Is Interactive Brokers regulated?

The Interactive Brokers broker is regulated by many financial authorities like:

• FCA: Financial Conduct Authorities in the UK
• SEC: Securities and Exchange Commissions in the US

Is Interactive Brokers a scam?

Interactive Brokers safety is divided into 2 parts, the safety of the broker itself and the safety of the client.

Broker safety

Interactive Brokers has a long tracking record since 1978 with more than 40 years of experience. It has also been awarded with several awards from its foundation up-till-now. Interactive Brokers now has over 720,000 clients worldwide which means that it’s a trusted broker.

Interactive brokers is also listed on the stock exchange and publishes its financial statements regularly.

Client protection

Interactive Brokers has client protection amounts for its clients according to their country of residence as the following table shows.

Interactive Brokers Legal Entities Table

Unfortunately, Interactive Brokers does not provide any client protection amounts for countries not mentioned in the table above.

On the other hand, Interactive Brokers provides a negative balance protection on forex and CFDs for the clients from the European Union only.

Interactive Brokers offers different trading instruments like forex, CFDs, stocks, options, futures, metals, bonds, ETFs, mutual funds, and crypto trading.

Disclaimer: CFDs have a high risk of losing money rapidly. About 80% of retail investor accounts lose money due to leverage when trading CFDs with this provider. Please note that CFDs are not complying with the islamic religion. And if you want to trade in CFDs you should consider a swap-free account to follow islamic rules.

Learn more about CFDs for muslims.

Interactive Brokers Offering of Investments

Interactive Advisors

Interactive Brokers also provides many advisory programs for those who want to build their own portfolios by experts. The annual management fees ranging from 0.08% to 1.5% and minimums start at just $100.

Notes:

• Please note that some of the trading options may depend on your account type and / or your country of residence according to the governmental rules.
• In 2020, Interactive Brokers introduced fractional trading when trading stocks. This feature allows clients to buy and sell small amounts instead of whole ones.

Countries available

Interactive Brokers is available in over 200 countries including USA, Japan, Italy, and more.

There are some countries that you can’t open an account from which have unstable political or economic backgrounds like North Korea.

Interactive Brokers countries list

Account types

Interactive Brokers has different account categories available like:

• Individual, Joint, Trust, IRA and UGMA/UTMA Accounts
• Friends and Family Accounts
• Family Office Accounts
• Small Business Accounts
• Advisor Accounts
• Money Manager Accounts
• Broker and FCM Accounts
• Proprietary Trading Group Accounts
• Hedge & Mutual Fund Accounts
• Compliance Officers
• Administrators
• Institutional Hedge Fund Investors

Each of the previous accounts has its own features and relative fees and commissions.

Interactive Brokers also provides a demo account with 0 fees if you want to experience the trading platform with no risk.

Min deposit

For a lot of accounts, Interactive Brokers does offer a minimum deposit of $0.

How to open an account

You can open an Interactive Brokers account in minutes through these steps:

1. Enter your name, email, phone number, and country of residence.
2. Enter some personal information like your city and profession.
3. Choose the account type, platform, and base currency.
4. Add your trading preferences.
5. Provide a proof of your identity and the country of residence.
6. Fund your account and start trading.

Interactive Brokers - Account opening

Commissions

The commissions of Interactive Brokers differ from an account type to another and from trading instrument to another as the following:

• Stocks, ETFs and Warrants

There are three types of commissions:

• Tiered (Transparent Volume-Tiered Pricing)
• Fixed (fixed rate per share or trade value)
• Free (free US stocks for US residents only)
• Options
• Tiered (Transparent Volume-Tiered Pricing)
• Fixed (fixed rate per share or trade value)
• Futures and FOPs
• Tiered (Transparent Volume-Tiered Pricing)
• Fixed (fixed rate per share or trade value)
• SSFs
• SGX SSFs => 1 BPS with a clearing fee of 0.5 BPS.
• South Korea SSFs => 0.85 BPS for USD account
• Hong Kong SSFs => HKD 30.00 for HSI, CHH, CES120
• Spot Currencies
• They have a commission of 0.2 BPS with a minimum of $2 per order if the order amount is less than $1,000,000,000 per month.
• Then it goes down until it reaches 0.08 BPS with a minimum of $1 if the order amount is less than $5,000,000,000 per month.
• Metals
• Gold has a commission of 1.5 BPS with a minimum of $2.5 per order if the order amount is less than $500,000.
• Silver has a commission of 3.0 BPS with a minimum of $300 per trade if the order amount is less than $250,000
• Fixed Income

Commissions are calculated based on volume and any external fees are added on.

