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Updated on Thursday, August 5, 2021
Interactive Brokers offers low-cost and no-cost trading options for all types of investors. The company provides a wide variety of investment options, robust trading platforms and a wealth of research and educational offerings.
Interactive Brokers originally catered primarily to experienced trading professionals, and it still meets their needs well through IBKR Pro. And thanks to the addition of IBKR Lite, geared toward more casual and less-experienced investors, Interactive Brokers now has a broader reach. This option features commission-free trading of U.S. stocks and ETFs and more approachable versions of its tools.
|Sign-up bonus||None offered currently|
- What Interactive Brokers offers and who it’s for
- Interactive Brokers fees and costs
- Interactive Brokers investing tools and research
- Interactive Brokers user experience
- Interactive Brokers investor education
- Interactive Brokers security
- Alternatives to Interactive Brokers to consider
What Interactive Brokers offers and who it’s for
Across the board, Interactive Brokers gets top marks from professional and casual investors alike — in fact, it’s ranked as one of MagnifyMoney’s best online brokers. Instead of trying to make one product fit all investors’ needs, this broker provides two different tiers of service, each catered to a specific set of needs. IBKR Pro offers robust tools and multiple trading options for hands-on experienced investors, while IBKR Lite offers commission-free trading for stocks, a wealth of educational offerings and easy-to-use tools for casual and less-experienced investors.
- Two tiers of service: Instead of a one-size-fits all platform, Interactive Brokers provides two levels of service catered toward different types of investors. IBKR Pro provides all of the sophisticated tools that professional traders want, while IBKR Lite is much less intimidating and easier to use for more casual investors searching for a low-cost broker.
- Low/no commission: Through IBKR Lite, investors can make free, unlimited trades of U.S. stocks and exchange-traded funds (ETFs).
- Wide variety of trading options: Investors can trade everything from stocks and ETFs to mutual funds, futures and forex.
- Tiered pricing: Frequent traders can save money the more you trade.
- Confusing pricing: With free, fixed and tiered pricing, it may be confusing for some users to know exactly what you’ll be paying for trades.
- IBKR Pro may not be the best choice for infrequent traders: Those people who want all the functions and features of IBKR Pro but don’t trade frequently may end up paying more. This is because the tiered pricing provides savings the more you trade.
Interactive Brokers fees and costs
|Option trading fees||Fixed rate: $0.65 per contract, $1 minimum (other fees may be applicable)|
Tiered rate: Starts at $0.25 per contract, $1 minimum
|Stock trading fees||IBKR Lite: $0|
IBKR Pro: $0.05 per share, $1 minimum order (Tiered pricing offers discounts based on volume)
|Account fees||Inactivity fee: $0|
Annual fee: $0
Transfer fee: $0
Overall, Interactive Brokers’ costs may be hard to beat: There’s no minimum account balance required, and the broker doesn’t charge annual fees, inactivity fees or transfer fees.
Commissions at Interactive Brokers are low to nonexistent, too. IBKR Lite users can trade as many U.S. stocks and ETFs as they like for free. This is in line with many other online stock brokers that have gone to zero-commission trading, such as TD Ameritrade and TradeStation.
Those traders using IBKR Pro pay just $0.05 per share, but if you trade frequently, you may benefit from tiered pricing. For example, the per share price for 300,001 to 3 million shares is $0.002, while the price to trade more than 100 million shares is $0.0005.
Options trading is fixed at $0.65 per contract for IBKR Lite customers; this is fairly consistent with most online brokers like Fidelity. However, Interactive Brokers also offers tiered pricing discounts for those who trade 10,000 or more contracts per month starting at $0.25 per contract, while Fidelity’s fee remains the same no matter how many contracts are traded.
When it comes to trading other securities like futures, forex, bonds and mutual funds, pricing is tiered and/or fixed depending on whether you’re using IBKR Pro or IBKR Lite.
Interactive Brokers investing tools and research
Interactive Brokers provides real-time monitoring of markets. Users can easily see portfolio balances, margin requirements and what’s available for trading, among other items. Users can also create watchlists, alerts and view their profits and losses.
Interactive Brokers offers several tools to help users evaluate and mitigate risk. For example, the company’s risk navigator tool allows you to look at the risk of your overall portfolio and individual investments from a number of angles — then create hypothetical portfolios to see how various changes may affect them.
Interactive Brokers provides a variety of tools — both proprietary and third-party — for users to research companies and investments. For example, its fundamentals explorer tool lets users dig into various companies’ analyst ratings, ESG ratings, ownership, dividends, historical trends and much more. Traders’ Insight provides up-to-date industry information and analysis from leading experts, and it also offers access to a plethora of market data, most of which comes with an additional fee.
Interactive Brokers’ strategy builder lets users create and evaluate their investment strategies based on potential profit and other factors. Paper trading lets users try out various investment scenarios with real data in a hypothetical situation without losing any money.
