Interactive Brokers® Review 2019

About our Review Process

Bankrate recently reviewed 11 of the most popular online brokerage sites, signing up for trial accounts and putting each site through its paces. If you end up signing up for an account, Bankrate may receive compensation.

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Bottom line in a sentence

If you're not afraid to dive into the market with both feet, Interactive Brokers is the most powerful and customizable platform available.

Interactive Brokers at a glance

Star Rating

4
  • Affordablity: 5 of 5
  • Usability: 3 of 5
  • Tools & Research: 5 of 5
  • Mobile: 3 of 5
  • Scalability: 4 of 5
  • Minimum Balance:
    $10,000
  • Cost per stock trade:
    $0.005 per share; minimum $1 per trade and maximum 0.5% of trade value
  • Cost per options trade:
    70 cents per contract, minimum $1 minimum order
  • Commission-free mutual funds or ETFs:
    Thousands of mutual funds and more than 40 ETFs, though many of the most popular options are absent
  • Customer service:
    8 a.m. to 8 p.m. EST phone support, to cover both east and west coast market hours
  • Inactivity fee:
    The monthly activity fee is based on commissions. If the account holder generates more than $10 in commissions and fees throughout the month, the monthly fee is waived. If monthly commissions do not reach a minimum of $10, the standard activity fee is $10 minus the commissions accrued during the month. Additionally, if the account has more than $100,000 in equity, the monthly fee is waived. (Likely need to shorten)
  • Mobile app:
    Yes, the IB mobile app makes it easy to trade on the go with “cutting edge tools,” according to IB.
  • Annual fees:
    See inactivity fee.
  • How long to withdraw:
    Checks requested and approved by by 09:30 ET will be mailed during the next business day. Wire transfer requests before 16:00 ET will be sent on the same day. Note, account holders are allowed one free withdrawal request every month.
  • SIPC insured:
    Yes, the SIPC provides the first $500,000 per customer (including up to $100,000 for cash) for IB brokerage accounts.
  • Best for:
    Veteran investors who want complete control and flexibility

What Interactive Brokers is

Interactive Brokers was founded by billionaire and Wall Street icon Thomas Peterffy because of his background in computer programming instead of his history of profitable stock picking at a big-name firm. Peterffy was an early innovator in computer-assisted trading, and Interactive Brokers remains committed to his philosophy of using cutting-edge technology to increase flexibility and reduce costs.

Of course, this is a double-edged sword. If you're a rookie investor or if you have no intention of doing intensive research necessary to execute sophisticated strategies, it can be overwhelming.

The target audience of Interactive Brokers is veteran investors and even institutional traders. If you're in this category, you will find a best-in-class experience. But if you're not, you're probably going to feel the platform is a bit cumbersome or inaccessible.

What Interactive Brokers costs

With costs that start at just $1 per stock or options trade, Interactive Brokers is difficult to beat on price if you're doing even a modest amount of trading.

But again, you must keep in mind that this cost structure is for a core audience of active traders with deep pockets. The minimum amount to fund an account is $10,000, so small-time investors may be shut out.

Furthermore, there is a pretty small list of commission-free ETFs – and these cater to sophisticated investors without many of the mainstream options that a casual retirement-focused investor would gravitate toward most.

For instance, many of the commission-free ETFs come from the Global X family. These focus on investing strategies like the Global X MSCI Colombia ETF (GXG) for those who want to invest directly in this small South American nation or the Global X China Industrials ETF (CHII) for those who want to drill even deeper and invest in a specific sector of a specific emerging market.

But if, for example, you're just making a few trades a year after rolling over your 401(k) to an IRA, these funds are all but useless to you – regardless of the commission schedule.

Overall, trades are priced incredibly low at $1 apiece. But getting real value out of those trades is all on you as the investor. The good news is that Interactive Brokers does allow you to test-drive the platform at no cost before funding an account, so investors have a chance to truly try see if this is the right trading solution for them.

What Interactive Brokers offers

Interactive Brokers offers robust tools and broad reach across capital markets.

You can trade foreign currencies and futures in addition to stocks and options. You can also access 120 international markets in 26 different countries to buy stocks there directly, instead of relying on those stocks to trade on U.S. exchanges or using an ETF to gain exposure indirectly. In total, customers have access to over 60 different order types.

The platform offers a generous interest rate on idle balances – including a nearly 1 percent rate (at current pricing) on balances of around $50,000. In comparison, some of the best high-yield savings accounts online offer around 1.8 percent currently.

Quick comparison of Brokerage options:
Brokerage Overall Rating Avg. Cost Per Trade Usability Rating
interactive-brokers logo
$1 5 of 5
wellstrade logo Read Our Review
$5.95 3 of 5
charles-schwab logo Read Our Review
$4.95 5 of 5
td-ameritrade logo Read Our Review
$6.95 5 of 5

Some of these specific features worth noting include:

  • Agile and efficient workspace: The Interactive Brokers platform centers on its flagship Trader Workstation software, which offers movable display windows that you can open and close based on what's relevant. You can also click on a symbol in one window to update other views instantly, or set up your own hotkeys to make transactions instantly with just one button of your choice.
    "For serious traders, every second matters. Not only can you customize the layout of your workspace with Interactive Brokers, but you can also customize your keyboard and mouse based on your prefereces."
    "The many fields and views may be intimidating or cluttered to novices, but provides a complete view of the market to those who know what they're looking for."
  • Best-in-class watch lists: All brokers allow you to flag stocks you're interested in or set some kind of alerts. But the Interactive Brokers watchlist technology has over 400 customizable fields for the investments you care about most.
    "Rather than give you a static view of metrics that most investors may find valuable, Interactive Brokers allows you to create custom watch lists where you can build and sort the columns based on your personal strategy."
  • Customizable and user-friendly charts: With over 100 different indicators for its charts, you can easily draw esoteric patterns such as Fibonacci retracements and other lesser-known investment indicators. If you're a technical analyst who cares about chart formations – which, admittedly, isn't a big share of the investing public – you often have to look outside your broker to find an in-depth and customizable charting platform. That's not the case with Interactive Brokers.
  • Excellent margin rates: Aggressive investors often "trade on margin," which means they are effectively buying securities with borrowed money from their brokerage. The broker then charges an interest rate, like any other loan. While this can always be fraught with risk and potential expenses, Interactive Brokers offers far less onerous terms than competitors with current rates of just 3.2 percent on loans under $100,000. Compare that with Merrill Edge and TD Ameritrade, which both charge over 9 percent unless you're borrowing more than $50,000 at a time.

What Interactive Brokers lacks

Interactive Brokers may not be the best brokerage for beginner investors. And the company doesn't make much of an effort to grow beginners into experienced investors.

Take its Traders Academy education center, which as the name implies focuses on active trading techniques and has plenty of resources about how options and futures work. If you're new to the stock market and don't understand the basics, these resources aren't very helpful. Furthermore, while many of the platform's functions may be intuitive to investors used to various financial tools and screeners, rookies may never fully realize the potential.

Interactive Brokers is best for...

Veteran investors who are comfortable using high-powered tools and trade at high volume are the ideal customers for Interactive Brokers. The cost savings at $1 a trade can add up over time if you're placing several trades or more each week.

And best of all, if you're a sophisticated trader who has a successful strategy for stocks, there is potential to dabble in options, futures or forex on the same platform.

The platform isn't great on a mobile device, but if you're a full-time trader at a desk with multiple monitors, the flexibility of the Interactive Brokers workspace is a powerful selling point.

In short, if you know what questions to ask about the market, Interactive Brokers is a great way to ensure you get the answers in a way that you can instantly take action on.