If you've read our stock broker comparison guide, you'll know that Interactive Brokers is our favorite broker for international trades for Singaporeans.
What makes Interactive Brokers so attractive to Singaporeans? What are its strengths and weaknesses? If you're trying to decide if Interactive Brokers is the best brokerage for you, do read this review!
Ease of account setup
Since Interactive Brokers is an electronic trading platform, all its facilities, from trading to setting up an account are all done online.
As such, as long as you have a stable internet connection, you can trade and set up an account all from the comfort of your own home.
The process of applying for an account is really quick. All you have to do is go through a series of online forms and fill in your personal information.
At the end, the only slightly more troublesome part is having to scan a proof of your identity and address, and uploading it for verification. Though this step may require more effort, all you need is your phone to take a photograph of the documents for upload.
If you had filled in all your information correctly, the average processing time is just 3-4 working days. This means that you can start investing within a week.
Should you want to enter the market as soon as possible for whichever reasons, Interactive Brokers could be a good broker for you as it doesn't take all that long to get an account ready for trading.
If you're interested in the whole application process, we have a comprehensive guide on how to open and fund your Interactive Brokers account.
Account Setup: 4.5/5
Reason: Simple and convenient setup that can be done from home, along with a wonderfully short processing time. The only minor inconvenience which can be overlooked is the need to scan and upload documents.
We have established that Interactive Brokers fares well when it comes to account setup, but the user experience while using it is more important. Let's begin with the trading process.
There are two ways in which you can trade using Interactive Brokers - through their web portal or using their mobile app IBKR. They also have an API for you to make trades through programs if required, but we won't be covering that in this review.
Let's first talk about the overall interface and appearance of the platform on the web. Interactive Brokers have recently revamped their user interface.
After you log in and authenticate using your phone, you are brought to a fairly clean page with 5 simple panels and an obvious "Search" button. By searching, you can quickly find individual stocks and see their financials.
The "Portfolio" panel gives you a quick insight into your portfolio allocation and performance. This is incredibly helpful especially for those of you who try to maintain a certain ratio between all your assets.
On it's right is the "Watchlist" panel, which as its name suggests, allows you to add a list of stocks that you are interested in, so you can monitor them conveniently, buying and selling when the prices are right. This panel also consists of a stocks and bonds scanner which aids you in weeding out the strong and weak buys.
This is then followed by the "Markets" panel which provides you with an overview of the market by country, daily top financial news, as well as general performance by sector. It also provides sentiment analysis for the top news.
Next up is the "Reports" panel which allow you to check your financial and account statements, whether daily or monthly.
Lastly, we have the "Orders & Trades" panel, which tells you which orders you have placed and which trades have been successful. This is useful for planning and checking your orders.
In the older version of the interface, it was not possible to find your orders easily and as there were a whole bunch of menus and the interface was extremely cluttered.
However, Interactive Brokers' recent user interface revamp makes it much easier to navigate, providing an improved user experience.
Placing an order
The directions for where to place your trades are pretty clear too. There is a blue, rectangular "Trade" button which you can't miss. Clicking on that button allows you to place orders instantly.
Another way to do so is through the "Watchlist" panel. If you're scrolling through your "Favorites" and happen to spot a good buy price, you can immediately click on the "Trade" button beside it.
This will input the stock symbol automatically, eliminating the problem of inputting the wrong symbols and buying the wrong stocks.
The preview function is useful for you to do a confirmation on your order before submitting, and you can select the type of financial instrument after entering a symbol (stock, option etc) easily.
Funding Your Account
Since Interactive Brokers operates worldwide, the funding process is a little complex.
The first time you fund your account, you have to "Create a Bank Wire Deposit". For more information on how you can do that, click here.
This step merely tells Interactive Brokers that you want to transfer in funds as a notification. You haven't actually transferred in anything yet. It also sets up and saves the bank account you use to transfer funds in so you can simply select it after the first time.
In order to actually transfer the funds, you will need to transfer funds from your savings account to your Interactive Brokers account manually, based on the bank account number given to you when you made your account.
You have to click on the 3 lines at the top left corner to bring the menu bar out, and then click "Transfer & Pay", followed by "Transfer Funds". You'll see "Make a Deposit" and "Make a Withdrawal" and should select the former.
From there, whenever you want to transfer funds in and out of your account, you have to repeat this two step process.
First, create the notification to tell Interactive Brokers that you want to transfer funds in/out and how much. Next, actually transfer the funds to your provided Interactive Brokers account.
Although this two step process is a bit of a hassle, the money is transferred into your Interactive Brokers account fairly quickly once you have completed both steps.
