Individual Retirement Accounts at Interactive Brokers
Main points:
• Interactive Brokers and its related company, Interactive Advisors, both provide Individual Retirement Accounts (IRAs).
• There are several IRA categories at Interactive Brokers and Interactive Advisors.
• IBKR does not charge ongoing IRA fees.
If you require a tax-advantaged plan to help you invest for retirement, Interactive Brokers might have a suitable option. Here is complete information on the company’s retirement plan:
Overview of IRAs at Interactive Brokers
A brokerage profile at Interactive Brokers can be opened as an IRA. The firm offers these IRA variants:
• Roth
• Traditional
• Rollover
• Inherited
• SEP
• SIMPLE
The Rollover IRA solely offers traditional tax treatment. Still, a normal Roth IRA can accept a rollover, which solves that. The Inherited IRA can be established as either Roth or traditional. Despite legislative revisions, SEP and SIMPLE accounts are still suitable only for pre-tax deposits.
Overview of IRAs at Interactive Advisors
Interactive Brokers has a related company called Interactive Advisors. As the name suggests, this business provides advisory profiles instead of standard brokerage profiles. An IRA can be opened with Interactive Advisors as well. However, the advisory division of the firm directly offers only Roth, Traditional, and Rollover plans.
There is a way around this limitation. If you open any form of IRA at Interactive Brokers, you can partition it for usage at Interactive Advisors. For instance, you can open a SEP IRA at the brokerage branch and designate a part of it for Interactive Advisors. Thus, any IRA that exists at Interactive Brokers can also be utilized at Interactive Advisors.
Interactive Advisors functions purely as a robo service, so every IRA there is an automated plan.
Available Investments
A brokerage IRA can purchase and sell the majority of instruments that taxable accounts can. This lengthy list consists of stocks, bonds, metals, futures, options, ETFs, and mutual funds. International markets are available as well. Cryptocurrencies are an exception that brokerage IRAs cannot trade. Certain Master Limited Partnerships (MLPs) are also restricted.
A self-directed IRA at Interactive Brokers has access to the company’s lineup of target-date mutual funds, which aim to build a retirement fund over a long period. We located options from Vanguard and JPMorgan.
A robo IRA with Interactive Advisors has access to the same assets as a taxable robo plan: stocks and ETFs. The stock and ETF offerings are smaller than what brokerage accounts can access, and they are divided into various investment themes. These include:
• Technology
• Mindful Business Models
• Small Cap Dividend
• Telecom
• Consumer Discretionary
Some themes stick to stocks only, while others are ETF-based, and still another group blends both.
Limited Margin for IRAs
Both robo and brokerage IRAs with IBKR can opt for limited margin. By default, a managed IRA already has limited margin, permitting trades with unsettled resources. A brokerage IRA, in contrast, must request limited margin. This can be done easily on the client portal (the site). Just click the profile icon in the upper-right corner and pick the Settings link. On the Settings page, move down to the blue link for Account Type. Select this and follow the directions to apply for limited margin. Although IBKR provides portfolio margin, that feature is not open to IRAs at all.
Once it is granted, the limited-margin IRA can execute certain option spreads and do the same activity as an advisory IRA: trade with unsettled capital. Interactive Brokers does not allow limited-margin IRAs to borrow currencies. To submit an order in a non-base currency, a currency conversion must be done. Withdrawals are allowed only in U.S. dollars, although an IRA can be set up in any base currency.
Futures can be traded in a brokerage IRA, though the margin requirements are significantly higher in retirement accounts.
IBKR IRA Fees
A self-directed IRA with Interactive Brokers has no required initial deposit. It can be opened with any amount or nothing at all. There are no periodic costs. Commissions are set at zero for U.S.-listed stocks and ETFs for U.S. residents.
A managed IRA with Interactive Advisors needs at least $100 to get started. Some portfolios will ask for more. In this case, there is an annual management charge ranging from 0.10% up to 0.75%, based on the particular strategy.
Opening an IRA at IBKR
It is quite straightforward to open a retirement profile with Interactive Brokers or Advisors. Click on the red button on either site to open an account (IB) or to begin the signup process (IA). To create a robo IRA directly via the Advisors site, a U.S. residential address is required.
Current IBKR users can open an IRA by accessing the site and visiting the Settings page we mentioned. Here, you will find a button at the top to initiate a new account.
In general, the American branch of IBKR does ask for a Social Security Number to open an investment profile under any tax classification. Foreign nationals residing in the U.S. might be able to use a passport or foreign tax ID.
IRAs at Interactive Brokers can be accessed by residents of countries outside the U.S.; but opening one directly through Interactive Advisors requires a U.S. address. There can be limitations at the brokerage unit. For instance, Interactive Brokers requests a Social Security Number or Individual Taxpayer Identification Number from residents of certain nations, including Singapore, Australia, Hong Kong, India, and Canada.
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IBKR IRA Review Judgment
Interactive Brokers and Interactive Advisors present IRAs in multiple formats with exposure to various types of investments. The fees at the brokerage arm cannot be beaten, and the advisory branch remains very competitive.
Updated on 3/5/2025.
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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