Interactive Brokers Review: How Competitive Is This Brokerage?

Interactive Brokers Review: How Competitive Is This Brokerage?

Interactive Brokers a great platform for those looking for low commission fees and large international market access

Good for

  • Investors seeking a low cost platform
  • Investors who want to trade on the foreign exchange market

Bad for

  • Investors seeking the lowest minimum fee in Singapore

Editor's Rating

4.5/5.0

Interactive Brokers charges some of the lowest trading fees, offers competitive access to international markets, and has a wide range of products you can trade. This makes it a great option for investors seeking a platform to trade international securities.

Summary of Interactive Brokers' Online Brokerage
Lowest commission fees for international trading
Invest in 26 international markets
Premium pricing for high-volume traders
Large amounts of products to trade
Promotions:

Table of Contents

What Makes Interactive Brokers Stand Out to Investors

Interactive Brokers stands out due to its low trading fees and large scope of the global markets investors can trade with. In addition to this, the brokerage allows account holders to trade more products than other online trading platforms. To get a sense of how competitive Interactive Brokers' commission charges are, it is helpful to compare their fees to other online brokerages in Singapore. Still investors should be aware that Interactive Brokers charges a minimum monthly fee of S$10 for accounts with balance between S$2,000 and S$100,000, which can materially increase the cost of using this brokerage for those who don't trade frequently or aren't investing hundreds of thousands of dollars.

Investment Opportunities at Interactive Brokers

Interactive Brokers offers several types of brokerage accounts depending on whether you are an individual investing or you are jointly investing. With their Individual Account, customers can trade cash, securities and portfolio margins. Moreover, the online platforms gives access to comprehensive trading tools to trade stocks, options, futures, currencies, bonds, funds and more. One special feature Interactive Brokers has is that if an exchange provides a rebate, they will pass some of the savings directly back to the customer. So, whether you are a new or experienced trader, Interactive Brokers' individual account will give you everything you need to trade.

  • Stocks
  • ETFs
  • Securities Options
  • Futures
  • Futures Options
  • Fixed Income
  • Spot Currencies
  • Mutual Funds
  • Stock Futures
  • Indices
  • Warrants
  • Structured Products (Turbos and Certificates)
  • Metals
  • Callable Bull/Bear Contracts (CBBCS)
  • Single Stock Futures
  • Foreign Exchange Trading

Interactive Brokers Fees

Interactive Brokers charge some of the lowest fees in the market. For example, to trade in Singapore with Interactive Brokers, you will be charged a minimum fee of S$2.50 and a 0.08% minimum commission rate. To put that in perspective of the online trading market in Singapore, the average minimum fee is S$20, while the minimum commission charge is 0.17%-0.22% per trade. The subsections below go into depth on the charges you could expect to pay.

Fee Comparison: Interactive Brokers vs Tiger Brokers Markets

Interactive BrokersTiger Brokers
SG Stocks Commission Fee (Min. Fee)0.08% (S$2.50)0.08% (S$2.88*)
U.S. Stocks Commission Fee (Min. Fee)$0.0035 (USD 0.35)USD$0.01 (USD 1.99)
Hong Kong Stocks Commission Fee (Min. Fee)0.08% (HKD 12)0.06% (HKD 15)
Japan Stocks Commission Fee (Min. Fee)0.050% (JPY 80)N/A
S$0 until 31 Dec 2020

Foreign Exchange Fees

Interactive Brokers is also a great option for individuals seeking to conduct foreign exchange trades. This is because the online trading platform's forex spreads are typically the cheapest available in Singapore. While Interactive Brokers does charge a commission fee for FX trades, the fee usually works out to a few dollars, making it somewhat negligible.


Currency
Min. SpreadIndustry Average
EUR USD0.10.7
USD JPY0.10.7
GBP USD0.30.9
AUD USD0.10.7
* figures based on min. advertised spreads advertised October 21, 2020

International Security Trading Fees

Trade Volume (US Shares)Commission Fee per Share
300,000 or less$0.0035
300,000 - 3 million$0.002
3 million - 20 million$0.0015
20 million - 100 million$0.001
100 million+$0.0005
Min. fee $0.35 per order, Max. fee 1% of trade value
Monthly Trade Value (HKD)HK Commission FeeMin. Fee (CNH Denominated)
HKD 15,000,000 or less0.08%CNH 15
HKD 15 million - 300 million0.05%CNH 10
HKD 300 million - 900 million0.03%CNH 7
HKD 900 million - HKD 2 billion0.02%CNH 5
HKD 2 billion+0.015%CNH 3
Monthly Trade Value (JPY)Commission FeeMin. Fee
JPY 150 million or less0.05%JPY 80
JPY 150 million - 3 billion0.04%JPY 70
JPY 3 billion - 9 billion0.03%JPY 60
JPY 9 billion - 20 billion0.02%JPY 40
JPY 20 billion - 100 billion0.015%JPY 30
JPY 100 billion+0.010%JPY 20

Investor Eligibility Requirements

Consider this if you want to trade international securities while minimising commission fees

To apply for an account with Interactive Brokers, you need to submit a copy of your identification card, your employer's name, address and phone number, and your bank account number to fund your account. You can expect to receive an answer within 1-3 working days.

Interactive Brokers gives individual investors a great platform to invest in international securities and the foreign exchange market. With some of the lowest fees, access to 26 international markets, and a wide range of products and services, those who invest with a high trade volume and large total value will benefit from trading with Interactive Brokers.

William Hofmann

William is a Product Manager at ValueChampion Singapore, helping consumers and SMEs find the best banking products through comprehensive analysis of data. He previously was an Economic Consultant at Industrial Economics Inc, where he conducted a variety of research and economic analyses. He graduated from University of Vermont with degrees in Economics and Psychology. His work has been featured on a variety of major media such as the Straits Times, the Business Times, the Edge, DailySocial, the Entrepreneur and more.

Comments and Questions