Is Interactive Brokers Safe? An Honest Review
Considered one of the most popular brokers, Interactive Brokers is a vast brokerage firm known internationally. Founded in 1977 in the United States, this firm has around 24 offices in almost 14 different countries and is a platform that attracts thousands of active traders.
There are so many things that Interactive Brokers offers that other firms fail to provide. For instance, it comes with advanced features, has vast securities options, and presents unbelievably low margin rates.
What’s more, Interactive Brokers has clients both in and outside the United States, giving it an international tag. One of the best things about this brokerage firm is that it serves 135 markets, a goal that many firms fail to achieve.
But is Interactive Brokers safe? Moreover, is Interactive Brokers legit? If you have the same questions in your mind, we have a straight answer for you.
Yes, Interactive Brokers is a safe and legitimate firm regulated by various agencies worldwide. Besides, it is also a leader of our forex rating, so you can entirely trust it. But if you still want a detailed answer, dig into this review without further ado.
Interactive Brokers Pros and Cons
Before we get into the details, let's list some good and bad points of this brokerage firm. Since Interactive Brokers is a favorite of many traders, you may not find any apparent downsides, but we have still analyzed each aspect to draw an honest picture.
👍 Interactive Brokers Pros
• Known to support an extensive list of fantastic trading products, Interactive Brokers allows every trader to invest in their preferred assets.
• Interactive Brokers provide powerful trading tools for professional traders. There are analysis tools and features such as Fundamental Explorer that offer quick access to mutual funds and stock-related data.
• The brokerage firm offers meager margin rates compared to its competitors.
• It offers its services to both national and international traders.
• Interactive Brokers has a legitimate reputation and is known for its high safety standards.
👎 Interactive Brokers Cons
• Less active or unprofessional traders might find the brokerage platform a little intimidating. Since there are many tools and features on offer, new traders may take time to understand them.
How do Governments Regulate Interactive Brokers?
It is always important to know whether a brokerage firm is safe or not before you plan to join it as a trader. You can’t risk your hard-earned money without doing any research.
The good news is that Interactive Brokers is a highly regulated platform. Various financial authorities, such as the US Securities and Exchange Commission and the Financial Conduct Authority in the UK, govern the activities of the firm.
What’s more, Interactive Brokers has a pretty extensive track record and also discloses its financials publicly, ensuring excellent transparency for all its customers. It is also listed on the stock exchange, which confirms the legitimate status of the platform.
In addition to that, Interactive Brokers is known to excel under all security standards set by the industry. For instance, anyone using the platform through their smartphones can only log in via their fingerprint or face recognition.
Also, the user has to pass through multiple two-factor authentications before accessing their account. Securities Investor Protection Corporation (SIPC) is responsible for looking after all the securities accounts and ensuring the safety of the clients’ funds.
If you still doubt the safety elements, there are many examples that highlight how Interactive Brokers is a transparent firm. For instance, all pricing details are readily available on the official website, and there is no concept of “hidden costs .”Additionally, the customer support at Interactive Brokers is top-notch, ensuring that every trader receives all the help they require.
So, with all the above points in mind, it is safe to say that Interactive Brokers is one of the safest brokerage firms worldwide. It follows high security and regulation standards, making it trustworthy.
How is Interactive Brokers Protecting Your Money?
If you have invested your money through Interactive Brokers, know that your funds are in safe hands. SIPC protects all the funds stored in the securities account, and there is coverage of up to $500,000 available for every customer.
Further, all the clients’ funds are strictly reserved and segregated from the firms’ assets, as per the regulations set by Commodity Futures Trading Commission and Securities and Exchange Commission. The firm is responsible for performing weekly checks and calculations to prevent client and company funds mix-ups.
Another attractive thing about this firm is that it offers negative balance protection to all its clients. This protection is provided by almost all big brokerage firms and saves you from losing more money than you already have. This means you don’t suffer any loss after even a financial turbulence phase.
