Interactive Brokers Australia review

By   |   Verified by Debbie Duncan   |   Updated 29th August 2022

Interactive Brokers Australia Review
  • Well known and popular for the low brokerage fee structure.
  • Impressive range of asset classes in multiple currencies can be traded in one account.
  • An advanced suite of trading platforms for everyone from retail investors to professionals and businesses with tools for technical and fundamental analysis.

The Interactive Brokers trading platform is available through a website and mobile app. Investors can trade in stocks, options, futures, FOPs, ETFs, warrants, structured products, SSFs, forex, cryptocurrencies, metals, indices, fixed income and mutual funds. Interactive Brokers is available across 135 markets in 33 countries and accessed by clients from more than 220 countries and territories.

Interactive Brokers background

Interactive Brokers Group was founded in 1993 in the United States and opened its Australian offices in 1997. Over the years, the company has streamlined its brokerage services to offer broad market access combined with low-cost trading and superior trade execution.

Today, Interactive Brokers has offices in Australia, Canada, China, Estonia, Hong Kong, Hungary, India, Ireland, Japan, Luxembourg, Russia, Singapore, Switzerland, the UK and the US.

The company is licensed and regulated by the Australian Securities and Investments Commission (ASIC). It is a participant in ASX, ASX 24 as well as Chi-X Australia.

What is Interactive Brokers?

Interactive Brokers is a versatile investment trading platform that offers a range of tools and customisable services to investors across a wide range of asset classes.

Traders can access multiple trading platforms: client web portal, Trader Workstation (TWS), IBKR mobile app, and IBKR APIs for institutional clients. Those using the TWS application can benefit from investing, markets, and programming courses.

Key features

Interactive Brokers is highly regarded as one of the most functional and versatile trading platforms around. Among its long list of features, I've picked out what I think are the most notable.

  • Global access to a very wide range of investments including stocks, bonds, forex, cryptocurrencies, ETFs, funds and a variety of derivatives. What's available compares very favourably with many of the newer apps that have come to market, often with a US or AU focus.
  • Fund accounts and trade in multiple currencies.
  • Very low brokerage fees and low margin interest rates (one of the things they're best known for).
  • Versatile suite of research and trading tools, which is battle-tested and very reliable.
  • Earn interest on idle cash. You can also lend out your shares to earn passive income.
  • Live updates and company notifications.
  • Available in desktop, web and mobile versions.
  • Broad range of order types from the standard market buy / sell to highly customisable trigger orders.
  • Sustainable tools for ESG investing.

Who is Interactive Brokers aimed at?

  • Both active and casual traders can benefit from their advanced trading platform and the large selection of tradable securities that come with low pricing.
  • Interactive Brokers continue to get positive reviews as one of the best brokers for professional traders and sophisticated, active investors who are seeking advanced and powerful tools combined with a wide range of assets and global access.
  • The sophisticated layout and features are best suited for seasoned, active or professional traders and institutional traders. They may be intimidating to newbie traders and occasional investors due to the array of tools and range of asset classes.

Fees and charges

Interactive Brokers has a low-cost trading platform, but with a complicated fee structure. Your fees include but may not be limited to:

  • Broker or commission fees;
  • Australian brokerage fees;
  • Inactivity fee;
  • International share trading fees.

What markets does Interactive Brokers cover?

Interactive Brokers offers access to trade in global markets, including those in North America, Europe and the Asia Pacific.

ASX, AMEX, NYSE, NASDAQ, and LSE are just some of the markets accessible through the Interactive Brokers platform. Here’s a complete list of markets you can access.

Tradable assets

Here’s a list of products you can trade, but there are more:

  • Stocks
  • The over-the-counter bulletin board (OTCBB) stocks, otherwise known as penny stocks
  • Mutual funds
  • A variety of bonds - corporate bonds, international bonds, treasury bonds, CDs and municipal bonds.
  • Single-leg and multi-leg options with up to eight legs
  • Futures and futures options
  • International securities from 135 exchanges in 33 countries including stocks, bonds, options, futures, forex, funds and CFDs
  • Forex (23 currencies and 115 trading pairs)
  • Fractional share trading
    • US stocks listed on NYSE, AMEX, NASDAQ, ARCA or BATS
    • OTC US Pink sheet penny stocks subject to minimum daily volumes and market capitalisation.
  • IPOs, warrants and single stock futures
  • Cryptocurrencies including Bitcoin, Ethereum, Litecoin and Bitcoin Cash
  • Cryptocurrency futures, indices, and ETFs

Types of accounts

There are five account profiles to choose from. Eligibility depends on whether you are an amateur trader or a professional, and on your deposit amounts and liquid net worth.

