Interactive Brokers and Saxo Markets are two great online trading platforms that offer a wide market access and competitively low fees. Despite their similarities, there are a few distinctions that you should keep in mind prior to making a decision between the two.
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Interactive Brokers vs Saxo Markets: Overview
Interactive Brokers and Saxo offer some of the largest market access and most varied financial products you can trade with for online brokerages. With access to 36 countries, Saxo Markets allows customers to trade stocks, ETFs, bonds, mutual funds, CFDs, futures, commodities, and foreign exchange. Their platform makes it fairly easy to use for beginners as well.
Interactive Brokers, which gives customers access to 26 international markets, lets you trade all of those products and more, including fixed income, indices, warrants, structured products, metals, and foreign exchange, among others. With a more advanced platform, this is a great tool for expert traders. Also, if you prefer having a larger variety of products to trade over the number of markets, then Interactive Brokers is a better choice for you.
Interactive Brokers vs Saxo Markets: Pricing
One of the most important things to be aware of prior to choosing a brokerage is the fee you will have to pay per trade. Our research found that Interactive Brokers has lower commission fees and minimum trade amounts compared to Saxo Markets. However, Interactive Brokers charges an inactivity fee of S$0-S$20 per month which could make it costly for inactive traders. Furthermore, if you are inactive for over 90 days, your account will automatically expire.
On the other hand, Saxo costs S$10 per trade. However, they are currently running a promotion until April 30th, 2021 where new customers will not have to pay a commission fee (S$0) and existing customers will get a reduction, paying only S$5 in commission per trade. Thus, Saxo's promotion renders its services one of the cheapest available. Check out the tables below to rank the two.
Trading Fees Comparison: Interactive Brokers vs Saxo Markets
|Interactive Brokers||Saxo Markets|
|SG Stocks Commission Fee (Min. Fee)||0.08% (S$2.50)||0.08% (S$5)|
|U.S. Stocks Commission Fee (Min. Fee)||$0.0035 (USD $0.35)||0.04%-0.06% (USD $3-$4)|
|Hong Kong Stocks Commission Fee (Min. Fee)||0.08% (HKD 12)||0.10%-0.15% (HKD 60-90)|
|Japan Stocks Commission Fee (Min. Fee)||0.05% (JPY 80)||0.10%-0.15% (JPY 1,000-1,500)|
|Euro Stocks Commission Fee (Min. Fee)||0.05% (EUR 1.25)||0.05%-0.10% (EUR 5-8)|
Other than trading costs, most brokerages charge extra fees that could influence your decision to trade with them. Listed below are the extra costs you can expect to pay with each broker.
|Interactive Brokers||Minimum Deposit||S$0|
|Saxo Markets||Minimum Deposit||S$3,000|
For Interactive Broker account holders whose balance is less than USD $2,000, you must pay upwards of S$20 per month to retain your account. If your balance exceeds USD $2,000 but does not surpass USD $100,000, you will have to pay up to S$10 per month. These inactivity fees are high compared to other brokerages. Thus, Interactive Brokers will be the better option for high frequency traders who want to take advantage of the cheaper rates. On the other hand, infrequent traders may end up saving money with Saxo.
Interactive Brokers vs Saxo Markets: Special Features
Saxo Markets platforms are highly intuitive and great for new investors. Their SaxoTraderGo platform and Saxo Academy will provide users with interactive tools to help them learn while they invest. This includes, but is not limited to, annotation devices, pattern trackers, comparison features, and up-to-date third-party market data. Saxo Bank's website also contains several informational videos that can support your research, while their 20-day trial period will help you solidify your knowledge.
Interactive Brokers, on the other hand, has a platform equipped for experienced traders. TraderWorkstation, their all-inclusive online program, offers tools such as SmartRouting, which helps you find the best markets to invest in at the lowest cost, and Option Labs, a tool that assists you in predicting outcomes for trading options. They also offer a demo period, so getting familiar with each programme might be the best way to eventually decide which service to procure.
Interactive Brokers vs Saxo Markets: Eligibility
Account holders must be 18 years of age or older and provide a government-issued identification, proof of address and employer details. It takes 1-3 business days to process your application, after which you can directly transfer your money into your account.
With both platforms, you can obtain either a basic or advanced account. For Saxo Markets, the accounts are tiered based on how much you initially deposit, from S$3,000 for the Classic account (the minimum), S$300,000 for Platinum, and S$1,500,000 for VIP. With the different types of accounts come differences in commission fees. For instance, the Classic account charges 0.04% for US trades, while the VIP account charges 0.06%. Likewise, Interactive Brokers offers both IBKR Lite and IBKR Pro. However, IBKR Lite is currently unavailable for Singapore residents. The Pro version might very well be worth it though as this version offers the cheapest rates.
How to Choose
Simply put, both Interactive Brokers and Saxo Markets are great tools to invest online. If you are an experienced, active trader who is looking for the lowest fees, or want to pay a low minimum deposit, Interactive Brokers would work well for your needs. However, if you prefer a platform that is great for beginners, also offers low fees, and will provide you with the largest market access, then Saxo Brokers is the best tool.
That being said, it is always advisable to shop around and compare the best online trading platforms. By synthesizing the information and determining which factors are best for you, you will find the best online brokerage to invest with.