Interactive Brokers Fees and Minimum Deposit
|Stocks and ETFs|| $0.005 per share with $1 minimum, 0.5% of trade value maximum for SMART routed orders|
|Options|| $0.70 per contract if premium => $0.10; $0.50 per contract if $0.05 =< premium < USD 0.10; $0.25 per contract if premium < $0.05 + exchange fees. Minimum $1 per order.|
|Mutual funds|| $14.95 (minimum size on initial fund order is $3,000, subsequent minimum order size is $100)|
|Corporate and municipal bonds||0.1%* face value (10 bps) if <= $10,000 face value; 0.025%* face value (2.5 bps) if > $10,000 face value|
|Treasuries (bills, notes, bonds)||0.02%* face value (2 bps) if <= $1,000,000 face value; 0.002%* face value (0.2 bps) if > $1,000,000 face value; $5 minimum|
|Metals||0.15 basis point * trade value; minimum $2; storage cost 0.10% per annum|
|US-future and future options||$0.85 per contract|
|Forex||0.20 basis point * trade value if <= $1,000,000,000; minimum $2|
|Investments|| stocks, options, mutual funds, ETFs, bonds, futures, currency transactions, US SSFs, EFPs, metals|
|Interactive Brokers\IB minimum deposit to open account|| $10,000 for non-IRA account, $5,000 for IRA account, $3,000 for anyone age 25 or younger|
|Fees||Interactive Brokers fees|
|Promotion link||Interactive Brokers promotions|
We start our Interactive Brokers review with commissions information. IB is a direct access
broker with pay-per-share commission plan for stocks and ETFs: the rate is
$0.005 for each share, with $1 minimum and 0.5% of trade value maximum. This pricing makes all trades of up to 1,000 shares cheap - between
$1 and $5. But higher size trades are expensive: orders with 2,000 shares cost $10, and orders with 5,000 shares have a very steep price tag
of $25. The pricing structure for European and Asia-Pacific customers is different: to visit broker website
Opening an account with IB takes a long time. The application forms are the longest we've seen and tedious to fill out. After registering,
the user has to verify two deposits that Interactive Brokers makes into their bank account. Once verified, IB sends new customers a letter
to their home address through regular mail with codes that need to be entered before they can start trading. Also, the minimum amount to open
an account is one of the highest in the industry - $10,000 for a regular brokerage account ($5,000 for an IRA account and $3,000 for anyone age 25 or
The company warns customers that if they are not using IB's secure login, it will not be liable if their account is hacked and money stolen.
For secure login customers either have to use a small device that will generate a code to enter during each log on, or a table of codes IB sends
in the mail for the same purpose.
Interactive Brokers Website/Trading Platform/Tools
IB offers three different trading platforms. Their least advanced trading platform is called QuickTrade and it is browser based. It takes a lot of
clicks to get to the QuickTrade and the interface is slow to load and buggy. The annoying dropdown menu on top drops down frequently and gets in
the way. An account is disconnected often and you have to re-login. The order entry is not as fast as it should be. Also, traders need to watch data
carefully while entering orders - sometimes boxes are getting pre-filled with wrong values.
Their second platform, WebTrader, launches in the new browser window, and is much more stable and less buggy. It offers more features and is much more
convenient to use than QuickTrade. WebTrader lets users enter multiple orders even without money to cover all of them: if one order is executed, and the
account doesn't have enough cash to cover other orders, the rest are automatically canceled. Anyone new to trading or to Interactive Brokers
should probably start with WebTrader.
Advanced Trading Platform
The third platform, Trader Workstation (TWS), is one of the best professional trading platforms in the industry. TWS is fully customizable,
with cutting-edge charting and research services, dynamic streaming quotes, tools for risk management, over 50 order types, and the ability to place
orders that go directly to the market.
Users can download Trader Workstation as a stand-alone application or run it from the browser (though this is slower). Both versions require
Java to be installed on the computer. Learn more in Trader WorkStation review.