The account profiles include:

  • Investment account is the plain vanilla version for individuals and company investors.
    • $2000 minimum deposit
    • $20,000 minimum liquid net worth
    • Limited options for leveraged products including access to low-leverage derivatives and unleveraged spot forex.
    • No margin trading.
  • Trading account is similar to the investment account but has fewer restrictions.
    • $10,000 minimum deposit
    • $20,000 minimum liquid net worth
    • An income exceeding $50,000 or a total liquid net worth of $100,000
    • No margin trading, but can trade in spot forex unleveraged
  • Leveraged trading account is only for company or wholesale investors.
    • $10,000 minimum deposit
    • $100,000 minimum liquid net worth
    • Allows margin trading
  • Professional trading account
    • $100,000 minimum deposit
    • Over $1 million liquid net worth
    • Comes with margin trading, leveraged spot forex trading and some options-trading strategies.
  • Self-managed superannuation fund account is only for self-managed super fund trustees. It comes without access to margin selling, but allows limited options trading and unleveraged forex trading.

Account set up

Although it is relatively easy to open an account, you will have to jump a few hoops to prove you are worthy.

  • First, you will be asked to confirm your experience and show you have made more than 100 trades.
  • If you cannot confirm that, you will be asked to simulate trades with the demo version and show liquid net assets worth $20,000 at least.
  • You will be asked for:
    • Your name
    • Date of birth (you have to be over 18 years of age)
    • Contact details
    • Residential address
    • Details of assets and income
    • Name and address of employer
    • Proof of identification: your passport, driver’s licence or an ID card number
    • Bank info for funding arrangements
    • Your investment objectives
    • Details of your experience
  • You can fund your Interactive Brokers account in multiple currencies.

Pros and cons

  • Access to a wide range of asset classes. Trade shares and funds to bonds and crypto.
  • Trade in multiple currencies (including AUD).
  • All your investment products in one account, with mobile apps available.
  • Low brokerage fees, fractional shares, and low margin interest rates if you have experience to trade on margin.
  • Versatile suite of research and trading tools with portfolio tracking and market data access 24 hours a day and six days a week.
  • Earn passive income from interest on idle cash and by renting out your shares.
  • Superior order execution (much more flexibility than most investment apps).
  • No minimum deposit required to open an account and 90 days to fund it.
  • Robo advisors for automating investments.
  • A $2,000 minimum deposit and $20,000 in liquid assets to qualify. Interactive Brokers is not intended for new investors.
  • There's a steep learning curve to get the most out of its tools, products, resources and services.
  • Interactive Brokers Smart Routing unavailable to IBKR Lite clients.
  • No backtesting of custom trading algorithms.
  • No automated trading,
  • Some features are not available to Australian users (or non-US traders).
  • Real-time ASX data comes at a cost, but that's true of other brokers too.

Alternatives

Here are the top international online broker alternatives to Interactive Brokers for Australians.

  • eToro. Free trading on stocks and ETFs combining it with easy account opening and a social trading experience.
  • Vanguard. Offers trading in stocks, bonds, ETFs, mutual funds, CDs, Vanguard ESG funds and cash options.
  • Saxo Bank. An excellent trading platform with outstanding research and a broad product portfolio.
  • TradeStation. Low fees on stocks and ETFs and high-quality educational tools.

Comparisons

See how Interactive Brokers compares to other trading platforms in Australia.

FAQs

What is the minimum deposit for Interactive Brokers?

A minimum deposit of $2,000 and a liquid net worth of $20,000 is needed to qualify for the Interactive Brokers basic account. More advanced accounts have higher thresholds.

Does Interactive Brokers have an app?

The mobile version, IBKR mobile app, supports Android and iOS devices. The mobile app possesses almost all the features and functionality of the web platform. However, the firm's flagship Trader Workstation (TWS) platform beats them both in robustness.

What order types are available on the Interactive Brokers platform?

Most retail trading platforms give investors the choice of one or two types such as limit orders or market orders. Interactive Brokers gives a wider selection which professional traders would find useful.

In addition to limit and market orders, you may also opt for these orders:

  • Stop
  • Stop limit
  • Limit on close
  • Market on close
  • Trailing stop
  • Trailing stop limit

Watch this instructive video from Interactive Brokers to learn more about these order types.

Is Interactive Brokers safe?

Interactive Brokers Group has authorisation from and is regulated by the Australian Securities and Investment Commission (ASIC).

Can I try the Interactive Brokers platform before opening an account?

Interactive Brokers gives you access through a free demo account to experience the platform and its features.

Is Interactive Brokers CHESS sponsored?

Interactive Brokers is not CHESS sponsored. They use the same custodian model as many traditional brokers, where they hold the shares on your behalf.

Disclaimer: The views expressed in this article are those of the writer’s alone and do not constitute financial advice. Advertisers cannot influence editorial content. However, Finty and/or the writer may have a financial interest in the companies mentioned. Finty is committed to providing factual, honest, and accurate information that is compliant with governing laws and regulations. Do your own due diligence and seek professional advice before deciding to invest in one of the products mentioned. For more information, see Finty’s editorial guidelines and terms and conditions.