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Interactive Brokers Canada Review

This Interactive Brokers Canada review is for those who wish to know how to start trading in Canada and are looking for the best online trading platform in the country.

If you want to invest as an expat or high-net-worth individual, which is what i specialize in, you can email me (advice@adamfayed.com) or use WhatsApp (+44-7393-450-837).

What is a brokerage account Canada?

When it comes to buying and selling stocks, bonds, mutual funds, exchange-traded funds (ETFs), options, and other securities in Canada, a brokerage account is a go-to financial hub. Brokerage businesses act as mediators between investors and the broader financial markets and facilitate these accounts.

With direct, worldwide access to a vast selection of securities, Interactive Brokers Canada distinguishes out as a top-tier platform for trading. The platform is a participant in the Canadian Investor Protection Fund and is governed by the Canadian Investment Regulatory Organization (CIRO).

Since its beginning in 2000, Interactive Brokers Canada has provided Canadians with access to a wealth of resources for learning about and trading in international markets.

Low trading costs, a broad array of tradable security types, powerful research tools, and competitive margin rates between 0.75 and 1.59 percent make Interactive Brokers Canada a popular choice among Canadian investors.

The platform is particularly known for its attention to safety and security, with no documented consumer losses to date. Clients gain from a consolidated platform that facilitates worldwide investing in various asset classes, accepts deposits in numerous currencies, and provides round-the-clock, seven-days-a-week access to market data.

Interactive Brokers Canada: Investment and Account Setup

Interactive Brokers Canada investment account
Photo by Andre Furtado

Interactive Brokers Canada Account Types

Investment and trading needs vary, so Interactive Brokers Canada offers several account tiers. The available options are:

  1. Individual Accounts: Tailored for individual investors or traders who prefer to independently oversee their money.
  2. Joint and Trust Accounts: Interactive Brokers Canada also offers joint accounts, which can be owned and used jointly by two people, and trust accounts, which can only be used for the benefit of a certain person or persons. Additionally, trust accounts are offered for trustees responsible for managing assets on behalf of beneficiaries.
  3. Retirement Accounts: Accounts devoted solely to retirement planning, like Registered Retirement Savings Plans and Tax-Free Savings Accounts, allow you to put away money tax-free and grow it over time.
  4. Advisor Accounts: Designed for Professional Registered Investment Advisors and Commodity Trading Advisors (CTAs), these accounts provide the management of client accounts and the allocation of trades across many clients via a consolidated order management interface.
  5. Institution Accounts: Businesses and other organizations can get their own separate bank accounts called institution accounts by filing the appropriate paperwork.

What types of securities can be traded on interactive brokers Canada?

Interactive Brokers Canada trades stocks, options, futures, currencies, bonds, and ETFs.

  • Equities: Clients can trade equities on the TSX, NYSE, NASDAQ, AMEX, ARCA, LSE, and TSE.JPN.
  • Option trading: The platform allows call and put options on stocks and indexes.
  • Futures: Interactive Brokers Canada offers futures contracts on equities, indexes, and commodities.
  • Currency trading: Clients can trade USD, EUR, GBP, and CAD spot currencies.
  • Bonds: The Canadian broker lets clients trade government, corporate, and other fixed-income assets.
  • Mutual funds: The Interactive Brokers Canada offers over 7,000 mutual funds from varied fund families including BlackRock and Vanguard without transaction fees.
  • ETFs: Clients can trade many ETFs across asset classes and sectors.
  • Structured Stock Futures (SSFs) and Exchange for Physicals (EFPs): The platform lets clients trade SSFs and EFPs, giving them access to a variety of financial products.
  • Warrants: Interactive Brokers Canada also lets clients trade warrants, which provide investors the right but not the obligation to buy or sell an underlying asset at a predetermined price before a defined date.


Who can invest in Interactive Brokers Canada: Eligibility and Requirements

As a company regulated by CIRO and a member of the Canadian Investor Protection Fund, Interactive Brokers Canada welcomes investments from individuals located outside of Canada. The site can only accept new accounts in states where it is legally allowed to do so. Prospective customers must therefore verify that they meet the legal requirements in their own jurisdiction before establishing an account with the firm.

In most cases, Canadian applicants at Interactive Brokers Canada will undergo a computerized name and address verification process. Additional documentation or an attestation may be required to confirm that a commissioner of oaths or a guarantor has observed an original identification document for the particular applicant in the event that computerized identity verification is not feasible.

The following information and paperwork are required to open an account with Interactive Brokers Canada:

Proof of Age and Date of Birth

Applicants who are citizens or permanent residents of Canada are normally subjected to a computerized verification of their name and address by Interactive Brokers Canada. If electronic verification fails, you’ll need to provide an attestation from a commissioner of oaths or a guarantor stating that the original identification document has been reviewed.

