Interactive Brokers Review 2024: Advanced Trading Features for Investors
Written by
John Csiszar
Edited by
Melanie Grafil
Commitment to Our Readers
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by Experts
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GOBankingRates Score
-
Account Fees and Minimums
5.0
-
Investment Selection
5.0
-
Platform
4.5
-
Usability
4.5
Pros
- No account fees or minimums
- No commissions for IBKR Lite users on stock and ETF trades
- Large selection of investment assets, including stocks, options, futures, Forex, metals, fixed income, ETFs, cryptocurrency, mutual funds and more
- Some of the lowest margin rates on the market
Cons
- Steep learning curves for new traders
- Uninvested cash up to $10,000 doesn't earn interest
Interactive Brokers Overview
Interactive Brokers Group has long occupied a unique niche in the online brokerage world. Originally developed for advanced traders, the firm has always had a comprehensive interface, chock full of market and trading information. Interactive Brokers opened its doors to more casual investors with the introduction of its IBKR Lite pricing plan. Here’s a look at the inner workings of Interactive Brokers.
Interactive Brokers was founded by Thomas Peterffy in 1978 to serve advanced traders looking for speed, price, size and diversity of global products. As of 2024, the firm has equity capital of over $14.7 billion. Interactive Brokers and its affiliates execute more than 2.35 million trades a day on over 150 global market destinations. Big changes came to the firm in 2019 when it introduced a new pricing plan for less active traders called IBKR Lite.
Interactive Brokers has impressive trading capabilities and low costs, receiving high marks overall. Here are some of its key features:
- No account minimums
- Rock-bottom margin rates
- $0 commissions on stocks and ETFs with IBKR Lite
- Extensive charting and research capabilities, especially for IBKR Pro users
Interactive Brokers at a Glance
Here’s a quick overview of the services and costs of Interactive Brokers:
| Feature | Key Details |
|---|---|
| Account Minimum | $0 |
| Stock and ETF commission | – $0 for IBKR Lite users – $0.0005 to $0.0035 per share for IBKR Pro users (volume discounts available) |
| Options commission | – $0.65 per contract for IBKR Lite – $0.15 to $0.65 per contract (volume discounts available) for IBKR Pro |
| Futures commission | – $0.85 per contract for IBKR Lite – $0.25 to $0.85 per contract (volume discounts available) for IBKR Pro |
| Commission-cree ETFs | Over 5,600 |
| Zero transaction-fee mutual funds | 19,000+ |
| Investment selection | – Stocks, options, futures, Forex, metals, fixed income, ETFs, mutual funds, hedge funds, robo portfolios – Cryptocurrency for eligible clients through Paxos Trust Company |
| Customer service | 24/7 phone lines via regional call centers, live chat, email and fax |
| Mobile app | Yes, with full functionality |
| News and research | – Educational webinars, videos and courses – Free and paid investment research available |
Thanks!
Interactive Brokers Key Features
Most online brokers offer similar services but with different interfaces and capabilities. Here’s a look at how Interactive Brokers delivers its product across various categories.
Account and Investment Minimums
Interactive Brokers has no account or investment minimums. This is especially helpful for new traders who may not have a large sum of money to start with.
Commissions and Fund Expenses
Commissions for IBKR Lite are just about as low as they can go. Interactive Brokers charges nothing for online equity and ETF trades and also offers more than 19,000 no-fee mutual funds.
For IBKR Pro users, the fees are advantageous for those that trade heavily. Stock and ETF trades range from $0.0005 to $0.0035 per share, with discounts on commissions available for those that trade higher volumes.
Usability
Fast executions, advanced charting capability and price improvement make Interactive Brokers a dream to use for advanced traders. However, all of these do-it-yourself features can be a bit much for newer investors. The IBKR Lite pricing plan makes the Interactive Brokers platform more user-friendly for the casual investor.
Mobile and Emerging Tech
Interactive Brokers has a mobile app that allows traders to access more than 150 markets worldwide. You can trade stocks, options, futures, Forex and more from the mobile app, just like you would on the desktop Trader Workstation. Advanced quotes and research also are available, offering more than 600 data columns.
Range of Offerings and Investment Selection
You’re likely to find nearly any type of investment you’d like to buy. The impressive range of options at Interactive Brokers includes the following:
- Stocks
- Options
- Futures
- Forex
- Metals
- Fixed income
- ETFs
- Cryptocurrencies
- Mutual funds
- Hedge funds
- Portfolios through Interactive Advisors, the robo-advisor affiliate of Interactive Brokers
Margin Rates
IBKR offers some of the lowest margin rates in the business–ideal for traders that regularly use leverage. Interactive Brokers uses the Benchmark Rate, which is based on the Federal Funds Rate, then adds a small percentage on top to set their margin rates.
IBKR Lite users are charged the Benchmark Rate + 2.50% APR. Whereas, IBKR Pro users are charged based on the loan balance, starting at the Benchmark Rate + 0.50% APR on margin loans. The higher your loan balance, the lower the rate. It’s important to note that interest is charged daily and accrued on a monthly basis.
Here are the current margin rates as of August 2024 (rates can change daily):
| Tier | Rate Charged: IBKR PRO | Rate Charged: IBKR LITE |
|---|---|---|
| 0 ≤ 100,000 | 6.830% (BM + 1.5%) | 7.830% (BM + 2.5%) |
| 100,000 ≤ 1,000,000 | 6.330% (BM + 1%) | 7.830% (BM + 2.5%) |
| 1,000,000 ≤ 50,000,000 | 6.080% (BM + 0.75%) | 7.830% (BM + 2.5%) |
| 50,000,000 ≤ 200,000,000 | 5.830% (BM + 0.5%)1 | 7.830% (BM + 2.5%) |
| > 200,000,000 | 5.830% (BM + 0.5%)1,2 | 7.830% (BM + 2.5%) |
Earn Interest on Cash Balances Over $10,000
When you’re in-between trades and need to park a large sum of cash, or if you simply want to keep your cash with Interactive Brokers, you can earn up to 4.83% interest on balances over $10,000 as a IBKR Pro user. When using IBKR Lite, you can earn 3.83% interest on balances over $10,000.
