Interactive Brokers review 2024: Pros, cons and more
2024 Interactive Brokers review: Unveiling the pros, cons, and beyond. Explore the features and drawbacks of Interactive Brokers for your investment needs.
Our Verdict
Our Verdict
Interactive Brokers is a leading online brokerage firm founded in 1978 and headquartered in Greenwich, Connecticut, USA. It operates in numerous countries and serves clients worldwide. IBKR is known for its comprehensive suite of trading platforms, competitive pricing, extensive range of tradable assets, and advanced trading tools.
Pros
- Wide Range of Tradable Assets
- Low Costs and Competitive Pricing
- Advanced Trading Platforms and Tools
- Global Access and International Trading
Cons
- Inactive account fees
- Complexity for beginners
- Minimum balance requirements
Starting price
$128,60Investment and trading tools
YesBrokerage services
Interactive Brokers operates as a brokerage firmWho would benefit from selecting Interactive Brokers?
Interactive Brokers presents a superior option for professional investors, day traders, and anyone deeply committed to trading. Their flagship IB Trader Workstation stands out as one of the most comprehensive platforms available for research, tracking, and investment activities.
With highly competitive commissions and fees, including the lowest margin trading rates in our examination of the online brokerage sector, Interactive Brokers appeals to serious investors. They offer an extensive range of investment options, spanning nearly every major asset class, along with access to international markets in 33 countries. Serious investors will find nearly all their needs addressed and should be satisfied with the platform.
For novice and occasional traders, Interactive Brokers provides appealing features as well. IBKR Lite offers a more user-friendly platform tailored to beginners, offering commission-free trades on U.S.-based stocks, exchange-traded funds (ETFs), and mutual funds. The simplified Interactive Brokers mobile and web platforms are also easier to navigate compared to the desktop IB Trader Workstation, albeit with fewer features. Interactive Brokers' AI tool can assist with inquiries and trading decisions.
However, beginners may find Interactive Brokers somewhat daunting to navigate, particularly if they explore the IB Trader Workstation. The abundance of features and research tools can make it challenging to know where to start. While Interactive Brokers does offer a demo and numerous instructional resources, individuals seeking a simpler trading experience with minimal effort may find competing platforms more straightforward.
Interactive Brokers pricing structure
Interactive Brokers has established a reputation for offering extremely low commissions and fees, a finding corroborated by our research. They provide two primary programs: IBKR Pro and IBKR Lite. IBKR Lite caters more to individual, casual investors and offers unlimited commission-free trading for U.S. stocks, ETFs, and select mutual funds.
Conversely, IBKR Pro targets professional and institutional investors and imposes commissions, presenting both fixed and tiered pricing options. Under the fixed pricing structure, stock trades incur a charge of $0.005 per share, with a minimum fee of $1 and a maximum of 1% of the total trade value. Traders engaging in high volumes of trades monthly may opt for the tiered pricing system, where fees decrease as the total trading volume increases. Interactive Brokers employs both fixed and tiered commission systems for other investments such as options, bonds, forex, and mutual funds.
Interactive Brokers boasts the lowest margin rates among the online brokers surveyed. For IBKR Lite, margin trades of all sizes incur a flat 2.6% financing fee. The rates are even more favorable for IBKR Pro users, ranging from 0.75% to 1.6% depending on the borrowed amount, with larger transactions benefiting from lower rates.
Their additional account fees are minimal, with a nominal $10 charge for outgoing wires. Inactivity fees may apply to low-balance accounts that remain dormant for an extended period. Interactive Brokers does not levy many of the common fees, such as those for security reorganization or mutual fund redemption, often seen at other brokers.
While Interactive Brokers does not receive payment for order flow on IBKR Pro accounts, they may receive such compensation for IBKR Lite users. Payment for order flow involves a broker selling trade trends to market participants, potentially allowing them to exploit that information before executing trades. This discrepancy means IBKR Pro users can expect competitive trade processing, while IBKR Lite users, despite paying no commissions, may encounter a disadvantage.
Interactive Brokers stock trading fees
Fixed
| Fee per share | Minimum per order | Maximum per order |
| $0.005 | $1 | 1.0% of trade value |
Tiered
| Volume per month | Fee per share | Minimum per order | Maximum per order |
| <= 300,000 Shares | $0.0035 | $0.35 | 1.0% of trade value |
| 300,001 – 3,000,000 | $0.002 | $0.35 | 1.0% of trade value |
| 3,000,001 – 20,000,000 | $0.0015 | $0.35 | 1.0% of trade value |
| 20,000,001 – 100,000,000 | $0.001 | $0.35 | 1.0% of trade value |
| > 100,000,000 Shares | $0.0005 | $0.35 | 1.0% of trade value |
Interactive Brokers platform and technology
Interactive Brokers provides various platform options to cater to diverse user preferences. The primary platform is the desktop IB Trader Workstation, offering integrated securities trading, order management, charts, and watch lists. It features a comprehensive suite of investment tools, including the Options Strategy Lab, Volatility Lab, Market Scanners, and Portfolio Builder, facilitating investment idea testing, market research, and portfolio diversification.