For example, in the USA, first USD 10,000 in face value have a commission of 0.1%, then it becomes 0.025% if greater than $10,000.

• Mutual Funds

More than 40,000 Funds Available at the Lowest Cost Including 7,700 Commission-Free Funds.

There’s also a fixed low commission of EUR 4.95 per trade for all other funds.

• Trade Disk (US)
• Stock and ETFs => USD 0.01 per share (min $100)
• Options => USD 0.95 per contract (min $95)
• Futures => USD 3.00 per contract (min $300)
• Futures options => USD 3.00 per contract (min $300)

Disclaimer: CFDs have a high risk of losing money rapidly. About 80% of retail investor accounts lose money due to leverage when trading CFDs with this provider. Please note that CFDs are not complying with the islamic religion. And if you want to trade in CFDs you should consider a swap-free account to follow islamic rules.

Learn more about CFDs for muslims.

Non-trading fees

• Account fee: $0
• Monthly activity fee: $10 for IBKR Pro accounts which generate no commissions (USD 20.00 if the account equity is USD 2,000 or below, and USD 10.00 if the account equity is above USD 2,000)
• Deposit fee: $0
• Withdrawal fees: $0

(you can check the full withdrawal fees in withdrawal fees section)

Account Currencies

The Interactive Brokers account has different base currencies options like USD, EUR, HKD, GBP, AUD, SGD, CHF, CAD and JPY.

Notes:

• You will not be charged with conversion fees if your account has the same currency with your bank account or when you trade assets with the same currency of your account.
• If you want to avoid being charged with conversion fees, you can open a multi-currency bank account at a digital bank.
• Interactive Brokers will not automatically convert currency when placing a withdrawal.

Deposit

1. Options

Interactive Brokers supports depositing using different options like:

• ACH transfer
• Checks
• Online Bill Pay
• Transferwise

In addition to the previous depositing options, Interactive Brokers also accepts transferring your money from another broker.

On the other hand, there’s no option to deposit into your account using credit/ debit cards or electronic wallets.

Interactive Brokers deposit methods

2. Fees

Interactive Brokers offers a free-of-charge deposits

3. Time

It takes from 1 - 2 days in order to complete your deposit into your account in Interactive Brokers.

Withdrawal

1. Options

Interactive Brokers only provides withdrawal using bank transfers.

Interactive Brokers withdrawal methods and fees

2. Fees

Interactive Brokers offers a free withdrawal at the beginning of each month with $0 fees. The subsequent withdrawals have fees according to the base currency of your account and the method you use for withdrawals

3. Time

It takes about 2 business days to withdraw your money from Interactive Brokers.

Interactive Brokers works on different platforms like Desktop / Mobile / Web.

Each one of them has its own features and specifications. In the following section we will know more about them.

Web Platform (Client Portal)

Languages

The web application of Interactive Brokers is available in a number of languages including some major languages like English, Spanish, Russian, and more.

Interactive Brokers - Web - Languages

User interface (UI)

The UI of the web platform looks good and it’s user friendly with all functions in the right place.

Interactive Brokers - Web - UI

Login and Security

The web version of Interactive Brokers has a two-factor authentication method for login which is much safer than a lot of other broker platforms.

Interactive Brokers - Web - Login

Searching

The search function in the web platform works fine with the ability to find the product you’re searching for easily.

Interactive Brokers - Web - Search

Placing orders

Interactive Brokers has a lot of order types and algos that you can use including:

1. Market
2. Limit
3. Stop
4. Trailing stop

Interactive Brokers - Web - Order Types and Algos

Notifications and alerts

The web version has a notification and alerts option and you can find it in settings.

Portfolio and reports

The portfolio and reports are good with the fundamental data available within the platform including activity and custom statement.

TWS (Desktop Version)

Languages

The TWS is available in the same languages of the web trading platform.

User interface (UI)

The UI of the TWS platform looks complicated and it’s very hard for beginner traders to use it.

Interactive Brokers - Desktop - UI

Login and security

As the web trading platform, TWS has two-factor authentication for login which is safe.

Interactive Brokers - Desktop - Login

Searching

The search function within the TWS platform is not very user-friendly and it takes too much time to load results.