On average, the funds will appear in your account within approximately 1-2 days, which means that if you're in a rush to buy a certain stock due to strong market conditions, you can do so fairly quickly.
Besides placing orders online, you can also do so using mobile app IBKR. Let's first talk about the logging in process. Like the online version, you have to log in using your User ID and Password.
However, after you have logged in once, you can choose to use your fingerprint to access in the future and no longer have to log in manually again. While it is a convenient feature, it is not a unique feature among similar brokerage apps.
Mobile IBKR has a menu bar that differs noticeably from the web portal's menu bar. However, mobile IBKR maintains similar feature parity with the web portal.
Sure, certain features may be classified differently and have different names, but they pretty much have the same features. For example, "Watchlist" in the web portal is called "Monitor" in the mobile app.
While many brokers provide the option of mobile trading, most of their interfaces are fairly primitive and underdeveloped. Furthermore, some may even charge you more when you trade using their mobile app. One such example is DBS Vickers' mTrading app.
In contrast, Interactive Broker's IBKR app is well-developed, advanced, and does not have additional charges. This is especially important if you're inclined to trading on the go.
When it comes to Interactive Broker's customer service, the experiences are quite polarized. Their customer service is available through phone, email and online chat.
They also added an iBot feature, which automatically respond to common queries and concerns.
Interactive Broker's customer service is often reviewed to be lacklustre. Indeed, when I was opening an account with them, there was an error but I wasn't notified about it.
After nearly a month, I had to email in to ask them about it before they helped me resolve it, which took nearly another week or so.
That said, some other people had the customer service email them of their own accord to rectify errors in application, so your mileage may very.
User Experience: 4/5
Reason: Nice, clean user interface and simple when it comes to placing trades and finding resources, both online and for mobile. Funding your account takes a two-step process, which is a little annoying but the funding process is relatively fast otherwise. Lacklustre customer service, but it could improve.
Interactive Brokers covers 29 countries and over 140 markets, which is a very large number that is significantly greater than what most other brokerages offer.
Having said that, Interactive Brokers covers mostly North American and European markets, with a slightly more limited range of Asia/ Pacific markets. Only 6 out of 29 countries and 16 out of the more than 140 markets are Asia/ Pacific.
These 6 Asia/Pacific countries are: Australia, Hong Kong, India, Japan, Singapore, and South Korea. What is notable is that the countries listed above are mostly well-developed, with a fairly stable economy.
For those who are more interested in emerging markets which have potential for growth, the coverage that Interactive Brokers offer may be a drawback when it comes to choosing brokerages.
Instead, other brokerages such as POEMS provide access to emerging markets (e.g. Vietnam and Philippines), which may be a more attractive option.
Despite that, for the average investor, Interactive Broker's market coverage is simply impeccable.
Market Coverage: 4.5/5
Reason: A very impressive number of markets from numerous developed countries, far surpassing that of most other brokerages. Might be a little underrepresented in terms of emerging markets, but just slightly.
Other than a very vast market coverage, Interactive Brokers also has a very wide range of product offerings.
- Futures Options (FOPs)
- Exchange-Traded Funds (ETFs)
- Structured Products
- Single Stock Futures (SSFs)
- Fixed Income
- Mutual Funds
In short, Interactive Brokers basically offers you almost every single type of investment product you could possibly want in your portfolio. Nothing much to criticize here.
Product Offerings: 5/5
Reason: There are very few products that Interactive Brokers do not offer.
Fees and Commissions
In this section, we'll focus on comparing the fees for stocks and ETFs since Interactive Brokers offers too many items and we can't possibly compare them all. Note that these fees are specific to Singaporean investors.
For US and India residents, Interactive Brokers has an Interactive Brokers Lite offering, which has no commissions on US stocks and no annual fees. Other countries do not offer this deal for individual traders.
Stocks and ETFs (US)
For non-US residents, we have to pay for both US and non-US listed stocks and ETFs. When trading with IB, there are two different types of pricing:
- Volume-tiered pricing
- Fixed rate pricing
As its name suggests, volume-tiered pricing means that as the volume of shares that you trade in increases, commissions per share decreases.
|Share volume/month||Commission/share||Min per order||Max per order|
|<=300,000||USD 0.0035||USD 0.35||1% trade value|
|300,001-3,000,000||USD 0.002||USD 0.35||1% trade value|
|3,000,001-20,000,000||USD 0.0015||USD 0.35||1% trade value|
|20,000,001-100,000,000||USD 0.001||USD 0.35||1% trade value|
|>100,000,000||USD 0.0005||USD 0.35||1% trade value|
Fixed Rate Pricing
For fixed rate pricing, the commission fee is standardized at USD 0.005 per share, with a minimum of USD 1.00 per order and maximum of 1.0% of trade volume.