Socially responsible investing advice
If you want to make sure you’re investing money in companies that align with your values, then you’ll appreciate Interactive Brokers’ impact dashboard. You can screen for issues that are important to you, and the dashboard will calculate a score to show how compatible your investments are with those views and help identify other investments, as necessary.
Interactive Brokers user experience
Interactive Brokers’ desktop platform, Trader Workstation (TWS), is the broker’s flagship product that allows users to research, chart, trade and track investments. Using TWS Mosaic, users can create orders, access watchlists and more. You can also stream real-time industry news and marketplace information, and customize the experience to best suit your needs.
IBKR mobile provides on-the-go access to all of Interactive Brokers’ robust tools, research and other features. It also includes some mobile-specific features, such as an order entry wheel, which helps you make timely, informed orders. The app also features options spreads, which provides templates and other options trading tools that are specifically designed for the mobile experience.
Interactive Brokers also offers a web-based client portal that doesn’t require a download. This provides a streamlined view of a user’s account and the ability to make trades and manage orders.
Those traders who are using both IBKR Pro and IBKR Lite can access all three platforms. However, only IBKR Clients have access to IBKR Web Trader (a scaled-down version of Trader WorkStation) and IBKR APIs, which allow users to build custom applications.
And should clients need help, Interactive Brokers is highly accessible. Phone support is available 24/7, and there’s also assistance via chat, email and an IBot FAQ feature, which provides answers to common trading questions. IBot chat can be used through the client portal and mobile app, as well as with Facebook Messenger and Alexa, so it can be accessed pretty much anywhere.
Interactive Brokers investor education
Interactive Brokers provides a good deal of investor education. For those people learning to use the broker’s tools, there’s Traders’ Academy, which provides free courses on how the various platforms work and investing topics. It also has webinars, videos, blogs and third-party content and analysis on a variety of industry topics that address the needs of investors at all levels.
For teachers, Interactive Brokers offers the Student Trading Lab, a free, online resource to help educate students about real-world trading.
Interactive Brokers security
- Account protection
- Two-factor authentication
- Digital security device
Accounts at Interactive Brokers are insured by the Securities Investor Protection Corporation (SIPC) for up to $500,000 (or $250,000 in cash). The company has an additional policy with Lloyd’s of London that covers accounts for up to an additional $30 million (futures and options on futures aren’t included). Finally, the broker has a sweep program that allows clients with more than $250,000 cash in accounts to obtain up to an additional $2.5 million of FDIC insurance, by disbursing it to other accounts while remaining under the FDIC’s threshold.
Two-factor mobile authentication
Interactive Brokers offers two-factor authentication through its IB key feature. Depending on your device, fingerprint and face ID may be an option for added security, as well.
Digital security device
Customers with accounts above $500,000 in value can request a digital security card, which uses a PIN number, a challenge code and a high count of possible code permutations. Once activated, it requires two-factor authentication.
Alternatives to Interactive Brokers to consider
Interactive Brokers seemingly has something to offer all investors, and its offerings are solid and well-regarded overall. However, when selecting any financial service, you should always evaluate your options in order to find the best fit for your unique needs. In doing so, you may want to consider other online brokers, such as TD Ameritrade or TradeStation.
|Average Cost Per Trade||Minimum Deposit||Best for...|
|Interactive Brokers||$0||$0||Experienced, professional investors as well as more casual investors|
|TD Ameritrade||$0||$0||Those who want the option of visiting a physical location to see their broker.|
|TradeStation||$0||$2,000 for TS Select; $0 for TS Go||Experienced, frequent traders|
Interactive Brokers vs. TD Ameritrade
Like Interactive Brokers, TD Ameritrade also provides a host of well-regarded tools that meet the needs of investors of all levels. TD Ameritrade also offers a wide variety of investment options, including futures and forex. Like Interactive Brokers, TD Ameritrade doesn’t charge an annual fee or an inactivity fee; however, it does charge a $75 transfer fee, while Interactive Brokers doesn’t.
While TD Ameritrade offers online brokerage services, it also has brick-and-mortar branches throughout much of the U.S. Since Interactive Brokers doesn’t have any physical locations, TD Ameritrade may be a better option for those who want more of a full-service broker experience.
Interactive Brokers vs. TradeStation
While Interactive Brokers offers something for traders at all levels, TradeStation is a better choice for frequent and experienced traders. TradeStation has limited free educational resources, and its tools can be challenging for beginners to learn. This broker also charges fees if minimum account activity levels aren’t met; the same isn’t true with Interactive Brokers.
For experienced traders, however, TradeStation is a solid option to consider, and its offerings are very much in line with those of Interactive Brokers IBKR Pro. TradeStation’s trading and analysis tools are robust, and it offers a wide range of investment offerings including everything from stocks and ETFs to cryptocurrencies. However, Interactive Brokers recently announced that it will soon offer crypto trading, too.
The “Find a Financial Advisor” links contained in this article will direct you to webpages devoted to MagnifyMoney Advisor (“MMA”). After completing a brief questionnaire, you will be matched with certain financial advisers who participate in MMA’s referral program, which may or may not include the investment advisers discussed.