Interactive Brokers Review | 2024 | Sumlad Ireland (2024)

The first choice to make is the type of account you want to trade with. On Interactive Brokers, there are two to choose from for self-directed investing:

• Individual
• Joint

Standard accounts such as these give you access to standard products i.e. stocks and ETFs. The next part of the process is adding any additional products that you may want access to on your account.

For each product you want to add, let’s say options trading for example, you will need to provide details of your experience, trading requirements, and overall knowledge. If Interactive Brokers believes that options trading (or any other high-risk product) is not suitable or doesn’t match your investment objectives, they can choose not to give you access.

This may appear prohibitory, but it is a protective measure for inexperienced investors. In our view, they’re putting client protection first, and acting in their best interests.

The remaining details you’ll need to provide are standard personal information.

You’ll need the following to finish the process:

1. Provide a valid form of identification
2. Add a funding method to your account
3. Confirm your phone number
4. Verify your details via email
5. Complete any required tutorials
6. Sign the agreement

You have two options for funding an Interactive Brokers account:

1. Standard bank transfer
2. Transfer from a Wise account (online foreign exchange provider)

For bank transfers, you can follow these steps to fund your Interactive Brokers account:

1. Select ‘Deposit’
2. Add a new method
3. Provide account details
4. Toggle recurring transfer on or off (you can choose to add money at regular intervals such as monthly, quarterly, or annually)
5. You will then be provided with the BIC and IBAN for transferring money to Interactive Brokers
6. Go to your banking app and create a new payee
7. Input the details from Interactive Brokers and confirm the transaction

That’s it. Deposits will generally arrive within one business day.

To withdraw money from Interactive Brokers to your bank, complete the following steps:

1. Select ‘Withdraw’
2. Choose SEPA transfer
3. Input your account details and confirm the withdrawal

You will get one free withdrawal per month. Any further withdrawals in a given calendar month will incur a €1.00 fee.

You can also do a bank wire withdrawal or withdraw to a Wise account. Again, you have one free withdrawal per month, but the fee for further withdrawals in a single calendar month is €8.00 for bank wires. It isn’t disclosed what the fee is for extra Wise withdrawals, only that there will be an additional cost.

You have access to more than 86 stock exchanges for trading stocks on Interactive Brokers. You can trade stocks from North America, all of Europe (including Scandinavia and other non-Eurozone countries), Australia, and most major markets in Asia.

You can also trade options, futures, and any additional products you have opted in for if the exchange you’re using offers them.

Clients in Ireland can earn interest on their cash with Interactive Brokers. As a multi-currency account, you can earn interest on EUR, USD, GBP, and more than a dozen other currencies.

However, in order to earn the full rate of interest, the value of the assets you own on Interactive Brokers must be $100,000 (or the Euro equivalent) or more. Even then, no interest is paid on the first $10,000 (or equivalent).

Here’s how it works:

• No interest paid on cash balances < $10,000 (or currency equivalent)
• Reduced interest rates apply to cash balances when the account value < $100,000 (or currency equivalent)
• Full interest rates apply on cash when the account value > $100,000 (or currency equivalent)

For example, let’s say your total account value at Interactive Brokers is $150,000. You have $120,000 invested in Berkshire Hathaway (BRK.B) and you have $30,000 in cash.

In that case, you will earn 0% on the first $10,000 in cash, but you will earn the full Interactive Brokers interest rate on the remaining $20,000 cash balance.

After all that, you’re probably wondering what the interest rates at Interactive Brokers are. Here’s a list of the full rates for reference:

• USD: 4.83%
• EUR: 2.92%
• GBP: 4.41%
• CAD: 4.12%

Bear in mind that these interest rates could change at any time. Check with Interactive Brokers customer support if you are unsure.

There are thousands of ETFs available on Interactive Brokers for Irish clients. Just note that US-domiciled ETFs will not be available due to EU restrictions.

With a variety of ETF selections, you can track the S&P 500, the FTSE, Europe, and emerging markets, or choose a diversified world index.

A few of the popular ETFs you can invest in from Ireland include:

Interactive Brokers has fractional share trading. It is available across a wide variety of US, Canadian, and European stocks and ETFs.