Note that this fee includes all other exchange fees (except transaction fees) and such, unlike volume tiered pricing, which doesn't.
|Commission/share||Min per order||Max per order|
|USD 0.005||USD 1.00||1% trade value|
In general, if you're an investor trading large volumes, you will want to use the tiered pricing for larger discounts on your trades, while small time investors will want to use fixed pricing for less fees.
Interactive Broker's commissions are very low, making them attractive for investors who trade frequently.
Stocks and ETFs (UK)
Besides looking at US stock exchanges, the London Stock Exchange is also very important for us Singaporeans since we are subjected to 30% withholding tax on dividends distributed by US-domiciled stocks and ETFs.
We can reduce that tax from 30% to 15% by buying Ireland-domiciled stocks and ETFs from the London Stock Exchange instead.
Transparent Volume-Tiered Pricing
The volume-tiered pricing for UK stocks and ETFs work slightly differently from US stocks. Commissions for UK stocks are a percentage of trade value instead of by amount of shares.
|Trade value (GBP/month)||Fee/trade value||Min per order||Max per order|
|<=40,000,000||0.050%||GBP 1.00||No max|
|40,000,001-80,000,000||0.030%||GBP 1.00||No max|
|80,000,001-400,000,000||0.020%||GBP 1.00||No max|
|>400,000,000||0.015%||GBP 1.00||No max|
There is a minimum commission of GBP 1.00 per order but no maximum commission.
Fixed Rate Pricing
|Trade value (GBP/month)||Fixed||Min per order||Max per order|
|<=50 000||GBP 6.00||GBP 6.00||GBP 6.00|
|>50 000||GBP 6.00 + 0.05% of incremental trade value||GBP 6.00||GBP 29.00|
|USD denominated stocks||USD 0.05% of trade value||USD 5.00||No max|
While Interactive Brokers may not be the best of the best when it comes to commission fees for stocks on the US exchanges, it is definitely among the best for stocks on the London Exchange.
Most other exchanges for Singaporeans to trade on the London exchange charge between GBP 10.00 and GBP 25.00 in minimum commission fees, which is way above GBP 6.00 that Interactive Brokers offers.
Most brokerages also charge more than 0.1% in commission fees, which is way above Interactive Brokers' 0.05%. While this may not seem like a huge difference, the numbers add up quickly, especially when your trade value goes up.
IBKR Pro's annual fee
IBKR Pro accounts are subject to inactivity fees of $10/month minimum for accounts with $100,000 or less, and a $20/month minimum for accounts with $2,000 or less.
However, if you are below 25, you are subjected to a minimum monthly fee of only $3. Note that all these inactivity fees will deduct any commission incurred that month.
If you have $10 commissions incurred that month through trades, then you effectively won't have to pay any inactivity fees for that month.
Most of us have to use IBKR Pro since IBKR Lite is not available for individuals in countries outside US and India yet.
The annual fee can be expensive for small time investors looking to invest for the first time. Once you hit $100,000 however, the annual fees are waived.
All in all, Interactive Broker's fees are acceptable considering their low commissions even with this annual fee if you can reach $100,000 within 10 years, and/or trade frequently.
Fees & Commissions: 4/5
Reason: Interactive Brokers provides one of the lowest commission fees among all its competitors, but would be better without the $10/month inactivity fee.
In summary, the main benefits of creating an Interactive Brokers account is for their low commissions and wide offering of markets and investment products.
Their web portal and mobile platforms are all clean and easy to use, and the only drawback is their customer service and annual fees.
Still, the overall fees for Interactive Brokers are acceptable and among the best if you wish to trade international shares and ETFs in various markets.
If you're just looking for a broker to trade US shares, consider Tastyworks instead, which has no commissions and annual fees. Otherwise, if you need more than just US markets and are looking for low fees, Interactive Brokers is one of your best choices.
Overall rating: 4.5/5
Explanation: Really good broker with good value on most markets and products for Singaporeans, especially for international trades.
While the annual fee may seem expensive at first glance, after some calculations, it's actually acceptable for most individual investors, even small time ones.
If you have decided to go with Interactive Brokers, we have a helpful guide that teaches you how to open and fund your Interactive Brokers account. Check it out!
To help us out with no extra cost to you, do open an account using our referral, and leave your comments down below if you have any further questions!
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