Attestation, in its original electronic format, must include the following:

  • Your government-issued identification (driver’s license, passport, etc.)
  • Social Insurance Number, Social Security Number, or Taxpayer Identification Number
Who can invest in Interactive Brokers Canada
Image by rawpixel.com on Freepik

Home Address Verification

A utility bill or bank statement showing your current address may be required by Interactive Brokers Canada to verify your claim of residence.

  • Specifics of the Job: You will need to give out your employer’s contact info if you have a job.
  • Specifics on Your Bank Account: You’ll need to provide banking details so that the Canadian trading platform may transfer funds to you.

Customers who wish to open an account with Interactive Brokers Canada are encouraged to submit the necessary paperwork electronically by scanning and emailing it or by sending it by courier/overnight service.

Is there a minimum deposit required to open an account with interactive brokers Canada?

As per information available on the Interactive Brokers Canada website, a front-end deposit of USD 10,000 (or its non-USD equivalent) is mandatory for broker accounts. This deposit is utilized to offset commissions during the initial 8 months.

Conversely, there is no specific minimum requirement for other account types, including individual, joint, trust, and organizational accounts.Top of Form

How does Interactive Brokers Canada fees compare to other brokers in Canada?

Interactive Brokers Canada is recognized for providing cost-effective trading fees in comparison to other brokers within the Canadian market.

For instance, the commission rates set by the firm are notably competitive, with charges of 0.005 USD per share for US stocks and 0.01 CAD per share for Canadian stocks. When compared to the flat fees charged by many other Canadian trading platforms, these costs stand out as particularly cheap.

Furthermore, Interactive Brokers Canada stands out by offering a diverse array of investment prospects. This includes not only competitive commissions and account fees but also an extensive range of tradable security types. The platform also provides users with a robust suite of research tools and boasts low margin rates, ranging from 0.75% to 1.59%.

Interactive Brokers Canada fees
Photo by T. Royce Xan

How to open a trading account in Canada

You can open an account with Interactive Brokers Canada by following these basic procedures:

  1. Complete the Individual Electronic Application: Begin by clicking the “Open an Account” button on the Interactive Brokers Canada website. Create a username and password for security considerations. Start filling out the online application by adding your own information, work history, and banking information.
  2. Submit Valid Identification and Current Address: Scan and upload an official identity document (driver’s license, passport, or government-issued photo ID) to confirm your identity. Include a utility bill or other bank statement to verify your current residence as well.
  3. Make a Deposit: Deposit money into your account once your application has been accepted. Choose between sending a wire transfer or setting up an electronic funds transfer (EFT) as per the provided deposit instructions. Note that failure to receive funds within 45 days from approval will result in account closure.
  4. Application Review: You can start trading as soon as your funds clear. Deposits made by 16:00 Eastern Time (ET) will be accessible for trading the following business day.

Even though registering an account with Interactive Brokers Canada is meant to be a completely digital experience, you should be aware that the features and verification procedure may add time to the application.


What are the pros and cons of using Interactive Brokers Canada?

When looking for the best broker for trading, it is only natural to weigh the pros and cons of a platform you’re considering.

Pros

If you have a large account balance and make a lot of trades, you can save a lot of money with Interactive Brokers Canada because of the low commissions and account fees they offer. The platform’s pricing is flexible, with both flat rates and tiers available to meet the needs of different customer bases.

When compared to other trading platforms Canada, Interactive Brokers Canada stands out for its improved access to international investing. Users who want diversified and extensive portfolios will find this global perspective beneficial because it increases the number of investment options open to them.

The broad range of securities available for trading on the platform is another major selling point. This variety provides investors with numerous options, letting them construct portfolios that best suit their individual needs and risk tolerances.

Interactive Brokers Canada provides a wide set of research tools for people that place a premium on investigation. Active investors and margin traders will find this function very useful, as it provides access to the analytical tools they need to make educated trading decisions.

Security is a top priority at Interactive Brokers Canada as well. The platform has an impeccable track record, with zero documented cases of investor losses, and is backed by regulatory bodies.

Cons

Navigating Interactive Brokers Canada could prove tricky for newbie traders due to its inherent intricacy, and the information offered may pose issues for those new to the trading sector. A less streamlined experience for new customers may also come from the lengthy and difficult account opening process.

Customers may have slower response times and less help options due to high call volumes, according to reports. These factors are worth thinking about if you’re designing an onboarding process for new users who could appreciate a more streamlined and intuitive experience.

Pained by financial indecision? Want to invest with Adam?

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Adam is an internationally recognised author on financial matters, with over 735.2 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.

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