Customer Service
Interactive Brokers offers 24-hour phone customer service via regional Client Services Centers. It also offers a national toll-free customer service number, but hours are limited to 8 a.m. to 8 p.m. ET Monday-Friday and 1 p.m. to 7 p.m. ET on Sunday. Online chat is available 24 hours. Customers can also email or fax the company.
Costs
Costs are extremely low for Interactive Brokers compared with other platforms. In fact, for most investors, the most important cost of all — commissions — are zero for most trades. There are no account minimums or maintenance fees to worry about, either.
Active traders will also appreciate that IBKR Pro users get volume discounts on trading costs, including on options and futures trades.
How Interactive Brokers Stands Out
Interactive Brokers is designed from the ground-up for active and professional traders. With multiple trading platforms, tens of thousands of assets to trade, rock-bottom fees and margin rates, and outstanding customer support, Interactive Brokers is one of the best overall platforms for advanced traders. Combine that with the ability to bring almost every trading tool at your disposal on-the-go, along with a well-designed mobile app, and you’d be hard-pressed to find a more comprehensive trading platform.
Comparable Interactive Brokers Options
There are dozens of online brokers to choose from, but only a handful that offer a professional-level trading experience. Here are a few options that are comparable to Interactive Brokers:
Interactive Brokers vs Fidelity
Interactive Brokers and Fidelity both offer well-designed advanced trading platforms and low commissions on trades. Fidelity offers Active Trader Pro, an advanced trading platform with detailed charting tools, order types and market research. But Fidelity also offers a simple investment app for beginners, making it easier for new investors to get started.
Interactive Brokers does have lower fees for more advanced trades, such as options and futures trading. Interactive Brokers also offers cryptocurrency trading, while Fidelity has not added that capability yet. Overall, Interactive Brokers is a better option for advanced and professional traders, while Fidelity is a great platform for beginner investors and traders.
Interactive Brokers vs Schwab
Schwab is one of the largest brokers in the world, offering a huge selection of tradable assets and investment solutions. Schwab also has over 100 physical locations where customers can meet with a financial advisor or broker in person. Schwab recently acquired TD Ameritrade, absorbing one of the best trading platforms around in thinkorswim. With thinkorswim, you can gain access to a huge selection of charting and analysis tools, a well-designed mobile app and overall low fees.
Interactive Brokers and thinkorswim offer similar functionalities, including advanced trading tools, access to a wide range of tradable assets and sophisticated mobile trading apps. Both platforms offer commission-free stock and ETF trades. However, Interactive Brokers offers lower-cost futures trades and access to crypto trading, surpassing Schwab’s thinkorswim platform in these areas. Plus, Interactive Brokers has access to more global assets than Schwab, making it ideal for global traders.
Interactive Brokers vs Tradestation
Interactive Brokers and Tradestation both cater to advanced and professional traders that want low fees and a huge selection of trading tools. Both offer commission-free stock and ETF trading, low-cost options and futures trading. Interactive Brokers has the edge with low-cost futures trading, though Tradestation does have micro E-mini futures available at a low cost as well.
Both platforms offer desktop trading software with advanced charting and trading tools. They each have well-designed mobile apps that allow you to execute advanced trades on-the-go. Interactive Brokers offers access to more global markets than Tradestation, making it better for those interested in international markets.
Should You Invest With Interactive Brokers?
Interactive Brokers is a bit different from most other online brokers. Founded as a trader’s brokerage, the firm still offers advanced capabilities that experienced investors can utilize to great advantage. However, with the advent of IBKR Lite, Interactive Brokers now serves beginning and intermediate investors as well.
Interactive Brokers has always had low commissions, but in the “race to zero” that began in October 2019, the firm has joined many of its competitors in charging $0 commissions for online stock and ETF trades. Interactive Brokers also has over 19,000 no-fee mutual funds to choose from, making it a great option for casual and active investors alike.
Overall, Interactive Brokers offers a very low-cost package that can serve two distinct investor types: advanced and beginner. It has a great combination of low cost, but with high-level capabilities.
FAQ
Here are the answers to some of the most frequently asked questions regarding Interactive Brokers:- Is Interactive Brokers reliable?
- Interactive Brokers is one of the most reliable advanced trading platforms around. IBKR employs a Smartrouting system for optimal trade execution. It has an ultra-fast desktop platform with a huge selection of trading tools, executing over 2 million successful trades per day.
- What is the disadvantage of Interactive Brokers?
- Interactive Broker is designed for advanced and professional traders; this means it can be overwhelming for new traders and beginner investors. If you have never traded before, or are just getting started, you may find the user interface to be somewhat complicated.
- Is Interactive Brokers good for beginners?
- Not really. Interactive Brokers has made strides toward making a more approachable trading platform. IBKR Lite offers a slightly simpler approach, and the mobile app has different views available for newer users. The bottom line is that Interactive Brokers is built for professional-level traders—and that doesn’t lend itself very well for beginners just learning about investing.
- How much money do you need for Interactive Brokers?
- There is no minimum deposit needed to open an account with interactive Brokers, but there may be trade minimums required, depending on the asset you're trading. Margin accounts require a minimum of $2,000 to get started.
Jacob Wade contributed to the reporting for this article.
Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.
