Interactive Brokers Review 2024 | Pros, Cons & Key Findings (2024)

In this review of Interactive Brokers (IBKR), we provide an in-depth analysis of the broker’s features, strengths and weaknesses, to help you make informed decisions for your trading journey.

Regulation & Trust

IBKR continues to earn our trust as one of the most trusted brokers for several reasons:

• It’s one of the most established brokers with over four decades in the online trading industry and over 2 million clients.
• It’s got an excellent reputation for pricing transparency, security credentials and adherence to regulatory standards.
• It’s authorized by several green-tier regulators; the US Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC) and Financial Industry Regulatory Authority (FINRA), the UK Financial Conduct Authority (FCA), the Canadian Investment Regulatory Authorization (CIRO), the Monetary Authority of Singapore (MAS), and the Hong Kong Securities Futures Commission (SFC).
• It’s publicly traded on the NASDAQ, enhancing its transparency through routine audits, amongst other requirements.

Accounts & Banking

Trading Accounts

IBKR offers a market-leading range of accounts to cater to the diverse needs of traders and investors. Each account type has specific requirements, features, and benefits, so you should take some time to choose the one that best aligns with your trading objectives:

• Individual Account: A standard brokerage account owned and operated by a single individual. It allows for the trading of various financial instruments such as stocks, options, futures, forex, and more. It’s suitable for day trading.
• Joint Account: A joint account is owned and operated by two or more individuals, allowing them to trade and invest together. This type of account is often used by couples, family members, or business partners.
• Corporate Account: Designed for businesses, corporations, or other legal entities, a corporate account allows for trading and investing on behalf of the entity. It requires additional documentation to verify the business’s legal status and ownership.
• IRA Accounts: Only available to US clients, IBKR offers Traditional, Roth, and SEP IRA accounts for retirement savings. These accounts provide tax advantages and are subject to specific contribution limits and withdrawal rules outlined by the Internal Revenue Service (IRS).
• Trust Accounts: Trust accounts are designed for trustees to manage assets on behalf of beneficiaries according to the terms of a trust agreement.
• Advisor Accounts: These accounts are for registered investment advisors (RIAs) who manage portfolios on behalf of their clients. Advisors can access a range of tools and features to execute trades, manage client accounts, and monitor performance.
• Hedge Fund & Proprietary Trading Group Accounts: These are specialized account types tailored to the needs of hedge funds, proprietary trading groups, and other institutional clients. They offer advanced trading capabilities and institutional-grade services.

A complimentary demo account lets you practice trading strategies and familiarize yourself with the platform’s features and tools with $1,000,000 of virtual funds.

While you can access the same trading platforms and tools available with live accounts, news feeds can be delayed by up to 15 minutes in simulator mode.

Once you’re ready to start trading real money, there are more account types to choose from:

• Cash accounts: These are limited to entering long securities positions, long option positions, and covered short positions.
• Margin accounts: These enable you to purchase securities on margin, allowing for short security positions, futures positions, and naked options positions.
• Portfolio margin accounts: Similar to margin accounts, these permit the same positions but calculate margin requirements differently. While they may offer increased leverage, a minimum account balance of $100,000 is required. Additionally, foreign accounts may not qualify, limiting international trading opportunities with this account type.

For beginners who are unfamiliar with managing a margin account, opting for a cash account is advisable. Unlike margin accounts, cash accounts do not entail margin calls, and you are permitted only a brief period of time in margin violation before positions are liquidated.

The account opening procedure at Interactive Brokers is entirely digital, albeit somewhat intricate. Following online registration, my account verification took two business days, which is considerably longer than a few minutes or hours it typically takes me to open an account with another brokerage, such as Plus500.

Deposits & Withdrawals

Depositing and withdrawing is limited to bank transfers and Wise Balances, eliminating the option to use bank cards or major electronic wallets including PayPal or Skrill. Not only are these funding options restrictive, but your bank may also apply a wire transfer fee.

US-based traders are better served with a few extra options including ACH (Automated Clearing House), check, online bill payment, direct rollover (IRA accounts only), trustee-to-trustee (IRA accounts only), and debit card deposits via the IBKR debit card provided with Integrated Investment Management accounts.