Interactive Brokers - Desktop - Search

Placing orders

Same as the web platform, there is a number of order types including, but not limited to:

1. Market
2. Limit
3. Stop
4. Trailing stop
   

Interactive Brokers - Desktop - Place Orders

Notifications and alerts

The reports in the TWS platforms have the same data like the wenb trading platform.

IBKR (Mobile Platform)

Languages

The IBKR application is available in a variety of languages including Arabic, English, Japanese, and more.

Interactive Brokers - Mobile - Languages

User interface (UI)

The IBKR application has a very user friendly UI with the ability to navigate easily and find the right information in the right place.

Interactive Brokers - Mobile - UI

Login and security

Like the web and desktop trading platforms, the mobile trading app has a two-factor authentication method for login.

Interactive Brokers - Mobile - UI

Searching

The searching function in the IBKR app is very good and you can find the instrument you’re looking for just by typing the first letters of it.

Placing orders

Same as the web platform, there are a lot of order types like:

• Market
• Limit
• Stop
• Trailing stop

Interactive Brokers - Mobile - Place Orders

Notifications and alerts

In the IBKR app, you can set notifications and alerts from a separate tab within the application.

Interactive Brokers - Mobile - Notifications

Portfolio and Reports

The IBKR app has a clear fee and portfolio reports with the ability to view earnings and all other fundamental data.

Interactive Brokers - Mobile - Portfolio

Sources

Interactive brokers has good research tools as well as other third party tools that you can use.

Mutual Funds Search Tool

This tool allows you to search mutual funds by country, family, commission, and fund type.

Interactive Brokers - Research - Mutual Funds Search Tool

Fundamental data

Interactive Brokers provides fundamental data like income statements on all its platforms.

Charting

The charting too of Interactive Brokers is very useful with over 120 indicators to choose from.

Interactive Brokers - Research - Charting

Newsfeed

If you like to keep up with the financial news, Interactive Brokers provides a news section to do so. It’s available on the web and the mobile application platform.

Interactive Brokers - Research - Newsfeed

Economic Calendar

In order not to miss any important financial event. Interactive Brokers provides an economic calendar for the upcoming financial events.

Interactive Brokers - Research - Economic Calendar

Options

Interactive Brokers supports different customer service channels like:

• Phone support
• Live chat
• Email support

Languages

The languages available for customer service are many with the support of major languages like English, Russian, Chinese, and more.

Interactive Brokers - Customer Support

Interactive Brokers provides some great educational materials for both beginners and advanced traders. Those educational materials are:

• Trader’s Academy
• Trader’s insight
• Blogs
• Webinars
• Students trading lab
• Short videos
• Glossaries
• Calendars

Interactive Brokers - Education

FAQs

• 1. How long does it take to verify my account?
• It takes about 2 to 3 weeks to verify your Interactive Brokers account.
  1. Can I open more than one trading account?
• Yes, you can create a linked account and log into Account Management, you can perform any action, such as modify trading permissions or transfer funds, for a specific linked account.
  1. Does Interactive Brokers allow bot trading?
• Yes, it does.
  1. Does Interactive Brokers give a bonus?
• Yes, Interactive Brokers will give you a bonus of up to $200 if you refer a friend that opens an account and maintains a balance of at least $10,000 for one year.
  1. Does Interactive Brokers allow scalping and hedging?
• Yes, Interactive Brokers does.
  1. Does Interactive Brokers has a swap-free account?
• No, Interactive Brokers does not have an islamic account.
  1. When will my demo account expire?
  2. Can I login to the same account through different devices?
• Unfortunately, Interactive Brokers does not support logging in to your account from different devices. You should log out from one of them to login to another.
  1. Does Interactive Brokers accept payments from third parties?
• No, the payments should be under your name only.

Conclusion:

• Pros: negative balance protection, two-step verification, min deposit is $0
• Cons: inactivity fees, no credit cards option, poor desktop platform design
• Best for: Advanced and professional traders
• Regulated by: FCA, SEC
• Headquarters: USA
• Foundation year: 1978
• Min Deposit: $0
• Deposit methods:ACH transfer, checks, Online Bill Pay, Transferwise
• Withdrawal method: Bank transfers
• Deposit and withdrawal fees: $0
• Base currencies: USD, EUR, HKD, GBP, AUD, SGD, CHF, CAD and JPY
• Offering of investments: forex, CFD, stocks, options, futures, metals, bonds, mutual funds, and crypto
• Number of users: 720,000 clients