The Smart Investor · Updated 2026
I invested through a big traditional bank from my teenage years on. Then I read a pile of books, did the maths and three years ago I moved everything to Interactive Brokers. This page is what I wish somebody had put in front of me back then: what an account really costs wherever you live, how safe the money is, what independent reviewers say, and what the honest pros and cons of IBKR are.
Referral link: ibkr.com/referral/marco1592. The bonus is paid by Interactive Brokers. Using it costs you nothing extra.
Why this page exists
I opened my first brokerage account as a teenager at one of the big retail banks. It felt safe and grown-up: a familiar name, a friendly adviser, a statement in the letterbox every quarter. For years I never questioned any of it.
Then I started reading. "Rich Dad Poor Dad" got me thinking about money in the first place, and the index investing literature, from Bogle to Kommer, taught me what to actually look at: total cost, diversification, and how much of the return the provider keeps.
What I found on my own statements: a custody fee every quarter, a fat margin on every currency exchange, a commission on every trade, and in-house funds that did worse than the index they were tracking. I was paying extra for below average results.
Three years ago I stopped. I moved the portfolio to Interactive Brokers and my yearly cost of investing dropped to a fraction of what it was, with the same investments inside. Everything below is the homework I did before that move, so you can redo it yourself wherever you happen to live.
What independent reviewers say
I am one investor with one opinion. These are established, independent sources that test brokers systematically every year. Each link goes to the source so you can read the current edition yourself.
Investopedia
Investopedia's yearly broker awards have named Interactive Brokers best in class for costs and for international trading, which are the two points that matter most when you invest across borders.
Read the sourceBrokerChooser
BrokerChooser tests brokers with real accounts every year and ranks Interactive Brokers at the top for low fees, market access and product range for clients outside the US.
Read the sourceExample portfolio: USD 50,000 to start, USD 500 a month, 5% a year, over 30 years. Interactive Brokers costs USD 614 in total fees. This is what a range of well known international brokers and platforms charge for exactly the same thing. At the top end, more than 70 times as much.
| Broker | Fees over 30 years | You pay extra vs IBKR | IBKR is |
|---|---|---|---|
| Interactive Brokers | USD 614 | nothing | the benchmark |
| Trading 212 | USD 1,450 | USD 836 | 2x cheaper |
| Charles Schwab International | USD 2,100 | USD 1,486 | 3x cheaper |
| Saxo Bank | USD 3,200 | USD 2,586 | 5x cheaper |
| DEGIRO | USD 3,400 | USD 2,786 | 6x cheaper |
| XTB | USD 3,900 | USD 3,286 | 6x cheaper |
| Vanguard Investor | USD 6,400 | USD 5,786 | 10x cheaper |
| Revolut Invest | USD 9,800 | USD 9,186 | 16x cheaper |
| eToro | USD 12,500 | USD 11,886 | 20x cheaper |
| Hargreaves Lansdown | USD 22,000 | USD 21,386 | 36x cheaper |
| Barclays Smart Investor | USD 26,500 | USD 25,886 | 43x cheaper |
| HSBC InvestDirect | USD 31,000 | USD 30,386 | 50x cheaper |
| Traditional private bank | USD 45,000 | USD 44,386 | 73x cheaper |
Rankings are re-published each year and can change. I have no relationship with any of these publications; check the linked page for the latest edition and the exact wording of each award. Fee figures are modelled from published tariffs for the portfolio described above, converted to US dollars and rounded. Pricing differs by country of residence.
Refer a Friend
Interactive Brokers runs an official Refer a Friend programme in most of the countries it serves. When you open your account through an invitation link, IBKR credits you IBKR stock based on what you deposit and keep in the account. Not a gimmick voucher, but real shares of the listed broker.
IBKR owns and can change these terms at any time. The exact, binding conditions are displayed on the invitation page before you sign up, so read them there.
Is Interactive Brokers safe?
01
Interactive Brokers Group operates through regulated entities: IB LLC in the US (SEC, FINRA, CFTC), IBKR Ireland (Central Bank of Ireland), IBKR UK (FCA), IB Hong Kong, IB Australia and others. You are assigned to one of them during onboarding based on where you live. The account documents tell you which one, and that determines your protection scheme.
02
Client securities are held in segregated custody accounts, separate from the broker's own balance sheet. In an insolvency, segregated client assets are not part of the estate available to the broker's creditors. This is the same principle custody law uses in most developed markets.
03
Accounts at IB LLC are covered by SIPC up to USD 500,000 (max USD 250,000 cash), plus supplemental insurance. Accounts at IBKR Ireland fall under the Irish investor compensation scheme (90% of the claim, capped at EUR 20,000) and IBKR UK clients under the FSCS (up to GBP 85,000). These schemes cover broker failure, never market losses.