Withdrawals are subject to withdrawal limits, should take around two business days, and include a maximum daily withdrawal of $50,000 and a maximum total withdrawal of $100,000 within five business days.

The first withdrawal of each calendar month incurs no charges, but subsequent withdrawals are subject to platform withdrawal fees, which currently amount to around $10, depending on your location. Check payments are also available in USD and they carry a $4 fee.

If you wish to receive funds in a currency other than your base currency, conversion rates apply, with rates matching those used for forex trading conversions.

To help reduce currency conversion fees, you can choose from 27 base currencies, which is considerably more than most other brokers. Of course, the variety of currencies accessible to you will depend on the specific legal entity with which you are onboarded.

Assets & Markets

IBKR continues to boast an almost overwhelming selection of markets, offering access to a diverse range of assets. From ETFs and bonds to more specialized options like warrants and structured products.

While its forex and CFD selection may not be as expansive as some competitors, the availability of products varies depending on the IBKR affiliate and your country of residence.

With access to approximately 150 exchanges worldwide, including its alternative services like Interactive Advisors – a blend of robo-advisory and social trading – there are ample options for diversification.

Additionally, IBKR has an Overnight Trading Hours service, giving you access to over 10,000 US stocks and ETFs nearly 24 hours a day, five days a week.

Also, there are fractional shares trading for both US and European stocks and ETFs, a welcome feature that enhances accessibility and flexibility for traders with smaller balances. This is a notable feature given that Interactive Brokers has historically best served advanced traders.

Fees & Costs

When it comes to costs, IBKR offers some of the most competitive forex spreads and fees. This is primarily because the majority of the broker’s clients consist of professional traders and institutions, necessitating the provision of low commission rates.

You can expect a low, fixed commission rate of $0.005 with a minimum of $1.00 on all products, including stocks, stock futures, options, futures options, forex bonds, and CFDs.

For European clients, there’s the option of a fixed-rate commission of 3 EUR/GBP for trades under 6,000 EUR/GBP in value, with the rate reducing to 0.005% for trades above this threshold.

IBKR employs a volume-based fee structure for stock trading, where fees are determined either per share or as a percentage of the trade value, with specified minimum and maximum thresholds. ETF trading fees mirror those of stocks.

On the downside, IBKR applies an exposure fee to a subset of high-risk margin clients, aiming to offset the costs associated with managing these accounts. The fee amount is determined through proprietary algorithms and varies based on individual circ*mstances and account activity.

It’s also worth noting that IBKR offers interest payments on cash balances, with rates reaching up to 4.83% for USD balances, provided you maintain a net asset value of $10,000 in your account. Beyond this threshold, interest is paid proportionally, with the maximum interest earned when the account value reaches $100,000.

There is no monthly inactivity fee, either – a bonus for casual traders.

The flagship Trader Workstation (TWS) platform offers a vast array of trading instruments ranging from ETFs and futures to cryptocurrencies like Ethereum. Compatible with Mac, Windows, and Linux systems, the TWS provides essential functionalities such as backtesting and setting trailing stop limits.

You can choose between the default Mosaic setup or access the Classic TWS for the original platform experience. Watchlists are supported for managing numerous asset classes, with the platform generating a summary of available securities.

Customization is key, with a staggering 338 different columns available for personalized watchlists. The downside is that many users – myself included – may find themselves overwhelmed by long lists of real-time quotes or securities, requiring careful navigation.

In terms of charting capabilities, TWS is based on TradingView and offers 155 different studies for technical analysis. While fewer than some competitors, such as TradeStation, the platform provides essential tools like trendlines, notes, and Fibonacci analysis. Historical trades, alerts, and index overlays further enhance the charting experience.

Additional features include an impressive selection of 63 different order types, catering to diverse trading strategies. The ‘Options Strategy Lab’ lets you create and submit simple and complex multiple options orders, with the ability to compare up to five options strategies simultaneously. Algo trading functionalities are also available within TWS.

The Mutual Fund/ETF Replicator is worth noting as it assists in finding lower-cost ETF alternatives to mutual funds, aligning with IBKR’s commitment to offering a wide range of instruments and markets.

