In this Interactive Brokers review I’ve taken the time to compare Interactive Brokers’ fees to similar brokers, as well as tested out their investment interface and tools, and gauged what you can expect from their customer service team. Read on to find out why I feel Interactive Brokers is most suited to active investors and why casual traders may still want to give this platform a test drive.
Interactive Brokers is a long established, low cost, global investment platform operating out of the US. There is little doubt that Interactive Brokers offers an excellent range of investments that can be accessed with either a tiered or fixed commission structure making this one of the cheapest trading platforms available.
However, there are considerations that the casual trader should take into account, including an inactivity fee which many competitor platforms have managed to scrap. Traders looking to maximise their portfolio within a tax wrapper, may also be deterred by the lack of ISA or SIPP available to UK residents.
Regardless, this trading platform continues to attract sophisticated investors looking to engage with the vast array of asset classes and advanced trading tools available on the platform.
I’ve personally downloaded their app and opened an account as I have done with all the other investment apps I have reviewed, in order to bring you the most comprehensive Interactive Brokers review on which to base your decisions.
This is a refer a friend link
Simple Investing, Simple Pricing.
£3 / €3 per trade
for Western European Stocks.
No added spreads, account minimums or platform fees
Investing in financial products involves taking risk. Your investments may increase or decrease in value, and losses my exceed the value of your original investment.
Who are Interactive Brokers?
Interactive Brokers is the largest online trading platform in the U.S. as calculated by volume of daily average revenue trades. They provide their services to both retail investors and professional traders on over 135 market destinations across the globe.
Interactive Brokers is also known by an abbreviation and NASDAQ symbol IBKR.
Who Owns Interactive Brokers?
Interactive Brokers was founded over 43 years ago by majority shareholder Thomas Peterffy who stepped down as CEO in 2019 but retained his position as Chairman of the Board of Directors.
Product Range Overview
Interactive Brokers are known for their extensive range of bonds and ETFs. Interactive Brokers offers everything the seasoned investor could possibly want including international trading in the following areas:
- Mutual Funds
- Structured Products
- Physical Metals
- Inter-Commodity Spreads
- Hedge Funds
This is about as diverse a range as you can hope to encounter from most brokers, especially when it comes to trading on an international scale with more than 135 international markets making up its global trading offering across 33 countries.
Not only this, Interactive Broker continues to expand its range on a regular basis in keeping with the demands of their clients and in 2020 Interactive Brokers introduced fractional shares to its growing portfolio of options.
Stocks and ETFs
At the time of this Interactive Brokers review they offered access to 78 stock markets from across the globe and a total of 13,000 ETFs. This is an unparalleled offering and includes the provision of penny stocks and fractional shares. Interactive Brokers offer fractional shares that are only available on the following stock exchanges: NYSE, NASDAQ, AMEX, ARCA, or BATs.
With 105 currency pairs Interactive Brokers have one of the largest selections available online.
Interactive Brokers were rated Best Online Broker for Mutual Funds by Benzinga and this seems like a title that is well deserved. With over 40,000 mutual funds from 400 fund families, investors can access funds from Allianz, Vanguard and Blackrock.
In keeping with all their other offerings, the selection of bonds at Interactive Brokers is extremely competitive. This includes the full suite of US government bonds as well as:
- 25,773 corporate bonds
- 1,023,647 municipal securities
- 20,249 CDs
Unfortunately the municipal securities are not available to UK residents, however, the selection without this is still impressive and search tools available here are extensive.
Options at Interactive Brokers do not disappoint with the wide range of options markets including names like Chicago Board Options Exchange and CME Group as well as more obscure markets.
With over 35 markets available at one of the lowest costs, Interactive Brokers are beating off most of the competition when it comes to trading futures.
As always when writing these reviews, I must remind traders that CFDs are complex instruments and that come with a high risk of losing some, or all of your money due to leverage. 57% of retail investors lose money when trading CFDs with Interactive Brokers so a decision to trade with CFDs should not be taken lightly.
At Interactive Brokers, you can trade CFD shares, index, metals and forex with low commission rates across the board.
UK residents can trade Bitcoin, Bitcoin Futures and Ethereum at Interactive Brokers via various stock exchanges including the Stockholm Stock Exchange, US OTC (Pink) markets, New York Stock Exchange, CME Group, and Chicago Board Options Exchange.