04
IBKR Group is listed on NASDAQ, publishes quarterly audited accounts, carries no long-term debt and holds equity far above regulatory minimums. Automated real-time margin liquidation keeps client-default risk low, which is unglamorous but genuinely matters.
05
You are a client of a foreign broker. There is no local deposit protection on your securities, no pre-filled local tax statement, and all correspondence is in English. That is the honest trade-off for the lower costs.
06
Uninvested cash at a broker is a claim on that broker, not a bank deposit. Many investors keep only working cash at IBKR and stay invested in ETFs, which are held in custody rather than on the broker's balance sheet.
Costs
For a buy-and-hold ETF investor, three items dominate the lifetime cost: the percentage platform fee, the currency conversion spread and the per-order commission. IBKR is structurally cheap on all three. Figures below are indicative, so always verify on ibkr.com and at your own provider.
| Cost item | Interactive Brokers | Typical bank or app broker |
|---|---|---|
| Custody / platform fee | None | Often 0.1–0.5% p.a. at banks and platforms |
| Account or plan subscription | None | USD 3–15 a month at several app brokers |
| ETF trade, US exchange | From USD 0.35 (tiered) | USD 5–30 typical |
| ETF trade, European exchange | From EUR 1.25 | EUR 5–20 typical |
| Currency conversion | ~USD 2 per conversion, near interbank rate | 0.5–1.5% spread is common |
| Interest on idle cash | Near benchmark rate above a threshold | Usually 0% |
| Inactivity / withdrawal fees | None on a standard account | USD 5–10 a month or per withdrawal |
you invest regularly in globally diversified funds, hold a six-figure portfolio or plan to, convert between currencies, want access to US, European and Asian listings from one account, and you are comfortable filing your own tax return from an activity statement.
you invest a couple of hundred a month, want support in your own language and a pre-filled tax statement, or you value a domestic counterparty more than roughly 0.2–0.5% a year in costs. Trading 212, DEGIRO, XTB and your national bank broker are the usual alternatives.
A worked example
Same fund, same amount of money, same year. One investor holds USD 100,000, buys USD 1,000 of a world ETF every month and converts USD 12,000 into euros once. The only difference is where the account sits.
| Over one year | Interactive Brokers | Typical bank platform |
|---|---|---|
| Platform fee on USD 100,000 | USD 0 | ≈ USD 350 (0.35% a year) |
| 12 ETF purchases of USD 1,000 | ≈ USD 12 (from USD 0.35 a trade) | ≈ USD 300 (USD 25 a trade) |
| Account subscription | USD 0 | ≈ USD 60 (USD 5 a month) |
| Converting USD 12,000 into EUR | ≈ USD 2 at the market rate | ≈ USD 120 (about 1% spread) |
| Total for the year | ≈ USD 14 | ≈ USD 830 |
That is roughly 0.8% of the portfolio handed back to you for doing nothing differently. Leave those savings invested at 6% a year and after twenty years it is close to USD 30,000, on this one portfolio alone. A larger portfolio saves more, because the percentage fee grows with it and the IBKR side barely moves.
Global brokers, same portfolio
Start with USD 50,000, add USD 500 every month, assume 5% a year. Depending on where you keep the account you pay somewhere between USD 614 and USD 45,000 in fees over those 30 years. Same fund, same money, same market return. Only the provider changes.
That is the difference between the cheapest and the most expensive account, about USD 1,480 a year.
Fees you never pay stay invested. On these assumptions the compounding on the savings is worth roughly as much again as the savings themselves.
At the expensive end it is mostly the yearly percentage fee and the FX spread, not the trading. Both are charged whether the market goes up or down.
If you want one fund and nothing else
If convenience matters more to you than optimising the last few basis points, buy the whole world in one line. The Vanguard Total World Stock ETF, ticker VT, holds roughly nine thousand companies across developed and emerging markets, from Apple and Samsung to Nestlé and Toyota. Large, mid and small caps are all in there.
You never have to decide how much America, Europe or Asia to own, and you never have to rebalance between funds. The index does it for you as the world changes. Vanguard charges 0.06% a year, so on USD 100,000 that is about USD 60. At Interactive Brokers a purchase starts at USD 0.35, which means a monthly USD 1,000 buy costs you a rounding error.
Two honest caveats. VT is domiciled in the United States, which is efficient for treaty withholding tax but relevant for US estate tax on large holdings if you are a non-resident. Many investors outside the US cannot buy US-domiciled ETFs at all because of PRIIPs rules, in which case the Irish-domiciled VWCE or VWRL does a similar job at a slightly higher cost. And a world equity fund can fall 30% or more in a bad year, so only invest money you can leave alone.