What’s more, Interactive Brokers also provides the facility of a deposit insurance fund. The firm features an Insured Bank Deposit Sweep Program that gives an opportunity to all eligible customers to get FDIC insurance of up to $2500,000. So again, this facility is a pretty promising one for protecting your funds.
Since Interactive Brokers is a highly regulated firm, the company can’t risk losing your money. And so it has placed many security measures and programs in place that successfully save all clients from experiencing any bad episode.
Does Interactive Brokers Accept My Country Residents?
There is a massive list of countries that Interactive Brokers accept its clients from. You can access that list from the official website, but we have listed a few country residents who can make an account with Interactive Brokers for your assistance.
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United States
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United Kingdom
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Dominican Republic
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East Timor
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Egypt
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El Salvador
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Australia
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Hong Kong
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Antarctica
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Angola
Should I Trust Interactive Brokers Account Verification?
Since Interactive Brokers is a trustworthy firm, you should trust its account verification process. If you are not a citizen of the United States, you may be asked to provide your ID number or Social security number. You should know that any information you share stays safe in the platform's system and is not passed on to any third party.
You may also be asked to share any bank details or information on your address and workplace. Don’t hesitate to send accurate data; otherwise, you may face issues opening an account. As much as Interactive Brokers take pride in providing a high-quality trading experience, the firm also ensures that anything their client shares is kept safe from outsiders.
Interactive Brokers Background
As shared earlier, Interactive Brokers was founded in 1977 and is a USA-based brokerage firm. In the last four decades, the firm has successfully managed to gain a leading position in its industry and aims to maintain its position by offering high-quality services globally.
Interactive Brokers or IB has a trading name, IBKR and is also listed on the stock exchange. This listing allows the firm to become more transparent with its clients.
The firm hasn’t faced any legal issues, but in 2020, US regulators fined it $38 million for poor monitoring of funds. This action clearly shows how Interactive Brokers is a well-regulated company that can’t get away with poor performance.
Summary: Is Interactive Brokers Safe?
If you have been thinking of opening an account with Interactive Brokers, you can do so now because it is one of the world's safest and most well-reputed brokerage firms. Moreover, since many international bodies, such as the US Securities and Exchange Commission regulate it, the chances of it eating up your money are pretty low.
Besides, it protects your money through features such as negative balance protection and account segregation, ensuring that you don’t face any financial problems. Plus with such a large customer base and offices in various countries, the chances of it being secure increase manifold.
Top 10 Reviews on Interactive Brokers
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Comment
What stands out for me with Interactive Brokers is their mobile app. I use the IBKR Mobile app a lot when I’m not at my desk, and it offers pretty much the same experience as the desktop version. The ability to trade everything from stocks to options while on the go is a huge plus. It also has features for international trading, which makes it easy for me to handle trades across multiple markets. The app’s interface is straightforward and user-friendly, allowing me to monitor my portfolio, execute trades, and even access research tools seamlessly. While it might lack some advanced charting features, it’s still one of the most versatile apps I’ve used, especially for global traders like me
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Comment
I am a client of interactivebrokers and I have never faced any problems during the whole time. I am completely satisfied with the service: the staff is always friendly, responsive and ready to help, which really leaves a good impression. Special thanks to the operators - their attentive attitude to people creates a feeling of care and support. It is a pleasure to work with a company that values its customers and does everything for comfortable service!
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Comment
As far as my experience is concerned with Interactive Brokers, the thing I love most is the sheer variety of markets available. The GlobalTrader app lets me trade in over 90 different markets, which is super convenient for someone like me who likes to diversify. The interface might feel overwhelming at first, especially on Trader Workstation, but once you get the hang of it, it’s extremely powerful. I also appreciate the competitive pricing and order options that help keep my trading costs low.
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Comment
Interactive brokers offer a huge variety of trading instruments, which is certainly pleasing. The opportunities for trading and diversification here are excellent. However, there is one minus - the website interface is only partially translated into other languages, and it is a bit disappointing. It would be more convenient if the whole platform was available in different languages, especially for traders who do not speak English.