Again, I would like to remind investors of the high risk involved in trading volatile Cryptocurrencies.
The recently launched Impact Dashboard at Interactive Brokers provides scope for socially responsible investing. As this is an area that is quickly gaining momentum among online brokers, I was pleased to see Interactive Brokers keeping up with market demand with 13 categories to choose from that include principles such as clean air and water, gender equality and LGBTQ inclusion.
There is also the option to exclude investments based on 10 categories that have a negative impact such as hazardous waste production, corporate political spending or animal testing. This is about as comprehensive as you can get in this arena and there is plenty of choice for even the most discerning investor. The dashboard provides the means for investors to identify their personal investment criteria from 13 principles.
Another area that sets them apart from many of the competition is the robo-advisor arm offered at Interactive Brokers which allows investors to utilise their automated investment management service with as little as $100 initial investment. Whilst this is not intended to be financial advice, it is a handy little feature. Interactive Advisors provide access to a range of more than 70 portfolios containing a mix of stocks and ETFs. Investors can copy professional portfolio managers on an automated basis and select the manager that fits best with their investment style with a minimum starting investment of $5,000.
There are associated costs with this service, with management fees ranging from 0.08% to 1.5% which is fairly standard across the industry.
Interactive Brokers Demo Account
Interactive Brokers offers a demo account that gives investors free access to all the available platforms at Interactive Brokers without any risk to your personal funds which is always a welcome addition to any platform offering. Perhaps most importantly, it gives you the chance to test drive the extensive trading tools available here.
Interactive Brokers Platform Review
Trading Interactive Brokers extensive list of assets can be done from two main platforms, the Trader Workstation (TWS) and the Client Portal platform. The Trader Workstation is targeted at professional investors for reasons I will cover below. The Client Portal on the other hand is aimed at the retail investor market.
This certainly comes packed with an impressive array of features, however, investors who are just starting out on their investment journey will find it difficult to navigate and complex. The stand out features include the Mutual Funds Scanner, Bonds Scanner, Options Strategy Lab, Volatility Lab, Risk Navigator, Market Scanner, Strategy Builder and Portfolio Builder. This is a powerhouse of a platform for experienced investors with a full suite of tools.
This is the platform for the average retail investor and offers a much more user friendly experience whilst still supplying a fantastic array of features. From here you can effectively manage your portfolio as well as access watch lists, news, research, charting and trading tools. One thing that really stood out from the competition for me was the iBot, an artificially intelligent digital assistant who is on hand to help you navigate your way around, place orders and supply information. Whilst this is not intended as personal finance advice, it is a handy little feature that demonstrates Interactive Brokers’ commitment to technology.
Web Trading Platform
Even beginners should be able to successfully navigate their way around the web trading platform, as long as they remain on the Client Portal. In keeping with the international scope of Interactive Brokers, the platform is available in several languages and has a really intuitive and easy to use interface.
Finding your investments is very straightforward with a comprehensive search function on the top left right hand bar. Typing in the asset name you are looking for will quickly reveal the list of exchanges and products available.
For traders that wish to place an order, there are all the options available including
- Stop limit
- Trailing Stop
- Trailing Stop Limit
Whilst there are more order types available on the Interactive Brokers desktop platform, this will satisfy most investors and there is also the option to use several order time limits.
The usual alerts and notifications are all on offer as well as portfolio and fee reports providing you with a clear indication of your portfolio performance. I liked it that the fees you have paid are all displayed so you can account for this when calculating your profit and loss.
IBKR App Review – Mobile Trading Platform
The IBKR mobile app allows access to all the great functionality on the go. Data streaming is conducted in real time, however, only on one platform at a time which could be an issue for some traders. That being said, all the advanced trading tools were available with over 400 data columns, option exercise and spread templates. It’s definitely intuitive enough for trading on the go and even lets you deposit checks straight into your Interactive Brokers account.
Security has all been taken care of with a two-step login (I consider this a minimum) and biometric authentication. IBot is also available on the mobile app, ready to swing into action on your behalf.
Interactive Brokers offers mobile apps for both Android and iOS.
Desktop Trading Platform
As a retail investor you would be best to swerve the desktop platform which has been configured for professional traders and could be too complex for the average trader. This is the Trader Workstation with all the features and functionality that you would expect for this level of stock trading.