The platform delivers real-time market news and research from reputable publications such as Reuters, Dow Jones, and Morningstar. It also allows for customizable chart creation with an extensive array of indicators and tools for research purposes. Moreover, the column customization tool enables tracking of numerous investment data points, such as market price and percentage changes, in a constantly updating custom spreadsheet format.
While the IB Trader Workstation offers an abundance of information and tools suited for institutional and highly experienced investors, it may pose a learning curve for some users. Despite offering a demo account for testing purposes, beginner and casual investors may find the vast amount of information overwhelming.
Thankfully, Interactive Brokers presents simpler alternatives. They offer a streamlined web portal directly accessible through their website, eliminating the need for downloads. This interface facilitates trade execution, portfolio tracking, and key metric monitoring, such as net liquidation value. Though it provides fewer research tools compared to the desktop version, it still enables access to market news and basic charting capabilities for technical analysis, albeit with fewer data points.
Additionally, there's IBKR Mobile, compatible with both Android and iOS devices. While offering most features available on the web service, it falls short of the desktop version in terms of functionality. Nevertheless, the mobile app permits trading across all available asset classes and provides access to similar research resources as other platforms.
To enhance trading assistance, Interactive Brokers offers an AI tool named IBot, capable of answering queries and executing specific tasks. It utilizes a predictive algorithm to suggest natural next steps, such as proposing a trade following an initial inquiry.
Interactive Brokers' assortment of offerings
Interactive Brokers emerged as the clear frontrunner in our analysis regarding the breadth of offerings. They provided nearly every type of investment we examined during our research. Notably, they offer fractional share trading, enabling investors to purchase less than a full share of stock based on their budget. One area where they excelled was their extensive array of international investment opportunities, granting access to markets in 33 countries.
The only services they lacked were advisory services to assist with portfolio planning. Additionally, they currently do not offer cryptocurrencies; however, they intend to introduce this feature by the end of the summer. Nonetheless, these are minor drawbacks, and the extensive range of offerings remains a key strength for Interactive Brokers.
Interactive Brokers' offerings encompass:
| Offering | Available? |
|---|---|
| ETFs | Yes |
| Mutual funds | Yes |
| Bonds | Yes |
| Forex | Yes |
| International markets | Yes |
| Stocks | Yes |
| Penny stocks | Yes |
Interactive Brokers research and education
Interactive Brokers presents a wide array of educational resources aimed at aiding individuals in commencing their investment journey. Firstly, they offer the Traders Academy, featuring numerous courses catering to traders of all proficiency levels. These courses range from introductory sessions on platform navigation and trading fundamentals to more advanced classes covering options utilization and in-depth exploration of Interactive Brokers' advanced research tools.
The online courses are complimentary and incorporate instructional videos, quizzes, and notes to facilitate learning. Additionally, they provide a Student Trading Lab designed to assist educators in teaching computer science and finance concepts to their students.
In terms of market research, Interactive Brokers offers a diverse range of materials, including webinars covering current market topics, market commentary, and insights from over 70 professional investors, including the chief strategist at Interactive Brokers. Moreover, they host a blog tailored to quant investors, focusing on subjects such as blockchain and AI.
These research and educational resources complement the trading tools and market news provided by the Interactive Brokers platform itself.
Interactive Brokers customer service and security
Interactive Brokers offers customer support via phone, email, and chat. Their phone and chat customer service operates around the clock on business days, with chat also available from 1 p.m. to 7 p.m. ET on Sundays. They commit to responding to emails within 24 hours during normal business hours. We conducted tests on each type of customer service by posing a range of questions, including inquiries about interest rates for margin trading and the availability of a daily newsletter.
Our experience with phone customer service was underwhelming. Out of eight calls made, we abandoned five after being kept on hold for over 10 minutes. When we did manage to connect, we received assistance and had our queries addressed. However, interactions felt akin to dealing with a call center based in India.
While phone customer service fell short, Interactive Brokers excelled in email and chat support. Of the six emails we sent, we received responses to five, with several answered promptly by a bot and others by human customer service representatives within a few hours. Chat support was even more efficient, with responses received within minutes, both from bots and humans.
Regarding account security, Interactive Brokers maintains robust measures, including firewalls, 128-bit encryption, two-factor authentication, and mobile security features. However, they do not offer voice recognition technology for customer service, a feature increasingly adopted by other brokers.
Interactive Brokers provides the standard $500,000 of SIPC insurance for account balances, along with additional coverage: $30 million for investment assets and $900,000 for cash, provided by Lloyd’s of London.