The best part of TWS is that it is module based, meaning that the trader can select from a variety of different modules and lay them out on the
screen in a way that makes the most sense to their trading style. And if the trader works across multiple monitors, which many do, then they are
able to put up the different modules across multiple screens. This allows them to have as much information available to them at one time as they
The downside of having such a powerful professional trading platform is that it's hard to learn and it is not intuitive. It will be
especially difficult to master for beginner investors.
Interactive Brokers offers mobile apps for iPhone, iPad, Android phones and tablets, and majority of other smart phones. With the apps users get
real-time quotes, charts, and market scanners. Both standard order types and complex option spreads are supported. The apps are rated at
about 4 stars in Google Play and iTunes.
Interactive Brokers Pros
- Low pay-per-share commissions on stock trades with up to 1,000 shares and on options trades of up to 20 contracts
- Professional trading platform
- Lowest margin rates in the industry
- Access to 100 markets worldwide
- Rich selection of products for trading
Interactive Brokers Cons
- $10,000 minimum to open most accounts
- $10 per month minimum commission requirement to avoid $10 monthly fee (rises to $20 monthly if account balance is less than $2,000; waived for $100,000+ accounts)
- $10 monthly for market data feed (waived if trade commissions are more than $10 per month)
- $7.50 quarterly fee for IRA accounts ($30 per year)
- Complicated fee structure
- Trader Workstation is designed for professional traders; it is not intuitive and difficult to learn
- Expensive to make trades with over 1,600 shares
- Lots of customer complains about snobby customer service (and yes, we experienced it ourselves)
- Merciless margin tightening and fast margin calls - IB apparently doesn't care if their customers get completely wiped out
- Minimum size on initial mutual fund order is $3,000 (subsequent minimum order size is $100). Only no-load funds and short term redemption fee funds are offered
- Technical problems with trading platforms and website
Interactive Brokers (IB) is targeting a client base of experienced, professional investors, traders, and hedge funds. The firm is an excellent choice
for anyone who trades on average 1,000 or fewer shares of stocks or ETFs (or up to 20 options contracts) per trade. It delivers excellent trading
platform, fast executions, and the lowest margin rates. Current IB margin rate on up to $100,000 in margin balance is only 1.91%.
Interactive Brokers, however, has a $10 monthly minimum commission requirement to avoid a $10 monthly inactivity fee ($20 monthly if account balance
is less than $2,000) and $10 monthly market data fee. The fee works as "use it or loose it": if a customer traded $4 worth of commission that month
than the inactivity fee is $6. This means that clients who rarely trade might pay up to $240 per year in fees ($360 if their account balance is less
than $2,000)! The fees are waived for accounts with $100,000+ balances.
IB is easily the most fee-rich firm among online brokers. Listing of all the fees takes literally dozens of pages on their website, mostly because
they have a different pricing for clients in U.S., Europe, and Asia, and because there so many products, currencies and markets involved. IB is the only broker we have reviewed that allows only one free withdrawal
request every 30 days and charging customers for additional ACH money withdrawals ($1) and check withdrawals ($4).
Customers should be extremely careful when using margin at the firm: Interactive Brokers liquidates positions almost as soon as account gets
into negative territory, without giving investors a chance to add funds (unlike almost all other brokers). The firm tightened margin requirements
at the worst possible times in 2008-2009, and many customers who were using margin got wiped out.
Interactive Brokers has a well-deserved reputation for very rude and obnoxious customer service. Because of that and the complexity of their
trading platform, it is not a brokerage for beginner investors (IB actually discourages
beginners to apply for an account). And the firm is definitely not the way to go for those who rarely trade, trade orders of over 1,500 shares, or
practice "buy-and-hold" investing strategy.
We recommend Interactive Brokers only to day-traders, active investors, and hedge funds. Investors who are not in these categories and who are
looking for cheap trades often go with OptionsHouse: the firm offers a flat $4.95
per trade commission for unlimited shares, no monthly fees, simple pricing structure, and award-winning trading tools.
Company never offers promotions in the U.S.
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