For US fractional shares, there is a minimum fee of $1.00.

For Canadian fractional shares, there is a minimum fee of $1.00 CAD.

You can buy cryptocurrency on Interactive Brokers via Paxos. The crypto assets you can currently buy include:

• Bitcoin
• Ethereum
• Bitcoin Cash
• Litecoin

0.12% to 0.18% fee per purchase.

Or, as an alternative, you can buy crypto exchange-traded products (crypto ETPs). For these products, the fees will be more closely linked to the costs associated with buying shares or ETFs from an exchange. For example, if you bought a European crypto ETP, the minimum fee would be €3 to €4 or 0.05% to 0.10%, depending on the size of the trade value.

Crypto ETPs on Interactive Brokers can also give you exposure to a more diverse range of cryptocurrencies, not just the top two, Bitcoin and Ethereum. There are crypto ETPs for assets such as:

• Stellar (XLM)
• Polkadot (DOT)
• Solana (SOL)
• XRP (XRP)
• Tezos (XTZ)
• Cardano (ADA)

US treasuries and certificates of deposits (CDs) are available on Interactive Brokers (CDs are similar to fixed-term deposit accounts in Ireland). There are more than 1 million bonds available to buy, including both government and corporate bonds.

Find out more about bond fees on Interactive Brokers here.

You can trade options in Ireland with an Interactive Brokers account. That being said, you may be restricted from activating options trading if you lack the experience, knowledge, or financial capacity to do so.

If you are granted permission, you can trade options for stocks and indexes in the US, Europe, the UK, Canada, and several other markets. You can find more details on options trading fees here.

There is a selection of more than 48,000 investment funds on Interactive Brokers, some of which are fee-free. These are non-US funds so Irish clients can invest.

The main difference between a mutual fund and an ETF is that you aren’t buying shares, you can choose to the exact cent how much you want to invest (kind of like fractional shares).It’s also important to note that the first buy-in to any of these funds is $3,000. Recurring investments thereafter can be as little as $100.

Unless you’re investing more than €20,000 investing costs will be between €3 and €4 for European stocks — in most cases.

For US and Canadian stocks, it’s typically even less. The only factor to be aware of is buying low-priced shares — under $10 for example.

Let’s say you want to buy 10,000 shares of a US company at $5 per share for a total of €50,000. Because US stock fees are charged on a per-share basis, you’ll be paying $0.005 x 10,000 which is equal to €50. Still, that’s relatively cheap overall for such a large investment.

The minimum currency conversion fee at Interactive Brokers is $2.00, or the currency equivalent. This is the most likely fee for you to pay due to the overall inexpensive fee structure for foreign exchange.

Basically, the more money you’re exchanging, the cheaper it will be.

Standard currency conversion fees at Interactive Brokers are less than 1 pip, equivalent to $0.00002. These are the lowest currency conversion rates you will find at nearly any online broker.

For high-net-worth individuals, there are discounts for transfers of $1 million or more. You can find the rates below:

Where 1 pip = 0.0001

On Interactive Brokers, the commission you pay on stocks depends on the currency and stock exchange you’re buying and selling from. In the US and Canada, for example, you are charged on a per-share basis with a maximum fee. Whereas for the majority of European and Asia-Pacific stocks, you have to pay a flat rate based on the size of your investment, typically with no max fee.

Here’s an overview of the fees for stocks and ETFs:

US stock and ETF fees on Interactive Brokers

Canadian stock and ETF fees on Interactive Brokers

UK stock and ETF fees on Interactive Brokers

Stock and ETF fees on Interactive Brokers for Austria, Belgium, France, Italy, and Spain

Australian stock and ETF fees on Interactive Brokers

Japanese stock and ETF fees on Interactive Brokers

Indian stock and ETF fees on Interactive Brokers

Here’s how much it costs to invest €100, €1,000, and €10,000 in most EU stocks on Interactive Brokers:

To illustrate the costs of investing in US stocks on Interactive Brokers, we’re going to pretend that the stock being bought has a price per share of $10.00. Here’s how much it would be:

You can buy cryptocurrency for a fee of between 0.12% to 0.18% via Paxos on Interactive Brokers.

