Table of Contents
Today we’re going to review Interactive Brokers and address why I’m going back with more of my money.
If you want to know:
- Why I stopped investing through them, and the one change that brought me back
- Whether you can trust them
- What I like and dislike about the user experience
- What products are available on the platform
- How much they charge in fees
- How to start investing on the platform
You’ve come to the right place.
Let’s dive right in.
P.S. if you’re new to investing, I’d highly recommend for you to check out some of our resources (here, here, and here) before you run into the markets guns blazing.
Why I’m Going Back
Interactive Brokers (IB) was actually the first broker I ever used to invest in U.S. stocks back in 2019.
I liked the platform, it was trustworthy, and it was pretty simple to use.
The only issue I had was the inactivity fee of $10 per month. You’re essentially being incentivized to execute enough trades that generate a minimum of $10 in commissions every month because you’d be charged that amount anyway.
At the time, other brokers like eToro (our review here) didn’t charge an inactivity fee, so I decided to stop using IB.
BUT as of 1 July 2021, they decided to remove this fee:
And that’s the one reason why I’ve decided to deposit more money back into IB.
That being said, let’s get into reviewing the platform.
If you’re interested in signing up with IB, click here (our affiliate link – each click will go towards supporting our blog), or here (non-affiliated link).
Is Interactive Brokers Legit, Safe, and Trustworthy?
Short answer: yes.
Long answer: yes.
Jokes aside, they’re one of the most widely used platforms for foreigners looking to invest in the U.S. markets. This is because:
- They’re listed on the NASDAQ with a market cap of over $26 billion as at 27/8/2021. While this isn’t a justification per se, it’s a good proxy for trustworthiness as the company is subject to regulations set by the exchange. Not only that, meeting the listing requirements mean they’re not just any Tom, Dick or Harry in the market.
IBKR market cap as at 27/8/2021 - Many brokers including popular platforms like Trading 212 , TradeStation, and Zacks Trade utilizes IB’s execution capabilities (more on this later).
- They’re regulated in the U.S. and the U.K. by their respective regulatory bodies.
- IB clients are protected by the Securities Investor Protection Corporation (SIPC) which means that investors are protected up to $500,000 in the event that anything happens to IB. Yes, this applies to non-resident and non-U.S. citizens (source).
Overall, I’d say they’re one of the most established brokers in the market, with a track record that is on par with other big players like TD Ameritrade.
User Experience – Trash or Pass?
Personally, user experience is one of the most important factors when I’m choosing a platform to use.
How does IB’s platform live up to the likes of the newer guys in the market?
To begin with, they have a mobile app:
A desktop web-app:
And an advanced version of the desktop app which is suitable for more experienced traders:
To cut to the chase, you won’t see the sort of user friendliness of the newer platforms like Robinhood, Webull, or eToro.
IB feels a bit more traditional, but to be fair, it feels similar to the platforms by most of the established brokers out there.
That being said, I still managed to navigate the platform and do everything I needed to do fine. The mobile app is also useful for opening positions and checking on my portfolio.
The only annoying feature I experienced is that I kept getting logged out after a short period of inactivity. It’s a safety feature, so I can’t complain much about it.
What Can I Use Interactive Brokers to Invest in?
Being an established broker, IB allows us to trade most asset classes including stocks, ETFs, currencies, and metals.
The one thing that sets IB apart from the newer players is that they provide access to a whole host of foreign markets outside of the U.S. including Europe, Singapore and Hong Kong.
Not only that, IB offers fractional shares which is a key consideration for millennial investors like myself.
Finally, they allow for trading outside regular hours (pre-market and after hours). While this isn’t a deal breaker for me, it’s still nice to have this as I do use it from time to time. If this is something you’re looking for specifically, IB should definitely be in your radar.
What Sort of Fees Do Interactive Brokers Charge?
This is the area where IB is slightly behind the brokers we’ve reviewed on our YouTube channel (WeBull, and eToro to name a few). Unlike those platforms, IB charges a fee for trading.
The fees vary by market, but taking the most popular market as an example, they charge $0.005 per share with a minimum of $1 per trade for U.S. shares.
This is an acceptable amount to me, and I’ve also been been reading on how a better execution capability could result in slightly lower prices on the stocks you buy, and slightly higher on those you sell.
It’s not guaranteed, but I do know that IB is really good at executing trades at the best possible prices, minimizing the spread we pay.
Deposits – How Do I Get Money into My Trading Account?
This section is directed more towards our Malaysian and Singaporean viewers.
IB accepts deposits in SGD at no fee, which is great. No issue for the Singaporeans here.
For Malaysians, you can sign up for a CIMB Singapore FastSaver account so you can avoid paying the hefty foreign exchange or wire transfer fees that Malaysian banks charge.
After you’ve deposited your money in SGD, you can easily convert it into USD on the platform itself and you’re ready to go!
From what I remember, withdrawals are also easy and quick but I can’t remember exactly how long it took as it’s been a while since I decided to stop using the app (I’ll update this section as soon as I find out for myself).
Final Verdict – Go or No Go?
If the first section wasn’t a spoiler already, it’s a go for me.
The only downside of the platform are the fees, as more and more brokers out there offer commission free trading. Personally, the fractional shares and good execution makes up for that so I don’t mind paying the small fee per trade for now.
I do expect IB to move towards commission free trading eventually, as the market competition intensifies. After all, they were one of the first major brokers to lower their commission fees.
In a nutshell, I think Interactive Brokers is a great broker for long term investing due to its great features, reliability, and safeness. If you value these things as well, IB is a great option for you to consider.
That being said, I’m planning to return to IB for my long term stock holdings and will be depositing more money in the near future.
If you’re interested in signing up with IB, click here (our affiliate link – each sign up will go towards supporting our blog), or here (non-affiliated link).
Interactive Brokers disclaimer here.
What do you think? Leave us a comment and let us know!
Found this article useful? Share it with your friends & family! We’d really appreciate the love & support 🙂
Check out our related articles: