Is Interactive Brokers a Legitimate Firm?
Are you wondering if Interactive Brokers is a real and safe company? Do you have concerns about the
company’s legitimacy? If yes, you are in the right place. We looked into it and here’s what we found:
Is Interactive Brokers a Scam?
There are two main regulators for securities in the U.S.: FINRA (http://www.finra.org/) and the SEC. Interactive Brokers is a member of both, which gives its customers a lot of protection.
Interactive Brokers’ FINRA membership number is 36418. The company’s BrokerCheck profile shows it has been registered since 1994, which is a long time compared to many new brokers today.
On IB’s profile, there are 80 disclosures. Usually, the broker doesn’t admit or deny any mistakes and pays a fine to settle. One example is a $5.5 million fine paid in 2018 for not having an internal system with written rules.
Interactive Brokers’ SEC membership number is 8-47257. Like FINRA, the SEC makes and enforces many rules and can fine brokers if they make mistakes.
Because Interactive Brokers is registered with these main organizations, it does not need to be registered with any state regulators. But, FINRA only regulates securities, and because IBKR also lets you trade futures and forex, it has to be registered with the National Futures Association too. The NFA membership number is 0258600.
Is Interactive Brokers SIPC/FDIC Insured?
The U.S. Congress has made sure insurance is available on securities accounts in the U.S. Keep in mind, this means “securities accounts.” Things like futures, forex, and other assets that are not securities are not covered by SIPC (the Securities Investor Protection Corporation, http://www.sipc.org), which insures stocks, bonds, and other securities in accounts at Interactive Brokers.
SIPC covers up to $500,000 per customer at Interactive Brokers. Up to half of this amount can be used for cash that is not invested.
IBKR Pro customers who join Interactive Brokers’ FDIC sweep program also get FDIC insurance on cash balances. The total coverage for each customer is $2.75 million.
Large accounts at Interactive Brokers have extra insurance from Lloyd's of London. Like SIPC, this does not cover futures or futures options. Each customer is covered up to $30 million, with $900,000 for cash. There is a total company limit of $150 million. The Lloyd’s insurance is only used if SIPC coverage is all used up.
Top Rated Brokers
Interactive Brokers Better Business Bureau
Besides FINRA, you can also check Interactive Brokers’ profile at the Better Business Bureau (BBB). BBB rates many companies in North America, including financial ones, so it’s another way to see how customers feel about Interactive Brokers.
We found an A+ grade on Interactive Brokers’ BBB profile. This is the best grade the BBB gives, so it’s a positive sign. BBB looks at things like the number of complaints and how quickly the business solves them.
There are currently 20 customer reviews on the BBB page for Interactive Brokers, with an average rating of 1.2 out of 5. While this is low, it likely comes from customers who had a bad experience and wanted to leave a review.
Is Interactive Brokers Safe Verdict
Interactive Brokers is a safe and trustworthy company. There are strong rules from government agencies for all types of trading, and there is insurance for securities and cash in your account. But remember, all investing involves some risk, and no insurance protects you from losses in the market. This is true for all brokers, so Interactive Brokers is as safe as any of them.
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Interactive Brokers Review
Now that we know Interactive Brokers is a trustworthy company, let’s see how it does in key areas.
Investments Choices
Interactive Brokers focuses on letting experienced investors make their own trades. But there is also a robo-advisor, and managed accounts are offered too.
Both individual and business clients can pick from many investment options. Interactive Brokers offers the following:
- ETFs
- Closed-end funds
- Mutual funds
- Stocks
- Option contracts
- Forex
- Fixed-income securities
- Precious metals
- Warrants
- Structured products
- Cryptocurrencies
- Futures and options on futures
The stock section above includes OTC and penny stocks. Along with U.S. investments, Interactive Brokers also gives access to many international markets, letting you trade worldwide.
Website
Interactive Brokers has a good website for trading and research. You need two-factor authentication to sign in, which can be seen as either a plus or a minus.
Once logged in, there are many helpful tools. TradingView powers the charting, giving a strong experience. There are eleven chart styles, like Kagi, Renko, and Baseline. About a hundred technical studies are available, plus lots of ways to customize.
The trade ticket has six order types and bracket orders (stop loss and take profit). There’s also a checkbox for a price management algorithm.
If you want help finding what to trade, use the security screener under the Research tab at the top. It can scan both U.S. and international markets.
Security profiles show a lot of data. To see this, go to a stock’s page and click the Research icon in the upper-right corner.
Mobile App
Clients who need to trade on the go can use Interactive Brokers’ powerful mobile app. The app works on both Android and Apple phones and tablets, and it has many features.
The app has two order entry screens: one is horizontal, the other is vertical. The horizontal version is a wheel system with preset amounts for order size, limit price, and trade amount. You spin the wheel to set your values and then place a buy or sell order.
The vertical ticket is more standard, with a preset limit price. You can swipe a chart from right to left in this mode to double-check prices before trading.
Charts can be viewed in horizontal mode and offer indicators and three chart styles. However, you can only see up to five years of price data per security.
Unlike the website, the mobile app has a demo mode for practice.
Desktop Platform
If you prefer using a computer, Interactive Brokers offers Trader Workstation, a highly advanced desktop program. It comes with many professional tools that experienced traders will appreciate.
Charts can fill your whole screen. There are many technical studies, drawing tools, and you can trade by right-clicking.
The platform’s trade ticket lets you buy and sell international stocks. You get many order types and a large list for direct order routing.
Like the mobile app, Trader Workstation can stream Bloomberg TV for free and has a practice mode to help you learn.
Customer Service
You can reach a company representative 24 hours a day, five days a week by phone. From our experience, most agents are based in India, but there are some in the U.S.
For 24/7 support, there’s the website, which has an AI assistant called iBot. In our testing, it was somewhat useful but not as good as live chat with a person, which is not available.
For human help on the website, you can use internal messaging, which is found under the Help icon at the top right.
Interactive Brokers does not have any physical branches, so these online and phone channels are the only ways to get help.
Pricing
Interactive Brokers accounts have no maintenance fees or minimums, and most commissions are low.
IBKR Lite customers in the U.S. can trade U.S. stocks and ETFs for free. Other products and markets have fees. For instance, trading stocks on Euronext Paris with fixed commissions costs 0.10% of the trade’s value, with a €4 minimum.
Options on U.S. markets cost $0.65 per contract with a $1 minimum for Lite customers. Pro customers can get even lower rates if they trade a lot.
Cryptocurrency trades are charged between 0.12% and 0.18% of the trade’s value, based on monthly volume. The minimum commission is $1.75.
See IBKR Lite vs Pro comparison.
Margin Service
Interactive Brokers offers low margin rates. IBKR Lite clients pay a flat 6.83% at all debit levels. Pro customers have a sliding scale from 5.83% to 4.83%.
It’s easy to upgrade a cash account to margin on the Interactive Brokers website. The link for this is on the settings page, found under the head-and-shoulders icon at the top.
Trader Workstation shows margin requirements for any ticker. To see this, click the advanced tab on the trade ticket, then pick Check Margin.
Additional Services
Cash Management Features: Interactive Brokers focuses on trading tools, not banking. But it does offer a free debit Mastercard.
Initial Public Offerings: Accounts based in Hong Kong can buy IPOs on the Hong Kong Exchange. U.S. accounts cannot buy IPOs.
Extended Hours Trading: IBKR Lite customers can trade U.S. stocks from 7:00 am to 8:00 pm EST. Other assets have different hours.
DRIP Availability: Stock dividends can be reinvested into more shares at Interactive Brokers. This feature is not available for ETFs.
Recurring Mutual Fund Purchases: Interactive Brokers does not offer automatic investing in mutual funds.
Individual Retirement Accounts: Different IRA types are available with no ongoing fees.
Fractional Shares: You can buy fractions of stocks, ETFs, cryptocurrencies, and mutual funds.
Recommendations
Small Accounts: We recommend the IBKR Lite plan for smaller accounts.
Retirement Savers and Long-Term Investors: Even though IRAs are offered, Interactive Brokers is not focused on long-term investing. For example, there are no annuities or a screener for target-date mutual funds.
Charles Schwab has both.
Beginners: Interactive Brokers is designed for experienced traders. New investors should use Charles Schwab.
Mutual Funds: Interactive Brokers has mutual funds, including no-fee funds, but its fund resources are limited.
Firstrade's are better.
ETF and Stock Trading: For professional trading of ETFs and stocks, Interactive Brokers stands out. Trader Workstation gives you a top-tier experience.
Interactive Brokers Review Judgement
Interactive Brokers is a legitimate broker, but it doesn’t excel in every category. Still, experienced traders will find a lot of value here.
Interactive Brokers Promotion
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Updated on 6/20/2025.
Chad Morris is a financial writer with more than 20 years experience
as both an English teacher and an avid trader. When he isn’t writing
expert content for Brokerage-Review.com, Chad can usually be found
managing his portfolio or building a new home computer.
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