finance (registration number 187) and is a member of the Japan Securities Dealers Association and the Japan Financial Futures Association.
  • Finally, it is regulated by the Hong Kong Securities and Futures Commission and is a member of SEHK and HKFE

Interactive Brokers offers you great security when you invest your money because it is a broker that is regulated by a plethora of solid international and national organizations. For this reason, Interactive Brokers has a solid rating in this regard.

Interactive Brokers Safety & Regulation Score: 10/10

While researching 100+ of the world’s top brokers, we’ve noticed what works and what doesn’t from the customer’s point of view. That’s why our final test for any broker is to compare it to Capital.com, which scores 91/100 points across the 10 categories mentioned in this review.

Interactive Brokers Vs. Capital.com

One of the most relevant aspects when taking the best and most profitable investment ideas into practice is that you can have a platform that can add value to your strategies. Moreover, the platform should allow you to be confident when investing your money and provide the tools to do the best analysis while charging the lowest rates possible. Taking into account the most relevant aspects for an investor we prefer Capital.com over Interactive Brokers for the following reasons:

It has the best fees

Capital.com doesn’t charge any fees on any asset that you trade: stocks, commodities, cryptocurrency, indices, forex, ETFs, or anything else. It doesn’t charge monthly or annual fees, inactivity fees, or deposit or withdrawal fees, either. It also offers tight spreads on trades, unlike other zero-fee brokers, who make their money on wide spreads. Capital.com only makes money on the overnight fees on leveraged trades, so if you trade without leverage, you’ll never pay any fees.

It Provides More Educational Resources

At Capital.com you have more tools and options so you can study the market and create the best investment plans. For example, you will be able to access:

  • Free financial webinars.
  • Educational courses for traders.
  • Extensive market glossary.
  • Comprehensive CFD trading guide.
  • Cryptocurrency trading tutorial.
  • Investmate, Capital.com’s investor education app.

It’s Easier To Use

While it is true that Interactive Brokers’s investment platform is good, we think that your best option is Capital.com. It has a very stable platform, is easy to use and is intuitive. Furthermore, it has an interface that follows the best data processing standards for traders.

Capital.com: It has a very stable platform, is easy to use and is intuitive

Quick and easy account opening

If you want to trade now without having to wait for days struggling to verify your trading account, we recommend you visit Capital.com. You can open your account and trade in less than 20 minutes.

Interactive Brokers In Summary

  • Interactive Brokers is owned by the publicly-traded company Interactive Brokers Group, Inc. and has been in business for 42 years offering a range of products such as stocks, options, futures, forex, bonds and funds from a single integrated account.
  • The broker has several regulations such as the UK’s Financial Conduct Authority (FCA) and the US Securities and Exchange Commission (SEC).
  • Interactive Brokers offers a wide variety of investment accounts.
  • The company offers you two types of commissions: Fixed-Rate and Staggered Rate.
  • The process of opening an account in Interactive Brokers is completely digital.
  • The Interactive Brokers app will allow you to always be updated with your positions. But, keep in mind that it is very like the web version and you will not have all the tools you need to operate with complete peace of mind as in the desktop version.

Interactive Brokers does not offer many deposit and withdrawal options so you should take this aspect into account when making your decision. In contrast, we can affirm that Capital.com is a better choice because it offers you a large number of features that will make you more efficient when trading.

For example, with Capital.com you will have a free commission, an excellent investment platform, and a great number of payment methods. Also, Capital.com is a window to a large number of investment alternatives.

Capital.com is ideal for all types of investors. If you are a beginner or an experienced trader you will see that this wonderful broker is an ally that will allow you to fully exploit capital gains.

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