IBKR Research Tools Review
The market research available at Interactive Brokers ticks all the right boxes with analyst ratings, research reports, forecasts, and ESG ratings to name a few. There are plenty of news services from third party providers such as Reuters where you can gain access to fundamental data on over 30,000 companies plus over 5,500 analyst ratings. This is a comprehensive offering, with screeners and the ability to back-test past strategies as well as conduct portfolio analysis by asset allocation, asset class, geography, sector, industry and many other measures.
Most of the recommendations on the platform are free, although there are a few that will incur a small fee. They are provided by entities such as Thomson Reuters, Morningstar and Dow Jones free of any charge in real time.
For something a bit more comprehensive, traders can access tools such as Validea which provides analysis of a stocks potential with BUY/SELL/HOLD ratings as well as an overview of the historical ratings. Stock reports and ratings with Validea will cost $10.80 per month following a free trial for their basic package.
For investors looking for income statements, a dividend calendar, company profiles, financials and industry comparisons, there is a great selection of fundamental data on the client portal in the Fundamentals Explorer. This is all completely free of charge and provides scope to analyse and compare companies with their competitors for a more informed investment strategy.
It’s difficult to know where to start with all the advanced charting available. Lets just say that you will definitely find what you’re looking for and a bit more! You can open multiple charts, completely customise what you see, and select from over 120 technical indicators. On a negative note, I would say that this is quite complex, in both its breadth of information, and design, and may be a little confusing for the less experienced investor who may want to consider other brokers with a simpler offering.
If you like staying on top of investment news then you won’t be disappointed with what you can access at Interactive Brokers via their inhouse news domain, Traders Insight. Daily summaries, economic calendars and third party news is all part of the package.
Interactive Brokers Fees and Charges Review
Providing low cost investing is at the core of Interactive Brokers marketing efforts so it’s no surprise that the fees Interactive Brokers offer are low. However, their pricing structure is somewhat complex with two structures: tiered and fixed. For professional, active traders this low cost structure really stands up, however, the more casual trader should really take the time to consider elements such as the monthly inactivity fee should they fall below a certain monthly trading volume.
Commission free trades are available for IBKR Lite customers, however, residents outside of the US can only take advantage of this should they be introduced by a broker who has been approved for the plan.
Tiered pricing: There are two entities that make up the tiered pricing structure for trading costs – the stock exchange you are trading on and the monthly volume of trades you conduct. Stocks, ETFs and Warrants can all be traded at 0.05% of the total trade value however, the more you trade, the lower your commissions will be. This is a beneficial structure for clients who trade frequently.
Fixed Pricing: For UK residents this is the equivalent of a £6 flat for trades up to £50,000 in value. There are some caveats to this which are outlined in the table below:
|FIXED||MINIMUM PER ORDER||MAXIMUM PER ORDER|
|Up to GBP 50,000 Trade Value||GBP 6.00||GBP 6.00||GBP 6.00|
|> GBP 50,000 Trade Value||
GBP 6.00 + 0.05%
of incremental trade value > GBP 50,000
|GBP 6.00||GBP 29.00|
|LSE International Order Book and USD-denominated stocks||USD 0.05% of trade value||USD 5.00||None|
|EUR-denominated stocks||0.1% of trade value||EUR 4.00||EUR 29.00|
100 Shares @ GBP 50 Share Price= GBP 6.00
30,000 Shares @ GBP 2 Share Price= GBP 11.00
100 Shares @ USD 100 Share Price = USD 5.00
Why is Interactive Brokers So Cheap?
Interactive Brokers are one of the lowest cost platforms available in terms of price and therefore you may be wondering how they turn a profit whilst keeping consumer costs so low. One of the reasons for this is their non trading fees which I have gone into in more detail below.
The other reason they can afford to keep their fees so low is that their millions of customers generate revenue in the form of commission fees, which whilst they may be low, are significant in their volume. In fact Interactive Brokers process over 1 million trades every week day.
Non Trading Fees
There are some other fees to be aware of such as the previously mentioned subscription fee for market data which can cost between £1 – £10 a month as well as exchange and regulatory fees.