Regarding MetaTrader compatibility, IBKR does not actively support MetaTrader 4 or MetaTrader 5 platforms, as it prioritizes promoting its proprietary TWS platform. While the broker doesn’t provide direct assistance on integrating MetaTrader software with its platform, third-party software solutions are available to bridge the platforms.

My biggest gripe with the TWS platform is that it puts features ahead of usability. The platform looks completely outdated, the amount of information on-screen is intimidating, and the frequent pop-up windows create an overwhelming feeling.

There’s no web version either, so you’re forced to download and install the full application, which is an annoyance if you trade on multiple computers.

Beginners may prefer IBKR’s mobile app or the streamlined IBKR Desktop app, both of which offer a more intuitive approach to trading. Sadly I couldn’t test the IBKR Desktop software because it’s not available to UK traders yet.

Research

IBKR offers a huge array of research tools, but it’s confusing how some tools are found within the trading platforms and others are on the web on your ‘Account Management’ page – there’s just no consistency with the user experience.

These tools include real-time and historical market data for various asset classes, as well as real-time news updates from leading financial news sources.

In particular, I found the fundamental analysis tools comprehensive for evaluating a company’s stock performance useful, as well as the economic calendar that helped me to track market-moving events.

Options analysis tools, research reports from financial institutions including Morningstar, trading ideas from TradingCentral, and portfolio analysis tools are also available to help evaluate options strategies.

An interesting tool is the ‘Market Buzz’ bubble, powered by Trading Central, which shows a visual representation of companies that are currently receiving attention. The size of the bubble corresponds to the frequency of mentions for a particular company. You can hover your cursor over a bubble to view the number of mentions and click on the bubble to explore details about the selected asset.

The standout tool for me is ‘PortfolioAnalyst’ which offers a comprehensive financial management system for both institutional and individual investors. This software streamlines the consolidation, tracking, and analysis of all financial accounts, ranging from checking and savings to debt and annuities.

Once you’ve linked your accounts, you can view a detailed overview of your entire financial landscape. PortfolioAnalyst provides a thorough portfolio checkup, encompassing total returns, risk assessments, and allocations across various categories such as geography, asset class, and sector. Additionally, socially conscious investors can assess their portfolio’s ESG ratings.

Education

Under the ‘Education’ tab on the broker’s homepage, IBKR provides a plethora of well-presented and free resources for learning about trading and investing.

For beginners, the IBKR Campus and the Trader’s Academy offer a wide array of informative written materials, video content, webinars, podcasts, and quizzes, with progress tracking. More experienced traders should find the traders’ insight and commentary helpful, and even the quantitative code news.

IBKR and industry experts also host daily webinars covering a range of topics such as platform and tools tutorials, options education, trading international products, and more.

All the content is professionally produced and will certainly help you to better understand asset classes, markets, currencies, tools, and functionality available on IBKR’s trading platforms.

Customer Support

IBKR offers multiple ways to get in contact with the company. For security-related issues like resets or security tokens, you need to phone the contact telephone number provided on the website.

Although phone support is available 24 hours a day, it may be challenging to reach during overnight hours due to the service shifting to foreign venues.

You should also expect standard wait times on live chat – available from within the trading platform or website – with occasional outages. If you don’t want to wait for a live agent, you can try your luck with an automated ‘iBot’. If you’re not in a rush, there’s a secure message center available from within the trading platform or website for sending inquiries.

Fortunately, chat rooms and forum personnel are relatively prompt and helpful. They can provide information on account promotions, assist with upgrading to a margin account, and direct you to useful research and user guides. Additionally, they offer guidance on viewing interest rates and recent trade history.

Overall, while there are multiple means of contacting IBKR, wait times can be lengthy, which is frustrating if you have an issue that’s preventing you from trading.

Should You Trade With Interactive Brokers?

IBKR enables trading on a global scale and offers exceptionally low commissions and competitive spreads. It also distinguishes itself with its extensive array of assets, tools, research, global market access, and educational materials. In fact, individual and professional investors will struggle to find a more all-encompassing platform.

While this breadth of products and services is undoubtedly advantageous, it will pose a challenge for beginner traders, as navigating through IBKR’s wealth of information and outdated trading platform may at times prove too overwhelming.

