In this Interactive Brokers UK Review, we’ll get to know the brokerage firm, investment minimums and fees, opening an account, and other matters necessary for prospective investors to know.
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Some facts might change from the time of writing, so potential investors shouldn’t decide to invest or not to invest based on this review alone. This content isn’t financial, legal, tax or any other kind of individual advice, nor a solicitation to invest.
Who is Interactive Brokers UK?
Interactive Brokers UK serves as a comprehensive online trading platform catering to the needs of traders, investors, and advisors, offering direct global access to a diverse array of financial instruments, including stocks, options, futures, currencies, bonds, and funds. The platform distinguishes itself by providing access to an extensive selection of research resources, combining over 200 free and premium research, market commentary, and news providers.
Tailored to meet the diverse needs of users, Interactive Brokers UK offers a suite of trading tools, boasting a repertoire of 100+ order types, ranging from standard limit orders to sophisticated algorithmic trading options, facilitating the execution of various trading strategies.
Moreover, the online trading platform UK furnishes users with real-time trade confirmations, margin details, transaction cost analysis, advanced portfolio analysis, and more.
Specifically designed for active traders, Interactive Brokers offers a suite of trading platforms in the UK such as IB TWS, IBKR Mobile, IBKR GlobalTrader, IBKR Client Portal, IBKR API, and IBKR IMPACT.
Opening a UK trading account with Interactive Brokers UK entails a prerequisite of reading the relevant risk disclosure statements available.
As an entity authorized and regulated by the Financial Conduct Authority, Interactive Brokers UK upholds stringent regulatory standards, with Interactive Brokers LLC additionally regulated by the US SEC and CFTC, and holding membership in the SIPC compensation scheme.
Interactive Brokers UK Fees
What are Interactive Brokers UK fees?
Interactive Brokers UK levies multiple costs for trading, spanning commissions, exchange fees, and extra charges.
Stocks, ETFs, ETPs, and warrants all use a tiered commission system, with fees ranging from 0.4% to 0.05% of the trade value per month.
In addition, there is a £1 minimum charge each trade and a 1% maximum charge per trade amount.
Each execution broker setup costs $100, trade breaks cost $100 per day, and market data subscriptions cost $20 per month on top of that.
There is also a withdrawal fee of £7 if you wish to withdraw more than once a month. Per calendar month, you can make one free withdrawal.
Before engaging in trading activities, prospective traders are encouraged to read the relevant risk disclosure statements.
What is the commission rate for trading options on Interactive Brokers in the UK?
Options trading commissions on Interactive Brokers UK vary by option type and by the number of contracts exchanged. Options trading commissions with Interactive Brokers UK are said on their website to range from £0.15 per contract to £1 per contract across a tiered structure. The monthly contract volume will determine the applicable rate.
Does Interactive Brokers UK offer any discounts or promotions for new customers?
Currently, Interactive Brokers UK is running a campaign wherein new customers can receive a £55 commission credit as part of a promotion aimed at stock and share ISAs. By presenting the firm as a one-stop shop with advantageous commissions, a global presence, and a wide variety of investing and trading services, this advertising campaign is intended to attract potential new customers who are thinking about creating numerous accounts with the firm.
Offering a commission credit rather than a cash bonus was chosen purposefully to entice the high-net-worth, highly-engaged investor that makes up the bulk of the ISA market. Please note that this promotion has a limited time frame, is subject to certain limitations, and is only available with the ISA product and not with any of the other account options.
How to open an account with Interactive Brokers UK
To begin an account with Interactive Brokers UK, users are required to complete the electronic application, present required documents, and fund their account.
The application then gets scrutinized, and if everything checks out, the account can be funded. Individuals, families, and even small organizations can make use of Interactive Brokers UK’s services. It is vital to realize that there exists a high risk of loss in the online trading of stocks, options, futures, currencies, foreign equities, and fixed income.
What documents are required to open an account with Interactive Brokers UK?
If you want to open an account with Interactive Brokers UK, you’ll need to provide certain identifying information and documents to prove your residence and identity. Individual account essentials include the following:
- Applicant’s identification document (passport, driver’s license, or national identity card)
- Proof of the account holder’s residential address (such as a bank or brokerage statement, utility bill, etc.)
- A letter on the bank’s letterhead, signed and dated by an authorized bank representative, bearing the customer’s signature
Unless otherwise stated, all items should be quite current (usually within the past three to six months).
There could be additional requirements depending on the type of the account. For example, if it is a corporate account, proof of the company’s existence and address are required for a small business account, as are documentation attesting to the trading authority of each individual who will have access to the account.
How long does it take to open an account with Interactive Brokers UK?
Depending on the applicant’s personal circumstances and the availability of required papers, the time it takes to open an account with Interactive Brokers UK can vary. An individual’s identity and residence must be verified through the submission of supporting documentation during the application procedure.
After an application has been submitted, account financing can begin; nevertheless, all deposits must clear before trading can begin. There is little information about how long it takes to start an account with Interactive Brokers UK, but the process typically entails sending in some paperwork, waiting for an approval, and then making a deposit.
Individual circumstances and necessary paperwork will determine the precise timing of each step.
Interactive Brokers UK minimum deposit requirements
To open an account with Interactive Brokers UK, a minimum deposit may apply, and the stipulated amount varies depending on the type of account.
For individual, joint, trust and organisation accounts, there is no account minimum required. However, stocks and shares ISA charges £3 monthly minimum activity fee.
For broker accounts, a USD 10,000 (or non-USD equivalent) up front deposit is required for the first eight months.
Interactive Brokers UK Accounts
What types of accounts can you open with Interactive Brokers UK?
