Interactive Brokers Review 2024: Pros, Cons and How It Compares

Where Interactive Brokers shines

IBKR Lite: Interactive Brokers has long been a popular broker for advanced traders, but in 2019, the company launched a second tier of service — IBKR Lite — for more casual investors. With IBKR Lite, you get unlimited free trades of stocks and exchange-traded funds that are listed on U.S. exchanges.

Investment selection: If you're interested in trading other investments, including options, futures, mutual funds, crypto, fixed income and more, you can do that on hundreds of exchanges in dozens of countries.

Advanced platform: As the name implies, IBKR Pro is geared toward advanced traders. If that's you, you'll probably like the broker's per-share pricing of $0.005 per share, advanced trading platform, and unmatched range of tradable securities — including foreign stocks.

What type of investor should choose Interactive Brokers?

Advanced traders: Interactive Brokers' best-in-class investment selection, versatile trading platforms and unusually low margin rates make it a great choice for seasoned active investors and day traders.

International investors: Interactive Brokers is available in over 200 countries, making it one of the most accessible brokers we review for investors outside of the U.S. It also offers direct access to stocks, bonds and currencies from dozens of countries at no additional cost, making it an ideal broker for investors who want to diversify abroad.

High-net-worth and professional investors: In addition to the incredibly wide investment selection available to all users, Interactive Brokers offers accredited investors access to investments that are generally not available to the public, such as hedge funds. It also offers a variety of tools and specialized accounts for investment professionals such as fund managers, financial advisors and family offices.

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Interactive Brokers at a glance

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How to sign up for an Interactive Brokers account

To open an Interactive Brokers account, you'll need to gather information such as your Social Security number, then head to the broker's app or website, choose between opening a taxable brokerage account or an IRA, and fund your account.

Interactive Brokers offers more funding options than just about any other broker we review. Some, like snail mail, can take a week or more, but others, such as wire transfers, can settle in less than a day.

Once your funds settle (Interactive Brokers doesn't offer instant deposits or provisional buying power), you can start trading, although you may need to fill out some questionnaires, such as disclosures about your type of employment, before you place a trade.

What to know about Interactive Brokers' fees

Interactive Brokers is one of the best brokers we review in terms of account fees; it has no account minimum and charges no annual fees, inactivity fees or transfer fees at all.

When it comes to trading costs, IBKR Lite users get free stock trades, as well as option trades that only have a $0.65 per-contract fee, in line with many other brokers.

IBKR Pro users pay small commissions on stock trades in exchange for faster and more price-efficient order execution. They can choose between a fixed $0.005 per share commission, or a variable commission between $0.0005 and $0.0035 per share depending on volume. IBKR Pro users can also get a volume discount on options trades, and can pay as little as $0.15 per contract or as much as $0.65. Certain ETFs are commission-free for Lite and Pro users alike.

IBKR Lite makes money for Interactive Brokers via payment-for-order-flow (PFOF), a system in which customer orders are routed through trading firms that pay Interactive Brokers. These trading firms execute customer orders and use the order data in their own trading decisions, which may result in slightly slower and less-optimally-priced execution for customers than non-PFOF execution. For most investors, the effects of PFOF are negligible, but they may put high-volume day traders at a slight disadvantage to non-PFOF traders. IBKR Pro does not participate in PFOF.

Interactive Brokers' trading platforms and apps

The casual traders who find IBKR Lite appealing will find the IBKR Mobile app or Client Portal platform adequate for their trading needs. Interactive Brokers has clearly put some work into its mobile trading experience in recent years; its flagship app now offers a quick and intuitive slide-to-execute trading workflow that doesn't skimp on features or customization. IBKR Mobile can, however, be a bit laggy at times, and sometimes takes a while to log you in.

But both IBKR Lite and IBKR Pro traders seeking something more powerful can now enjoy access to IBKR Desktop, which is one of the most richly featured trading platforms available for advanced traders.

The platform is fast and includes standard features such as real-time monitoring, alerts, watchlists and a customizable account dashboard that allows investors to screen for multiple metrics simultaneously. An "option lattice" helps traders find option contracts on a particular stock that are outliers in terms of price, volatility or other key metrics.

