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Interactive Brokers vs Etrade
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Interactive Brokers vs Etrade: Commissions, Fees and Investments
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- Stocks and ETFs: $9.99 if 0-149 trades per quarter; $7.99 if 150+ trades per quarter
- Options: $9.99 plus $0.75/contract if 0-149 trades per quarter; $7.99 plus $0.75/contract if 150+ trades per quarter
- Mutual Funds: $19.99
- Futures contracts: $2.99 per contract, per side + fees
- Investment products: stocks, bonds, mutual funds, futures, options, ETFs
- Minimum to open Etrade account: $2,000 for margin account. For securities accounts (except retirement accounts), an account minimum deposit of
either at least $500 in cash or a deposit of securities is required within 60 days of account opening for the account to remain active. There is no initial minimum deposit requirement for retirement, custodial, or employee stock plan accounts. Accounts not meeting the minimum deposit requirement will be closed after 60 days.
- All Etrade fees
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- Stocks and ETFs: $0.005 per share with $1 minimum per trade for SMART routed orders
- Options: $0.70 per contract plus exchange fees
- Mutual funds: $14.95 per transaction
- Investment products: stocks, options, ETFs, bonds, futures, currency transactions
- Minimum to open Interactive Brokers account: $10,000 for non-IRA account, $5,000 for IRA account
- All Interactive Brokers fees
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Etrade vs Interactive Brokers: Pros
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- Very good trading tools
- No IRA account fees, no minimums with electronic statements and confirms
- Minimum to open: $1,000 for cash account, $2,000 for margin account
- Banking products: checking, savings, money market accounts, CDs and credit cards
- No surcharges on large orders, penny stocks and extended hours trading
- Great research amenities
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Low stock commissions for orders with 800 shares or less
- Professional trading platform
- Great margin rates
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Etrade vs Interactive Brokers: Cons
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- High commissions on all investment products
- High margin rates
- Customer service complaints
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- $10,000 minimum to open most accounts
- $30/month minimum commission requirement to avoid $10/month fee
- $10/month for IB market data feed (waived if trade commissions are more than $30/month)
- Fees on modified or canceled orders
- Trader Workstation is designed for professional traders, it is not intuitive; difficult to learn
- Expensive to make trades with over 1,500 shares
- A lot of complains about snobby customer service (experienced it ourselves)
- $1.20 fee to modify or cancel an option order
- Merciless margin tightening and margin calls - IB doesn't care if their customers get completely wiped out
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Etrade or Interactive Brokers: Review Summary
Interactive Brokers (Interactive Brokers Review)
is definitely better priced brokerage company for stocks and ETFs than
Etrade (Etrade Review):
$0.005 per share with $1 minimum per trade versus $9.99 per trade at Etrade.
Interactive Brokers is very expensive for large orders though: 2,000 shares will cost an investor $10, 5,000 shares - $25, etc.
There are no surcharges on stocks under $1 and extended hours trades at either company.
Interactive Brokers comes ahead in trading tools - the firm actually offers one of the best (but very complicated)
trading platforms. The company, however, has the rudest customer service of all online brokers. IB charges $10 monthly fee (and $10/month for market data)
if customer does not make at least $30 in commissions per month. The firm liquidates positions almost as soon as a client gets into
negative territory. Many people lost fortunes during market drop in 2008 after IB tightened margin requirements at the worst
possible time for its customers.
When comparing IRA accounts, Etrade is clearly ahead since it does not have a monthly fee. The firm did not, however, made it into our
Best IRA brokers list.
Interactive Brokers would only work for very active investors who trade a lot. Etrade would be our suggestion for an IRA account and
for "buy-and-hold" investors.
We encourage investors to research other highly rated by investment magazines discount brokers with much lower costs than Etrade
and better than Interactive Brokers services,
like TradeKing (TradeKing Review) and
OptionsHouse (OptionsHouse Review).
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