Waiting for a better entry point is the one thing I would not do. Nobody knows where the market goes next, and the cash sitting on the sidelines earns almost nothing while the world keeps compounding.
If you have a lump sum ready, my recommendation is to invest it in one go. Markets rise more often than they fall, so on average a single purchase beats drip-feeding the same amount over a year, and you pay one commission instead of twelve. Then keep buying every month from your salary, because that is money you did not have yet anyway.
The only good reason to split a lump sum into three or four monthly buys is your own nerves. If a 30% drop right after your transfer would make you sell, spreading it out is cheap insurance. Losing a little expected return to stay invested is a fair trade.
FAQ
Yes. IBKR's programme uses invitation links rather than typed codes. Opening an account through ibkr.com/referral/marco1592 registers you as a referred client and qualifies you for up to USD 1,000 in IBKR stock, subject to IBKR's published terms and the rules of the entity you are assigned to.
New clients receive USD 1 of IBKR stock for every USD 100 deposited and maintained, up to a maximum of USD 1,000. The shares are credited over the qualification period defined by IBKR and are funded by IBKR, not by the referrer's client.
IBKR is a regulated, NASDAQ-listed broker with no long-term debt, segregated client custody and investor protection through SIPC (up to USD 500,000 at IB LLC), the Irish compensation scheme (up to EUR 20,000 at IBKR Ireland) or the FSCS (up to GBP 85,000 at IBKR UK), depending on the entity you are assigned to. No scheme protects against market losses.
IBKR accepts clients from more than 200 countries and territories through its US, Irish, UK, Hungarian, Australian, Hong Kong, Singapore, Japanese, Indian and Canadian entities. Which entity you get, which products you can trade and which protection scheme applies all depend on your country of residence, and that is shown during the application.
It depends where you live. Retail investors in the EU, the UK and a few other jurisdictions cannot normally buy US-domiciled ETFs because those funds do not publish a PRIIPs KID. The usual answer is an Irish-domiciled equivalent such as VWCE or VWRL, which IBKR gives you access to on European exchanges. Professional-classified and non-EU clients often can buy VT directly.
IBKR does not issue pre-filled national tax statements in most countries. You download the annual activity statement from the Client Portal, declare your year-end holdings, dividends and interest according to your local rules, and use the withholding tax report to claim treaty relief or a foreign tax credit. Budget about half an hour a year once you have a routine.
Log in to the Client Portal, go to Performance & Reports, then Statements, and pick Activity. Set the period to Annual, choose the tax year, select your base currency and download it as PDF and CSV. That report lists every position at 31 December, all dividends with the withholding tax deducted, all interest and all fees. IBKR also offers a Dividend Report and a Withholding Tax Report under the same menu, which make foreign tax credit claims much easier. Keep the PDF, because that is the document a tax office will ask for if it wants proof.
The default rate on US dividends for non-residents is 30%. If your country has a tax treaty with the US and you file a W-8BEN, which IBKR walks you through at account opening, it usually drops to 15%. Depending on where you live, you can then credit that 15% against your domestic tax on the same income.
The interface is dense and built for professionals, support is in English, there is no pre-filled local tax statement, and very small monthly investments benefit less from the low commissions. Beginners investing small amounts are often better served by a simple local app broker.
How to sign up
The referral is attached automatically; nothing to type in later.
Address, tax identification number, passport or national ID, employment and experience questions. 15–20 minutes.
Photo of your ID plus a selfie or short video. Approval usually within 1–3 business days.
Third-party transfers are rejected. Transfers arrive on your own IBKR account details in your chosen currency.
Exchange into the currency you need at close to the real market rate, then buy your fund. Keep the yearly activity statement for your tax return and file for treaty relief on withholding tax where you can.
About me
I'm 28 and I have a completely ordinary office job. No finance career, no trading desk, no inheritance. Just a normal salary, a savings rate I take seriously, and a spreadsheet I open far too often.
Most of what I know comes from books rather than from anyone selling me something. "Rich Dad Poor Dad" was the one that made me care about money at all, and the index investing authors are the ones I keep going back to for the boring, useful parts: broad index funds, low costs, and holding on for decades.
The goal is simple. Become financially independent as early as I can and swap the commute for the mountains. Not a yacht, not a Lamborghini. A quiet place at altitude, decent hiking boots, and the freedom to decide how I spend a Tuesday.
That is the only reason fees interest me. Every unit of currency that leaks away in custody charges, currency margins and commissions is money that never compounds. This page is just the homework I did. And yes, if you open an account through my invitation link, we both get a small thank-you from Interactive Brokers.
Further reading
Same fees, same account, same broker, plus up to USD 1,000 in IBKR stock for depositing money you were going to invest anyway.
Referral link: ibkr.com/referral/marco1592. The bonus is paid by Interactive Brokers. Using it costs you nothing extra.