Inactivity fees to be aware of are:
- $20 per month for an account balance of less than $2,000
- $10 per month for an account balance of more than $2,000
- $20 per month if you don’t generate a minimum of $20 in commissions
These fees are all waived for the first three calendar months after opening an account with Interactive Brokers.
Somewhat uniquely, this structure changes for people under the age of 25 when the total charge is only $3 per month. The key takeaway from all this is that Interactive Brokers are a competitive offering for people who trade several times per month, however, more casual investors should look for cheaper alternatives.
Interactive Broker vs IG
One of Interactive Broker’s closest competitors when it comes to trading platforms in the UK space would have to be IG Investments, although it is important to point out that Interactive Brokers pull slightly ahead of the race when it comes to the sheer volume of investment options it offers. If you are interested in which of these options is cheapest, then that will depend on the number of trades you execute each month. You would have to be in the region of 20 trades per month for Interactive Broker to come in cheaper, any less than this and IG would be the most cost effective solution.
|Share Trading: 0-9 Deals/ Month||(trade value x .0005)||£3 to £8|
|Share Trading: 10-19 Deals/ Month||(trade value x .0005)||£3.00|
|Share Trading: 20+ Deals/ Month||(trade value x .0005)||£3.00|
|Annual Custody Fee: £0 – £250,000||0%||£96 (can reduce by trading)|
|Bonds – Government (Gilts) – Fee||0.1% (2Euro min)||N/A|
|ETFs – Fee||(trade value x .0005)||£8.00|
|Investment Trusts – Fee||£4.95||£8.00|
|Telephone Dealing Fee||N/A||£40.00|
Interactive Brokers Guide to Opening an Account
As a Financial Conduct Authority regulated platform, it is necessary for Interactive Brokers to do a quick assessment to ensure you fully understand the risks associated with trading and investing. You will therefore be required to complete a short questionnaire relating to this including providing some personal information, however this shouldn’t take longer than a couple of minutes and the results are used to gauge your trading experience.
This questionnaire will take the platform a few days to check, after which you will have full access to the trading platform. However, time spent waiting needn’t be wasted as at this stage you can still access the free demo account and start getting to grips with the features offered as well as the scope of investments at Interactive Brokers.
As well as the compliance questionnaire, you will need to supply a couple of ID documents including:
- Proof of Identity – such as passport or driving license
- Proof of address – recent utility bill or bank statement
This wasn’t the quickest or simplest account opening process we’ve been through, however it is all fully digital.
Interactive Broker Guide to Transferring Your Investments
Transferring positions and funds into Interactive Broker or out of Interactive Broker can be done via the Account Management section of the client portal. Simply select the Position Transfers or Fund Transfers page and request the transfer. There are six different methods to choose from, so how long you wait for your transfer to clear will be variable, however, Interactive Brokers suggest that under normal circumstances, transferring stocks to Interactive Broker will take between four and eight business days.
Interactive Broker Customer Service Review
Whilst Interactive Brokers have ticked off most methods of contact, I did find the customer service to be a little sluggish. You can use live chat, phone, or the message centre within the client portal which acts very like email. The range of supported languages is impressive however the fluctuating levels of support that I experienced really let it down. At times it was quick and the agent was able to answer our queries without hesitation, and at other times it was almost non-existent. This level of inconsistency seems to be reflected in their TrustPilot reviews with a rating of 3.1.
One of the things that is an advantage is that Interactive Brokers publish all their menu options on their website so you can check which option to press before making a call. This can help save time listening to all the options on a recording.
It is important to note that Interactive Brokers do not provide investment advice as part of their service although this is not unusual with online brokers.
Who is Interactive Brokers Suitable For?
It was very apparent to me that this platform is best suited to advanced traders who engage in active trading and would benefit from the vast array of advanced tools and research available at Interactive Brokers.
Is Interactive Brokers Good For Beginners?
For beginners, the web platform could be a feasible option, and there is a free demo account that could be used to get to grips with some of the more complicated aspects of the platform such as charting and research. However, when it comes to the IBKR mobile platform, I found the navigation and interface to be more complicated. The educational content on the site is worth considering and they do supply a fairly comprehensive Trading Platform Tutorial.
Important and useful information for IBKR – Interactive Brokers.
