Billionaire Thomas Peterffy founded Interactive Brokers in 1993 as an alternative to traditional and more costly brokerage firms. Although listed on the Nasdaq, it is still 76.% privately held. Interactive Brokers boasts 1.54 million client accounts and does CDN$2.26 million in daily trades. The company has remained laser focused on providing access to a wide variety of investment products at a lower cost. Its various platforms enable global trading in stocks, options, futures, forex, bonds and funds in over 80 exchange markets.
Rated 4.9/5 stars.
- Account Fees Tiered pricing based on volume, fixed pricing per share or as a percentage of trade value
- Minimum Deposit $0
- Asset Types Global stocks, Options, Mutual funds, Hedge funds, Futures, Bonds, Gold, Currencies, Forex, Cryptocurrencies
Interactive Brokers Pros & Cons
An extensive selection of investments
Offerings include a broad range of global markets and asset classes
Low commissions and fees
Very low interest rates on margin accounts
Access to over 45,000 mutual funds, including 17,000 funds with no transac-tion fees
Over 100 order types from limit orders to complex algorithmic trading
Cryptocurrency investing available
Allows the purchase of fractional shares
Allows investors to earn extra income by lending their shares to traders who want to short and are willing to pay interest
Quick order execution
Website can be difficult to navigate
Pricing structure can be challenging to understand
Limited investor education, particularly for novice investors
Limited retirement accounts available
Can be intimidating to less experienced and less active investors
Custom trading algorithms or automated trading are not back tested
Interactive Brokers Top Features
Low pricing and a large selection of securities
Interactive Brokers is best known for offering low per-share pricing and incredibly low margin rates while at the same time providing access to an enormous selec-tion of securities. Interactive Brokers also allows you to complete most types of trades through one integrated account. You will also be able to fund your ac-count in one of 24 different currencies and then trade products in a different cur-rency, all through the same account.
Advanced trading platform
Another top feature is Interactive Brokers’ trading platform which includes every-thing from real-time monitoring, alerts and watchlists to a customizable dash-board. Additional features on the dashboard include charting options and cus-tomizations. Experienced traders can use the Options Strategy Lab, Volatility Lab, Risk Navigator, Market Scanner and Portfolio Builder. The Strategy Lab lets you build complex, multi-stage orders and compare up to five execution strate-gies at simultaneously.
Finally, in addition to self-managed accounts for savvy investors, Interactive Bro-kers offers dozens of themed portfolios focused on everything from social justice and a better planet to undervalued companies and leading institutions.
Interactive Brokers Investment Types
Interactive Brokers allows you to trade in a wide variety of investments, all from a single integrated account. These investments can include:
- Global stocks
- Mutual funds
- Hedge funds
- Cryptocurrencies including bitcoin, bitcoin cash, ethereum, litecoin
Interactive Brokers also offers a variety of accounts that include RRSP, TFSA, individual, joint and institution accounts as well as margin accounts. They will also let you trade in fractional shares. The Interactive Broker platform will also allow you to invest using a wide variety of order types that can help you limit risk, speed execution, improve pricing, preserve privacy, time the market or simplify trades. They also support several third party algorithms to improve your investment outcomes.
Interactive Brokers Fees and Commissions
Very low margin rates are one of the features that make Interactive Brokers appealing to active and advanced investors. Commissions for Interactive Brokers offer tiered pricing based on volume, fixed pricing per share or as a percentage of trade value. For example, on Canadian stock exchanges, the brokerage charges a rate of 0.008 on volumes of less than 300,000 shares of Canadian stocks, ETFs and warrants. That pricing drops to 0.005 for volumes of up to three million. There are several tiers beyond that, and trade volume is measured monthly. The fixed rates are set at CAD 0.01 per share for Canadian stocks and USD 0.008 per share for U.S. stocks. However, there are minimum commission rates, so it’s worth knowing these before you invest.
Interactive Brokers allows for one free withdrawal request per calendar month but will charge substantial fees for withdrawals beyond that, including wires, checks and electronic fund transfers (ETFs). For example, you will pay CAD 12.00 for a wire transfer and CDN 2.00 for an EFT. Prices are dependent on the currency you trade in. There are also additional fees for specific corporate actions, such as a request to exercise appraisal rights, as well as some dividend processing, futures and bond trading. Finally, there are specific fees related to trading in foreign markets and charges for inactive accounts.
Interactive Brokers Fees & Commissions Summary
|Canada Stocks, ETFs, Warrants||Minimum per order||Maximum per order|
|$0.01 per share||$1.00||0.5% of trade value|
|Tiered Commission||Canada Stocks, ETFs, Warrants||Minimum per order||Maximum per order|
|< = 300,000 Shares||CAD 0.008||CAD 1.00||0.5% of trade value|
|300,001 – 3,000,000 Shares||CAD 0.005||CAD 1.00||0.5% of trade value|
|3,000,001 – 20,000,000 Shares||CAD 0.004||CAD 1.00||0.5% of trade value|
|20,000,001 – 100,000,000 Shares||CAD 0.003||CAD 1.00||0.5% of trade value|
|> 100,000,000 Shares||CAD 0.003||CAD 1.00||0.5% of trade value|
Interactive Brokers 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 client portal is a web application that allows you to check quotes, place trades and view account balances, metrics, funding and reporting.