Other tools available to IBKR customers through their various platforms include a volatility lab, advanced charting, heat maps of sector and stock symbol performance, paper trading and a mutual fund replicator, which helps users identify ETFs that replicate the performance of a selected mutual fund but offer lower fees. Interactive Brokers For You notifications offer customized alerts about events that could affect a trader’s investments.

In 2024, Interactive Brokers launched ForecastTrader, a web platform for trading forecast contracts. These are exchange-traded investment instruments that pay out $1 if a particular event (such as the Fed raising interest rates) happens, and $0 if it doesn't. Traders buy "yes" or "no" positions on forecast contracts in advance, for some amount between $0 and $1, depending on odds set by the market. Interactive Brokers users who have permission to trade futures can use ForecastTrader to speculate on economic data releases, climate events, and even election outcomes.

Worth noting: Another broker we review, Zacks Trade, offers its customers access to white-labeled versions of IBKR's Trader Workstation product. Zacks Trade charges higher trade commissions, but offers clients free calls with support reps who are licensed brokers. It's an option worth considering for traders who want the power of Interactive Brokers' trading platform alongside a bit more personal support.

For investors looking to trade with a conscience, Interactive Brokers offers an Impact Dashboard, free to all users. The dashboard allows investors to select their personal investment criteria from 13 principles (including clean air and water, LGBTQ inclusion and gender equality). Investors can also exclude investments based on 10 categories, such as animal testing, corporate political spending and lobbying, and hazardous waste production.

In addition to its flagship mobile app, desktop app and web portal, and the web-based ForecastTrader, Interactive Brokers also offers the IMPACT app, an ESG-focused investing app, as well as the internationally-focused GlobalTrader app. It also offers APIs. It's a somewhat-overwhelming choice of platforms, but it offers something to almost every type of active investor.

However, there are a few things that prevented Interactive Brokers from earning the highest possible score for its trading platforms, such as the lack of IPO access, and the fact that the broker accepts PFOF for Lite customers.

Interactive Brokers' investment selection

Interactive Brokers offers something for everyone here: Advanced traders will love the huge selection of products, including standard offerings of stocks, options and ETFs, plus precious metals, forex, warrants, futures and event contracts. The broker also offers overnight trading on more than 10,000 domestic stocks and ETFs.

Interactive Brokers offers one of the widest bond selections of any broker we review, giving investors direct access to Treasury bonds, corporate bonds, municipal bonds, CDs and even sovereign bonds from other countries. Some other brokers only offer bond access in the form of bond funds — and those are available on IBKR as well.

The broker also offers fractional shares of both domestic and Canadian stocks and ETFs. The ability to purchase a portion of a company's stock, rather than a full-priced share, makes it easier to invest in companies that have lofty share prices. That, in turn, makes it easier to maintain a diversified portfolio, especially for investors with smaller accounts.

Finally, Interactive Brokers offers some of the lowest margin rates in the business. As of this writing, margin rates for Lite customers are just 7.83% (the benchmark rate plus 2.5%) and for Pro customers are 5.83% to 6.83% (benchmark plus 0.5% to 1.5%) depending on volume.

Crypto offering:

Interactive Brokers introduced cryptocurrency trading in 2021, and the offering gives users 24/7 access to Bitcoin, Ethereum, Litecoin and Bitcoin Cash. And while the service doesn't offer commission-free trading like some brokers do, the fees are pretty minimal, and are capped at 1%.

More advanced crypto investors may want to opt for a pure-play crypto brokerage instead, however. Like many other traditional stock brokers, IBKR does not offer crypto-crypto trading pairs or staking functionality. It does, however, allow users to withdraw crypto to their own wallets, which puts it ahead of many other traditional brokers who offer crypto in terms of functionalities.

Other key Interactive Brokers features

Research and data

The selection of research and data providers Interactive Brokers offers is much larger than any other broker we review, and includes over 200 domestic and international sources of news, analysis and market data. Many are free, but some require a monthly subscription for access.

A few providers available to all clients include Zacks Investment Research, Morningstar Equity Ownership, Market Realist, 24/7 Wall Street and TheStreet.

Customer support

Interactive Brokers offers 24-hour phone, email and chat support starting 8 a.m. Eastern time Monday through 8 p.m. Friday, and chat support from 1 p.m. to 7 p.m. Sunday.