The other option is to buy crypto trackers domiciled in Europe, you’ll pay the standard €3 to €4 minimum (or 0.05% to 0.10% of the trade value). You can also buy US crypto-focused stocks such as Microstrategy (MSTR) or Grayscale Bitcoin Trust (GBTC) for the cost of $0.005 per share ($1 minimum) or a maximum of 1.00% of the order value.

US corporate bonds and CDs have a minimum fee of $1.00 on Interactive Brokers, with a maximum of $125 or 1% of the order value. US treasuries carry a 0.002% fee with a $5.00 minimum and no maximum.

European bonds have a 0.01% fee.

Depending on the bond you buy and the size of your order, fees will vary — we suggest you read the full breakdown here.

Here are the fees for trading options on Interactive Brokers based on less than 10,000 contracts bought or sold in the country where the stock exchange resides:

You can find the full list of options fees here.

Here are the minimum fees for trading futures on Interactive Brokers based on the country where an exchange resides:

You can find the full list of futures fees here.

Digital statements are issued daily or monthly and can be found on your login screen. If you require archived statements (statements older than seven years), you will have to pay a fee of €20 for the first statement requested and €5 for any additional requests.

Most things are relatively easy to find on Interactive Brokers. There are plenty of resources for investor education, and day-to-day market news, along with a number of useful tools and features available on Interactive Broker’s investment accounts.

One of the issues is the discovery of new investments and companies for beginners. Because Interactive Brokers doesn’t have any set lists of ETFs or stocks to browse — you’ll need to do some research about what you want to invest in somewhere else.

Traders’ Academy is Interactive Brokers educational dashboard. Though much of the content is primarily for traders, there are beginner resources that all investors can learn from. You can access a variety of interactive lessons that cover topics related to:

• Stocks
• Indexes
• Value investing
• Options
• Futures
• Bonds
• Economics
• Technical analysis
• Fundamental analysis
• Risk

Additionally, you can access more content via trader’s blogs, podcasts, and webinars which can provide you with further insights.

You can get real-time market news from financial media companies and publishers such as Reuters, Benzinga, and Seeking Alpha.

You can also access Bloomberg 24/7 with Interactive Brokers for free.

Interactive Brokers has its own stock screener for filtering by price and volume. It’s a simple tool that can be useful, but alternatives — such as the TradingView Stock Screener — have more filtering options and criteria.

Stock analysis is available from three different providers:

• Refinitiv
• TipRanks
• Morningstar

These companies provide up-to-date data covering a vast number of stocks. You’re able to find analyst estimates, price targets, financial performance, future expectations, risk ratings, and even how defensible a company’s moat is.

For other premium services, you’ll have to pay a fee, which depends on the provider. Examples include minute-to-minute newswires, analyst reports, and technical analysis.

Interactive Brokers has an impressive portfolio overview. You can manage your account in multiple currencies and keep track of the performance of stocks, ETFs, or other assets you own. One of the unique features is that you can analyse your investments by sector and industry performance.

The PortfolioAnalyst tool will give you a comprehensive overview of all of your investments where you can see an entire overview of growth, performance, and how aligned your portfolio is to your investment goals.

The events calendar tracks every single relevant event for investors and traders. You can find all country-sepcific announcements such as interest rate hikes, GDP forecasts and releases, manufucaturing numbers, inflation figures, and more.

You will automatically be opted in to see updates from the companies on your watchlist for earnings or other announcements.

You can retrieve activity statements as well as costs and charges statements from the ‘Performance & Reports’ section. This will provide a detailed overview of your investments, making it easier to file any capital gains or ETF exit taxes.

Activity statements will typically be issued on a daily and monthly basis.

Do you own your assets on Interactive Brokers?

Yes, you do. If you bought stocks with cash, you own those assets. If you used margin (got a loan from your broker) to buy stocks, then no, you don’t own the asset.

