5 min read

Interactive Brokers Review (2022)

Interactive Brokers is by far the most cost-effective brokerage with a comprehensive set of features from algorithmic trading, charting, wide access to markets and more.
Interactive Brokers Review (2022)

What is Interactive Brokers?

Interactive Brokers (IBKR) is a leading low-cost global brokerage offering trading access to more than 150 markets in 33 countries and 25 currencies.

It also offers industry-leading lowest commissions starting at $0 with no added spreads, platform fees, or account minimums.

Furthermore, it offers one of the best margin financing rates in the industry, and you can earn additional income by lending out your shares.

Why Interactive Brokers

Here are the top reasons why you should choose Interactive Brokers:

  • Comprehensive market access with 150 markets, 33 countries, and 25 currencies
  • Multi-platform trading on the web, desktop, mobile, or API
  • Multiple order types supported from limit, market to algorithmic orders
  • Low trading costs and margin loan rates
  • Support securities-based lending for extra income
  • Comprehensive reporting features
  • $0 account maintenance fees

Interactive Broker's products and markets

You can invest in almost any market in the world with Interactive Brokers.

The following products are available for trading:

  • Stocks and ETFs
  • Options and Warrants
  • Futures and FOPs
  • Spot Currencies
  • Cryptocurrencies
  • US Spot Gold
  • Bonds
  • Mutual Funds
  • Hedge Funds

You can find a complete list of markets available for trading for each product here.

Interactive Brokers Fees

Interactive Brokers comes in two pricing plans: IBKR Lite and IBKR Pro.

IBKR Lite is targeted at retail investors and casual investors while IBKR Pro is more for professional and institutional investors. IBKR Lite comes with unlimited, commission-free trading on US exchange-listed stocks and ETFs with no account minimums or inactivity fees.

In contrast, IBKR Pro charges a small fee for trades, depending on the pricing tier (fixed or tiered). The primary benefit of IBKR Pro is the higher quality of trade execution – IBKR makes money off payment for order flow on IBKR Lite but not IBKR Pro.

Here's a table illustrating their differences:

Trading Fees

IBKR LITE IBKR PRO
Commissions:
US Exchange-Listed Stocks / ETFs Commission-free Fixed or Tiered Pricing
Other Stocks / ETFs Fixed Pricing Fixed or Tiered Pricing
Options Fixed Pricing Fixed or Tiered Pricing
Futures Fixed Pricing Fixed or Tiered Pricing
Currencies Tiered Pricing Tiered Pricing
Bonds Tiered Pricing Tiered Pricing
Mutual Funds Fixed Pricing Fixed or Tiered Pricing

Account Fees

IBKR LITE IBKR PRO
Account Fees:
Minimum Balance USD 0 USD 0
Maintenance Fee USD 0 USD 0
Interest Paid on Idle Cash Balances3 Benchmark minus 1.5% Benchmark minus 0.5%
Interest Charged for Margin Loan Benchmark plus 2.5% Begins at Benchmark plus 1.5%, with lower rates for higher loan values

Trading fees vary by the market and product that you're trading on.

Trading fees for US stocks, ETFs and warrants 
Trading fees for USD-denominated stocks, ETFs and warrants on LSE
Trading fees for SGD-denominated stocks, ETFs and warrants on SGX

A full list of commissions can be found on their pricing page

IBKR's fee structure is attractive on many fronts, as users have the option to select whether they'd like no-cost trading on US-listed stocks and ETFs while on IBKR Lite or switch to IBKR Pro and receive better execution prices and margin rates.

Interactive Brokers Margin Rates

Margin trading is the ability to borrow money from your broker to purchase securities, using your portfolio as collateral. Margin trading is a form of leverage and it increases one's purchasing power.

To enable margin trading, your account must be a margin account. There are two types of margin accounts at IBKR:

  • Reg T Margin – This permission is based on the rules-based model governed by the Fed. This account type allows you to borrow cash to complete a transaction, as well as to conduct short sales, so long as all activity complies with the regulatory restrictions of Regulation T
  • Portfolio Margin – This permission is based on the risk-based margin model. The risk is assessed holistically based on the contents of your portfolio and determines the buying power and margin requirements

Margin accounts also enable investors to short stocks. Cash accounts do not have the ability to short.

Interactive Brokers offers one of the cheapest margin rates across its competitors by a fairly wide margin.

US margin loan rates compared

IBKR uses a blended rate to calculate margin based on the tiers below. For example, for a balance over USD 1M, the first $100K is charged at the Tier I rate (2.83%), the next $900K at the Tier II rate (2.33%), and so on.

USD blended rate as of May 2022
SGD blended rate as of May 2022

IBKR accrues interest on a daily basis and posts actual interest monthly on the third business day of the following month.

Calculation example for a $1M balance

Interactive Brokers Platforms

Interactive Brokers support multiple platforms to place your trades and invest globally.

Client Portal

A web application serves as your one-stop destination to check quotes, place trades, see account balances, P&L, and key performance metrics, funding, reporting, and more.

Trader Workstation

A desktop platform designed for active traders and investors who trade multiple products and require power and flexibility.

IBKR Mobile

Easily trade and monitor your IBKR account on the go from your iOS or Android device.

IBKR GlobalTrader

Easily trade global stocks (individual, mutual funds, and ETFs) and cryptocurrencies from your iOS or Android device (tablet or smartphone).

IMPACT

IMPACT makes it easy to find and invest in companies that share your values, helping to better align your portfolio with the kind of world you want to create.

Feature comparison across platforms

Wrapping up

Interactive Brokers offers one of the most comprehensive trading features for investors. With its low-cost trading and foreign exchange fees, global market access, multi-platform connectivity, and a good reputation built over the years, it's our brokerage recommendation of choice.


Get the latest updates on Telegram or by subscribing to the email list.