The Trader Workstation is a desktop platform designed for active traders and investors who work with multiple products. IBKR Mobile allows you to trade and monitor on the go through your iOS or Android devices. Finally, IBKR APIs will enable you to build custom trading applications and integrate trading into other programs. The options include a Trader Workstation API, Client Portal API, Excel API and FIX connections that allow institutions to take advantage of Interactive Brokers’ high-speed order routing.
If you would prefer to test drive the program, you can sign up for a free trial of Interactive Brokers, which gives you free access to all trading platforms, including Desktop TWS and IBKR Mobile. You will get USD 1,000,000 in a simulated account and the ability to explore and use all of the company’s tools and services.
Interactive Brokers Investor Education
Since Interactive Brokers is intended for experienced and active traders, it has limited offerings for the new or novice investor. This is not the place to go to learn how to trade. However, the company does boast a wealth of educational opportunities and insight tools. Trader’s Academy is designed to help improve understanding of all the products, markets and tools available in each of the various platforms.
Regular IBKR Webinars provide critical information about current market topics and IBKR tools. There are live webinars listed, and the company also provides most of these webinars on-demand. Trader’s Insight provides market commentary and analysis via a network of more than 70 industry professionals. Interactive Brokers also hosts a blog on transformative technologies and programming and a Student Trading Lab that teachers can access to teach both finance and computer science.
IBKR customers also receive free access to AltaVista Research, Edison Investment Research, EventShares Research, ETF Guide, Morningstar Equity Ownership, Reuters StockReport+, ValuEngine and Zachs.
Interactive Brokers Customer Service
The Interactive Brokers’ website is a little challenging to navigate unless you know exactly what you are looking for. However, customer support is provided via 24- hour phone, email, and chat available six days a week. Their IBot leverages AI and will answer questions in plain English, but you can also chat with a live agent. There are no physical branches, however, to allow for in-person meetings.
The Better Business Bureau has given Interactive Brokers an A+ rating for its customer interactions in the United States, much higher than most investment apps on the market.
Unlike many brokerages, Interactive Brokers is available to customers in 218 countries and territories in multiple languages. Both live, and recorded webinars are available in ten different languages.
Interactive Brokers vs Questrade vs Wealthsimple
For beginner or less active investors, there are less options like Questrade and Wealthsimple that provide a large selection of investment types at low or no commission fees.
Questrade is a Canadian online brokerage for advanced investors with over $25 billion in assets under management. With Questrade, you can open a variety of registered account (RRSPs, TFSAs, etc.) and purchase commission free ETFs. There are no inactivity fees, annual fees or registered account fees. They also offer a robo-advisor service.
New investors can now get $50 in free trades when they open an account and invest $1000.
- Account Fees $0
- Minimum Deposit $1,000
- Asset Types Stocks, Options, Bonds, ETFs, Mutual Funds
- OTC stock fees $0.01 per share, min $4.95, max $9.95; free ETFs, selling costs $0.01 per share
Wealthsimple is Canada’s only no-commissions trading platform that started out as a robo-advisor. Their easy-to-navigate platform and uncomplicated pricing structure makes them ideal for beginners. Wealthsimple offers a large selection of registered and unregistered accounts. There is no minimum investment required to open an account.
New investors can get a $50 cash bonus when they trade a minimum of $150.
Our Final Thoughts
Interactive Brokers is the best option for savvy, active investors who want to avoid paying higher fees to preserve as much of their investment as possible and want access to high-level trading tools and platforms. It offers a wide range of investment opportunities in foreign and domestic markets, making it an excellent and affordable option for investors hoping to expand into global markets. Extremely low margin rates also make it a good choice for advanced investors who know how to play the markets.
While it is not the best choice for beginners, Interactive Brokers is expanding its educational opportunities and making its platforms more user friendly. And, of course, the low rates are available to all investors, regardless of experience.
Interactive Brokers has been in business for over 28 years and has built a solid reputation within the investment community. It is also licensed by numerous central financial authorities and regulators, including the U.K. Financial Conduct Authority (FCA), the U.S. Securities and Exchange Commission(SEC) and The Investment Industry Regulatory Organization of Canada (IIROCK). The company has also received awards and prizes from several major investment organizations listed on its website. It is also a publicly-traded company on the NASDAQ (IBKR). All of these factors suggest that Interactive Brokers is trustworthy.
Although you can open an Interactive Brokers’ account with as little as $100, it is probably not the best place for beginners to start their investment journey. Its of-ferings are intended for institutional investors and sophisticated, active investors who want access to market analysis and other robust tools and the ability to trade in a wide variety of assets. The pricing structure is fair but somewhat com-plicated, as is the Trader Workstation desktop platform, which new investors may find challenging to navigate. However, the company has recently expanded its available education materials, and the web-based platforms are straightforward, making it slightly more appealing to beginners.
There are various alternatives to Interactive Brokers in Canada, including traditional banks and investment companies. Most of the major banks in Canada offer online trading as well as apps and web-based options for trading, including:
- BMO (InvestorLine)
- Scotia Bank Investments
- HSBC InvestDirect
- National Bank Direct Brokerage
- TD Direct Investing
- Royal Bank Direct Investing
These banks offer a variety of discount and full-service options, including managed service options with their investment services. There are also several other discount online alternatives to Interactive Brokers, including: