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Interactive Brokers review: Securities, research, and global investing options for active traders

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Is Interactive Brokers right for you?

Interactive Brokers may pique your interest if you’re an active trader looking to place regular trades on US-listed exchanges as well as international markets. It provides trading access to more than 135 markets in 33 countries around the world, allowing you to invest in stocks, options, mutual funds, ETFs, futures, bonds, and currencies.

Interactive Brokers also offers retirement accounts, cash management accounts, market research, mobile app access, and more.

Interactive Brokers currently manages more than $9 billion in equity capital, and it conducts more than 3.31 million trades per day, according to its website.

Interactive Brokers is available on iOS and Android devices.

Not sure if Interactive Brokers is right for you? Keep reading to see how it stacks up against competitors.

How does Interactive Brokers compare?

Interactive Brokers, Fidelity, and Vanguard all let you place commission-free trades on multiple investment types. The three brokerages also share the $0 minimum requirement for self-directed brokerage accounts, but fees vary for different account types.

For instance, fees for automated advice at Fidelity range from $0 (for balances below $10,000) to 0.35% (balances above $50,000). Advisory fees for Interactive Broker’s automated account range from 0.08% to 1.5%. Vanguard’s automated account, Vanguard Digital Advisor, has a 0.15% fee.

If you’re still interested in investing with Interactive Brokers, though, keep reading to learn more about how the brokerage works.

Ways to invest with Interactive Brokers

Self-directed brokerage accounts

Interactive Brokers gives you the choice of two brokerage plans: IBKR Lite or IBKR Pro. IBKR Lite offers commission-free trading for US-listed stocks and ETFs, and you can set up and maintain your account without any minimum opening deposits or inactivity fees. IBKR Lite also accepts individual, joint, IRA, and trust accounts.

IBKR Pro, on the other hand, is a better choice for the more active and sophisticated investors. This plan offers extra access to investment research, and it lets you use software like Interactive Brokers’ SmartRouting system. The broker’s SmartRouting system offers $0.47 per 100 shares price improvement versus the industry, according to its website. Interactive Broker’s SmartRouting system also aims to make sure your orders are executed at the best price and market possible. 

Both IBKR Lite and IBKR Pro provide access to Interactive Brokers’ Client Portal, IBKR Mobile, and Trader Workstation (TWS).

Automated Trading

Interactive Brokers offers a

robo-advisor
— Interactive Advisors — that specializes in automated investment management. The platform offers more than 70 portfolios built with a mixture of stocks and ETFs.

Management fees for these portfolios range from 0.08% to 1.5%. Minimum investment sizes range from $100 to $50,000. 

Fractional Shares

Interactive Brokers also lets you purchase portions of a company instead of paying for full shares. Fractional trading is available on both IBKR Lite and IBKR Pro, and you can use the service to pick any available US stocks. 

This brokerage doesn’t currently  offer fractional shares for foreign exchanges, but you can trade US stocks in fractions as long as they’re listed on the following stock exchanges: NYSE, NASDAQ, AMEX, ARCA, or BATs. You can also trade certain OTC Pink US penny stocks

Retirement accounts

Interactive Brokers offers traditional IRAs, Roth IRAs, traditional rollover IRAs, traditional inherited IRAs, Roth inherited IRAs, and SEP IRAs. 

IRAs are generally available in cash or margin form, and IRA margin accounts allow you to trade currency products.

Trading platforms

You can take advantage of multiple trading platforms at Interactive Brokers. These include its client portal, Trader Workstation, IBKR mobile apps, and IBKR APIs for institutional clients.

The company also has courses on investing, markets, and programming through its Trader Workstation (TWS) application. 

Is Interactive Brokers trustworthy? 

Interactive Brokers has received an A+ rating from the Better Business Bureau. The BBB generally rates companies by using a grade scale range of A+ to F, so this shows that Interactive Brokers works well with its customers. The bureau says its ratings don’t guarantee that a business will be reliable or perform well; they simply provide a closer look into customer interaction.

However, these ratings aren’t the same for every investment app. Both Webull and Robinhood have received F ratings for racking up numerous customer complaints and failing to respond to them.

In August 2020, the US Securities and Exchange Commission (SEC) fined Interactive Brokers $11.5 million for failing to file suspicious activity reports for certain US microcap securities trades it executed. The Financial Industry Regulatory Authority (FINRA) and the Commodity Futures Trading Commission (CFTC) also fined the app millions for failing to prevent money laundering.  

Interactive Brokers has addressed and closed more than 80 complaints in the last three years, according to the BBB. The investment app closed more than 50 complaints in the last 12 months. 

 

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