Its educational offerings are extensive — IBKR Campus offers 84 English-language courses on various investment topics, and 4 non-English-language courses.

Interactive Brokers' website contains a huge volume of information, and it's sometimes easy to get lost while trying to understand the commission structure for Pro users, or figuring out whether you're on the institutional or individual investor side of the site. However, important information such as investment selections and account FAQs are fairly easy to find, and Interactive Brokers is working on streamlining its website.

Execution quality

Interactive Brokers earns high marks for its outstanding order execution quality — it says 100% of trades for S&P 500 and non-S&P index stocks are executed at the National Best Bid and Offer (NBBO) price or better, for both Lite and Pro users.

IRA account

Interactive Brokers also offers IRA accounts, which are individual retirement accounts. Most financial advisors recommend saving for retirement in an IRA — alongside a employer retirement account, if applicable, like a 401(k) — because of the lucrative tax advantages. You can have an IRA in addition to a standard taxable brokerage account, such as one you might use to trade stocks or invest for non-retirement goals.

Margin discount

Margin traders will benefit from the low rates at Interactive Brokers. For IBKR Pro customers, the margin rate is currently 6.83% (benchmark rate plus 1.5%), and NerdWallet users get an extra 0.25 percentage point discount. For IBKR Lite, it's 7.83% (benchmark rate plus 2.5%). Those rates apply on balances between $0 and $100,000; the rates drop at higher balances. The broker charges a blended rate based on the size of the margin loan, and has a calculator on its website to help investors quickly do the math based on their balance. (Only U.S. residents who open and fund a new IBKR Pro account are eligible for the discounted margin rate.)

Good to know about Interactive Brokers

Occasional mobile app hiccups

IBKR Mobile strives to create a smooth mobile trading experience that doesn't sacrifice any capabilities, and it delivers ... most of the time. The app has a few technical and user-experience kinks that could be worked out.

Interactive Brokers takes security seriously, and the app requires you to log in with your username and password if you haven't used it for a while — as it should. However, there's no convenient passcode system like those offered by Robinhood or Webull, and the login process sometimes takes a while due to what seem to be connection issues on Interactive Brokers' end.

The app also has a bit of a lag problem: Taps don't always register right away. This isn't such a big deal, but it can make the trading experience feel a bit precarious given the immense range of capabilities IBKR Mobile offers. For example, one of our reviewers almost accidentally opened a short position on a stock they were trying to sell, as a result of mistakenly setting up an order to sell more shares than they owned due to tap-lag.

Low interest rate on uninvested cash for small accounts

Interactive Brokers pays competitive interest rates on uninvested cash — if you meet some fairly substantial cutoffs in cash balance and overall account value. The broker does not pay any interest on balances below $10,000, and even for larger accounts, it only pays interest on the portion above $10,000.

That said, those above-$10,000 interest rates are pretty good compared to the rates paid by other brokers. Lite accounts currently earn up to 3.33%, the benchmark federal funds rate minus 1.5% — while Pro accounts currently earn up to 4.33%, the benchmark rate minus 0.5%.

There's also a tiered component to Interactive Brokers' cash yield which depends on your account's net asset value (NAV). Only accounts with a NAV of $100,000 or more will earn the top interest rates; smaller accounts will earn a reduced amount. This makes the cash interest rate system at Interactive Brokers one of the most complicated and high-barrier-to-entry of any broker we review, although Interactive Brokers offers a handy calculator on their website that can help Lite and Pro users alike estimate how much they'll earn.

Is Interactive Brokers safe?

No investment is completely protected against the risk of loss — but many brokers carry various types of insurance that protect customer funds from bank or broker insolvency, and Interactive Brokers is no exception.

The broker is covered by Securities Investor Protection Corporation (SIPC) insurance, which protects up to $500,000 per account, with a cash sublimit of $250,000. On top of this, Interactive Brokers pays for excess SIPC coverage, extending its protection by an additional $30 million and $900,000 in cash per account, although futures are excluded from this excess coverage.

Interactive Brokers is also regulated by the Securities and Exchange Commission and the Financial Industry Regulatory Authority, which ensure its compliance with federal securities laws and industry regulations.

Is Interactive Brokers right for you?