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Comment
Interactive Brokers provides access to 135 markets from 33 countries, which is a huge advantage. This allows traders to easily diversify their portfolios and find opportunities around the world. I am very pleased with this broad coverage and the ability to trade in a multitude of international markets.
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Comment
I work mostly on signals. This kind of trading suits me very well, because I have a main job. It is convenient, I am not distracted by trading charts for a long time, it is possible to trade on the currency market in this way, combining work. I am satisfied with everything at Interactive Brokers, I plan to continue trading here.
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Comment
There are no problems with withdrawal in Interactive Brokers. I withdraw profits every month. Everything arrives on time, requests are processed quickly. Withdrawal is equally fast for $350, for example, and larger amounts.
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Comment
I am very glad that I found Interactive Brokers, because it is convenient to work with — the service is well made and streamlined, the user account is convenient, and you can trade on different platforms and use robots. There are a lot of tools for traders. In general, their approach to work is serious.
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Comment
I recently started trading with interactive brokers, but I am already trading on a live account. There is no delay in withdrawing money, the execution is excellent, and they make life easier for traders, as they allow you to trade with different strategies. You can try whatever you want and the choice of platforms is amazing, so there is a space for experiments.
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Comment
There are no problems with Interactive Brokers. All trading operations are carried out as needed. There is a license and regulators, and that definitely says a lot.
FAQs
Here are some common questions on this topic.
Is Interactive Brokers credible?
Yes, a credible brokerage firm offers excellent security against your funds.
Who founded Interactive Brokers?
The brokerage firm was founded by Thomas Peterffy, a computer programmer with a vision.
Is this firm good for long-term investors?
Yes, since Interactive Brokers offers a wide range of trading products and demands a very low trading fee, long-term investors can benefit by opening an account.
Is there any minimum balance requirement when opening an account?
Yes, there is. If you plan to open an account for Interactive Advisors investment specifically, ensure to fund your account with at least $100. For the details on other accounts, visit the website for more information.
Glossary for novice traders
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1
Broker
A broker is a legal entity or individual that performs as an intermediary when making trades in the financial markets. Private investors cannot trade without a broker, since only brokers can execute trades on the exchanges.
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2
Diversification
Diversification is an investment strategy that involves spreading investments across different asset classes, industries, and geographic regions to reduce overall risk.
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3
Investor
An investor is an individual, who invests money in an asset with the expectation that its value would appreciate in the future. The asset can be anything, including a bond, debenture, mutual fund, equity, gold, silver, exchange-traded funds (ETFs), and real-estate property.
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4
SIPC
SIPC is a nonprofit corporation created by an act of Congress to protect the clients of brokerage firms that are forced into bankruptcy.
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5
Trading
Trading involves the act of buying and selling financial assets like stocks, currencies, or commodities with the intention of profiting from market price fluctuations. Traders employ various strategies, analysis techniques, and risk management practices to make informed decisions and optimize their chances of success in the financial markets.
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Team that worked on the article
Mikhail Vnuchkov joined Traders Union as an author in 2020. He began his professional career as a journalist-observer at a small online financial publication, where he covered global economic events and discussed their impact on the segment of financial investment, including investor income. With five years of experience in finance, Mikhail joined Traders Union team, where he is in charge of forming the pool of latest news for traders, who trade stocks, cryptocurrencies, Forex instruments and fixed income.
Olga Shendetskaya has been a part of the Traders Union team as an author, editor and proofreader since 2017. Since 2020, Shendetskaya has been the assistant chief editor of the website of Traders Union, an international association of traders. She has over 10 years of experience of working with economic and financial texts. In the period of 2017-2020, Olga has worked as a journalist and editor of laftNews news agency, economic and financial news sections. At the moment, Olga is a part of the team of top industry experts involved in creation of educational articles in finance and investment, overseeing their writing and publication on the Traders Union website.