How to contact Interactive Brokers
There are several ways you can contact IBKR including;
- Telephone from the UK: +44 207-710-5695
- Live chat from within the Client Portal
- Message Centre located within Account Management
- Ask iBot
Customer Service is available 24/7
IBKR Registered office: Level 20 Heron Tower, 110 Bishopsgate, London, EC2N 4AY
How to withdraw money from Interactive Brokers
Withdrawing money from Interactive Brokers can be done via bank transfer by following these steps:
- Log into the Client Portal
- Select ‘Transfer & Pay’ followed by ‘Transfer funds’
- Click the ‘Withdraw Funds’ tab
- Select the currency you would like to withdraw in and your withdrawal method
- Fill out the form
- Submit your request
Withdrawals can be tracked in real time on the Client Portal, however, you should expect to wait for at least two business days. There is no transaction fee for your first withdrawal each month.
How to close your account at Interactive Brokers
Closing your Interactive Brokers account can be done once you have closed all your positions and converted any foreign currencies as follows:
- Log in to Account Management
- Select Manage Account > Settings > Close Account
At this point you simply need to supply the relevant information, including your reason for closing the account and click ‘Submit’.
IBKR Review Summary
There is a lot to like about the IBKR platform and they certainly stand out in what is fast becoming a crowded market for online platforms, if only for their vast array of global investment options. I was pleased to see they cater for novice investors as well as seasoned professionals with their free demo account and detailed research.
The dual commission structure which includes both tiered and fixed commissions makes them highly competitive in terms of cost for both active traders and casual traders, although the latter will want to be aware of the inactivity fee charged which kicks in for accounts that fall below $2,000 or generate less than $20 per month in commissions.
The big negative for me was the lack of tax wrapper in the form of an ISA or SIPP, although this isn’t a concern for all investors and outside of this the key takeaway is that Interactive Brokers offer a highly functional place from which to trade an extensive list of assets, at a considerably competitive cost.
In terms of security, Interactive Brokers have been in operation since 1978, which is a decent indication of the company’s longevity. They also offer negative balance protection, however this can vary depending on several factors so I would encourage investors to check the level of protection on the Interactive Brokers website.
In 2020, Interactive Brokers were fined by The Financial Industry Regulatory Authority and The Commodity Futures Trading Commission for failing to prevent money laundering, although they have since addressed this issue with their app.
It is important to remember that investing always comes with a significant level of risk when trading stocks, options, futures, currencies, foreign equities and fixed income products and past performance does not guarantee future results. However, Interactive Brokers keep all client funds in a segregated bank account in order to protect those funds.
Interactive Brokers FAQs
Is Interactive Brokers UK safe?
In short, yes, Interactive Brokers are safe because they are authorised and regulated by the Financial Conduct Authority in the UK, and the US Securities and Exchange Commission ensuring that all safety measures have been met.
Is Interactive Brokers trustworthy?
Yes, Interactive Brokers are long established as well as being regulated by several top-tier regulators. There are a lot of negative reviews on TrustPilot however, further investigation would suggest that these reviews have all come from the same person or entity as they all contain the same email address.
Are the fees Interactive Brokers offers competitive in the UK?
This very much depends on the volume of trading that you are likely to conduct each month, however, for advanced, active traders this is definitely a competitive offering
What happens if Interactive Brokers goes bust?
Interactive Brokers have been in operation since 1978 and are therefore very unlikely to go bust at any time. However, in the event this did happen, your money and assets would be transferred to a new provider. They are also authorised and regulated by the Financial Conduct Authority which means should the company go bust for any reason, you could be eligible for up to £85,000 of investor protection.
Is Interactive Brokers any good?
Yes, Interactive Brokers are an excellent, low cost option for professionals and frequent traders. Their trading fees, access to global markets and research and tools are stand out offerings in the industry. However, whilst I would encourage casual investors to try the demo account, the platform can be quite complex and there are better options available to investors who only conduct a certain number of trades each month.
How secure is my personal data and privacy with Interactive Brokers?
Your data is very secure at Interactive Brokers as they take all the relevant steps to protect your personal data and do not directly store your personal information and never track users when they cross from the IBKR website to third party websites.
Antonia is the Financial Editor at InvestingReviews.co.uk and brings a wealth of experience, having written for various industries over the past 10 years.
Her investment platform reviews, news, blogs and guides are meticulously researched, fact checked, and updated on a regular basis.