Interactive Brokers UK provides a diverse array of account types tailored to cater to various investor profiles and trading requirements, including:
- Individual Investor or Trader: This account is well-suited for solitary traders or investors seeking to engage in the trading of a broad spectrum of financial instruments, such as stocks, options, futures, currencies, bonds, and funds.
- Family Office: Specifically crafted for families aiming to manage their investments and wealth effectively, this account facilitates multi-user access with distinct levels of trading and account management permissions.
- Small Business: Tailored to the needs of small businesses, this account empowers them to oversee their investments and trading activities, providing multiple user access with varying levels of trading and account management permissions.
- Registered Investment Advisor (RIA): Designed for registered investment advisors, this account is geared towards those who wish to execute trades on behalf of their clients.
- Hedge or Mutual Fund: This account is apt for hedge funds and mutual funds seeking to trade a diverse array of financial instruments, including stocks, options, futures, currencies, bonds, and funds.
- Stocks and Shares Individual Savings Account (ISA): A UK-specific account, this allows tax-efficient savings and investments in stocks and shares for UK residents.
- Self-Invested Personal Pension: Tailored for the UK audience, this account permits individuals to save for retirement by investing in a personally chosen portfolio of stocks and shares, offering tax-free income and gains upon selling investments.
Interactive Brokers UK ISA
Interactive Brokers UK provides Individual Savings Account (ISA) accounts tailored for UK tax residents. This Interactive Brokers ISA UK account offers a tax-efficient avenue for saving, allowing individuals to contribute up to £20,000 in each tax year, spanning from April 6 to April 5.
According to HMRC rules, subject to potential changes, the income earned and gains from selling investments within the ISA account are tax-free.
Opening an ISA account requires no minimum deposit, and there is a minimum monthly activity fee of £3 for a Stocks and Shares (adult) ISA and £1 for a Junior ISA.
Interested customers can initiate the process of opening a stocks/shares ISA account by registering on the Interactive Brokers UK website and following the outlined steps in the account application process. It’s noteworthy that Interactive Brokers UK exclusively offers stocks/shares ISAs, including Junior stocks/shares ISAs for children under 18, with cash ISAs or lifetime ISAs not being available.
What are the benefits of opening an ISA with Interactive Brokers UK?
Opting for an ISA with Interactive Brokers UK entails several advantages:
- Commission Credit: New customers who choose Interactive Brokers for their stocks and shares ISA are eligible for a commission credit, a promotional incentive valued at over £50. This credit serves as an attractive feature for new customers opening multiple accounts, positioning the company as a comprehensive solution providing competitive commissions, a global presence, and diverse investing and trading services.
- Global Access: ISA accounts facilitated by Interactive Brokers UK offer the opportunity to accrue interest on uninvested GBP cash and provide access to global securities. This enables clients to engage in stock and ETF trading across more than 90 stock exchanges globally, spanning North America, Europe, and Asia.
- Tax Benefits: ISA accounts present tax-efficient avenues for UK tax residents, allowing them to save up to £20,000 in each tax year. Furthermore, these accounts offer tax-free income and gains when liquidating investments.
- Asset Protection: Assets held in an IB ISA are safeguarded up to the equivalent of $500,000, inclusive of a cash limit of $250,000, in the event of broker bankruptcy. This exceeds the coverage available under the UK’s Financial Services Compensation Scheme (FSCS).
- Low Commissions: Interactive Brokers UK stands out by providing clients with transparent and competitive commissions, empowering investors to readily compare offerings.
How does Interactive Brokers UK ISA compare to other providers?
In comparison to its competitors, Interactive Brokers UK’s Individual Savings Account (ISA) offering stands out thanks to its low fees, global market access, and tax benefits. Low and clear commissions are one of the platform’s defining features, making it easy for investors to shop around among the various options presented.
Having access to global securities enables investors to trade stocks and ETFs on more than 90 stock exchanges worldwide, including those in North America, Europe, and Asia. Notably, ISA accounts provide tax-efficient alternatives for UK tax residents, as they provide deposits of up to £20,000 per tax year with tax-free income and gains upon investment sales.
Investors should evaluate all of their options, including the charges and fees connected with keeping an ISA or any other account, before making any investment decisions, as the ISA offering from Interactive Brokers UK is new to the market.
Interactive Brokers UK SIPP
Accounts with Interactive Brokers UK can be set up as a Self-Invested Personal Pension (SIPP) for those living in the United Kingdom. It is crucial to note that Interactive Brokers UK does not directly enable SIPP accounts; rather, clients must work with an SIPP Administrator who is registered and recognized by the UK government.
These administrators play a crucial role in onboarding clients’ SIPPs while ensuring compliance with terms and conditions. They are registered with the Financial Conduct Authority and meet Interactive Brokers UK’s exacting criteria. Sub-accounts can be created and trades can be made for SIPPs managed by the SIPP Administrator’s clients at Interactive Brokers UK.
For those who are eligible for UK tax relief, the SIPP account itself offers tax-free income and gains upon the sale of investments. Starter SIPP accounts require no opening deposit of GBP 0 and have a monthly activity cost of just £10.
Bottom Line
For those looking for a platform that caters to the demands of professional traders and investors, Interactive Brokers UK is worth considering. Investors in the United Kingdom find the platform intriguing because of the many investment options it provides, the powerful capabilities it offers, and the low commissions it charges.
Interactive Brokers UK has been quite successful, and this includes the ISA that it offers for investing in equities and shares. This particular service has gained recognition, boosted by a commission credit offer strategically intended to entice new consumers.
This move is intended to increase the company’s user base and brand recognition in the UK market by highlighting the company’s convenient one-stop-shop nature, low commission rates, and international reach.
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