As a result, IBKR is most suitable for experienced traders with significant capital. Beginner traders should look elsewhere for a simpler, more intuitive trading experience with more flexible banking facilities.

FAQ

Is Interactive Brokers Legit Or A Scam?

IBKR is a legitimate brokerage firm that has been operating in the financial industry for over four decades. Additionally, IBKR is publicly traded on the Nasdaq stock exchange (NASDAQ: IBKR), further establishing its credibility and transparency.

Is Interactive Brokers A Regulated Broker?

Yes, Interactive Brokers is regulated by reputable authorities including the Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), and Financial Industry Regulatory Authority (FINRA) in the US. In the UK it is regulated by the Financial Conduct Authority (FCA). There are lots of other worldwide regulatory bodies overseeing IBKR, too.

Is Interactive Brokers Suitable For Beginners?

IBKR’s platform and features are way more complex compared to most other brokers, which could potentially be overwhelming for beginner traders. And while there are comprehensive educational resources and customer support, beginners may find the learning curve too steep.

Does Interactive Brokers Offer Low Fees?

IBKR has a competitive fee structure, offering low commissions and tight spreads across various asset classes. It charges commissions based on a tiered pricing model, where fees decrease as trading volume increases. Furthermore, IBKR offers a range of account types and fee schedules tailored to different trading preferences and account sizes.

Is Interactive Brokers A Good Broker For Day Trading?

IBKR is an excellent choice for day trading due to its advanced trading platforms, offering real-time data and customizable interfaces. With access to a wide range of assets including stocks, options, futures, and forex across global markets, skilled traders can capitalize on short-term opportunities. Competitive pricing and a variety of advanced order types further enhance the appeal for day traders.

Does Interactive Brokers Have A Mobile App?

The IBKR Mobile app, available for both iOS and Android devices, provides access to your IBKR accounts on the go so you can monitor portfolios, place trades, view real-time quotes and charts, and manage your account activity from your mobile devices. The app is relatively user-friendly and caters better to beginner traders than the TWS terminal.

Top 3 Alternatives to Interactive Brokers

Compare Interactive Brokers with the top 3 similar brokers that accept traders from your location.

1. IG – Founded in 1974, IG is part of IG Group Holdings Plc, a publicly traded (LSE: IGG) brokerage. The brand offers spread betting, CFD and forex trading across an almost unrivalled selection of 17,000+ markets, with a range of user-friendly platforms and investing apps. For 50 years, IG has maintained its position as an industry leader, excelling in all key areas for traders.
   Go to IG
2. CMC Markets – Established in 1989, CMC Markets is a respected broker listed on the London Stock Exchange and authorized by several tier-one regulators, including the FCA, ASIC and CIRO. More than 1 million traders from around the world have signed up with the multi-award winning brokerage.
   Go to CMC Markets
3. AvaTrade – AvaTrade is a leading forex and CFD broker, established in 2006 and regulated across 9 jurisdictions. Over 400,000 users have signed up with the broker which processes over 2 million trades each month. The firm offers multiple trading platforms, including MT4, MT5, and a proprietary WebTrader. 1250+ financial instruments are available for day trading, alongside a comprehensive education center and multilingual customer support.
   Go to AvaTrade

Interactive Brokers Comparison Table

Compare Trading Instruments

Compare the markets and instruments offered by Interactive Brokers and its competitors. Please note, some markets may only be available via CFDs or other derivatives.

Interactive Brokers vs Other Brokers

Compare Interactive Brokers with any other broker by selecting the other broker below.

	Visit	Interactive Brokers (IBKR) is a premier brokerage for experienced traders, providing access to 150 markets in 33 countries, along with a suite of comprehensive investment services. With over 40 years of experience, this Nasdaq-listed firm adheres to stringent regulations by the SEC, FCA, CIRO, and SFC, amongst others, and is one of the most trusted brokers for trading around the globe.
Interactive Brokers (IBKR) is a premier brokerage for experienced traders, providing access to 150 markets in 33 countries, along with a suite of comprehensive investment services. With over 40 years of experience, this Nasdaq-listed firm adheres to stringent regulations by the SEC, FCA, CIRO, and SFC, amongst others, and is one of the most trusted brokers for trading around the globe.