Interactive Brokers does lend out your shares to short sellers, but it will also pay you to do so. Clients in Ireland and Europe are eligible for Interactive Broker’s Stock Yield Enhancement Program. However, you must meet certain criteria before Interactive Brokers will pay out on your shares:

• You must have been approved for a margin account or have more than $50,000 of equity (or an equivalent currency) on the platform
• The program only applies to stocks that you own and bought with cash, not any stocks you bought on margin

There are a number of things to be aware of before signing up to the Stock Yield Enhancement Program:

1. Shares being lent may not be covered by SIPC (US Investor Protection Scheme)
2. Your shares are likely being used for short-selling
3. There are no guarantees that your shares will be lent and lending can be halted at any time
4. You lose any voting rights you had
5. If you sell your shares, you immediately stop earning interest
6. Borrowing against the lent-out shares also means you will stop earning interest

It’s also important to note that when Interactive Brokers engages in share lending, the firm sets aside 103% of the value of lent securities. This is a preventative measure that protects the firm from taking disproportionate levels of risk.

Interactive Brokers are regulated by a string of governing bodies in the financial space. It’s worth noting that Interactive Brokers is in compliance with the regulations of some of the strictest governments in the world so you can rest assured that everything is above board. Here is a list of the countries and bodies that supervise the activities of Interactive Brokers:

• Securities and Exchange Commission (SEC) in the US
• Member of NYSE, FINRA, and SIPC in the US
• Registered Futures Commission Merchant (FCM) in the US
• Follows rules set by the Commodity Futures Trading Commission (CFTC) in the US
• Registered as a broker-dealer in the US
• Central Bank of Ireland and a member of the Irish Investor Compensation Scheme
• Central Bank of Hungary
• Investment Industry Regulatory Organization of Canada (IIROC): Member of the Canadian Investor Protection Fund
• The FCA: Investors are covered by FSCS
• Australian Securities and Investments Commission (ASIC): Interactive Brokers is an ASX and CBOE participant and a member of the Australian Financial Complaints Authority (AFCA)
• Hong Kong Securities and Futures Commission, member of SEHK and HKFE
• Luxembourg’s Commission de Surveillance du Secteur Financier (CSSF): Complies with Luxembourg’s investor protection scheme
• Monetary Authority of Singapore (MAS)

Beyond a shadow of a doubt, Interactive Brokers is a safe broker that you can trust to manage client funds appropriately.

You have cover under the Irish Investor Compensation Scheme for up to €20,000 if Interactive Brokers were to go bust.

Learn more about Investor Compensation Schemes.

Interactive Brokers is a public company that is required to publish its results quarterly. Because of this, we can see what type of shape it is in financially.

From its most recent results, we can see that the company continues to onboard new customers, increasing the headcount by 19% from the year prior. Despite average trading statistics declining in its most recent quarter, Interactive Brokers was still able to keep commissions steady. It came in at $322 million, the same as was reported in the quarter a year before.

Strength was most visible in the net interest income column where Interactive Brokers is taking advantage of higher global interest rates. Total net interest income increased 99% from a year ago, helping total net income before taxes increase by 66% from a year before.

Put simply, Interactive Brokers is a stable, profitable company. It has continued to grow over the last number of decades, expanded its reach, and continued to innovate.

There is no disclosed EU deposit guarantee scheme (DGS) covering your cash balances up to €100,000. Transfers are sent to J.P. MORGAN SE for Irish clients, which does appear to provide cover under the DGS. We have contacted Interactive Brokers and will update the details accordingly.

If you are earning interest on USD, you have SIPC protection for up to $250,000 and an additional $2.50 million with Interactive Broker’s Sweep Program which covers your money under FDIC rules.

You do not need to be a US resident or citizen to avail of these benefits — they apply to Irish clients with USD cash balances too. The details are disclosed here:

• SIPC protection for non-US citizens
• FDIC protection for non-US citizens

Although there is additional currency risk, Irish investors using Interactive Brokers may want to convert any cash balances to USD for extra protection.

To send an email to Interactive Brokers, you need to go to the support services page. From here, select Email and choose ‘Send an enquiry.’

If you don’t have an account, select that option, fill out your details, and send your message.

If you do have an account, you need to select that option and start typing in your query. Press enter, scroll down, and only then will you be able to send an email.

Irish clients can call Interactive Brokers at +41-41-726-9500, the direct dial number for Europe.

The European Toll-Free number shown on the Interactive Brokers website does not appear to work.

The complaints email for Interactive Brokers is [emailprotected].