This article provides a comprehensive comparison between two market leaders in the financial world: IG and Interactive Brokers. We examine various factors to help you determine which broker might be a better fit for your needs, including costs, tools, trading platforms, and assets available. Without further ado, let’s dive into an in-depth comparison of IG vs Interactive Brokers.
History of IG vs Interactive Brokers
Before we delve into the specifics, let’s briefly trace the origins and development of both brokers.
History of IG
Founded in 1974, IG is a British broker specialising in forex and CFDs. It has grown into one of the largest financial intermediaries globally, with offices in 17 countries and over 313,000 clients across five continents. A notable milestone includes establishing a base in Madrid in 2007.
Originally known as IG Index, the firm began by making the gold market accessible to retail traders. Gradually, it broadened its product portfolio, amassing a significant customer base and revenue stream. As of June 2021, IG stood as the leading CFD provider excluding forex, according to its financial statements.
IG Group, a London-based financial intermediation services holding company, operates IG. IG Group Holdings, listed on the London Stock Exchange, is a part of the FTSE 250 index.
History of Interactive Brokers
Interactive Brokers, also with over 40 years of experience, stands as a formidable international financial intermediary. Its main headquarters is in Greenwich, Connecticut. It has successfully expanded to become one of the leading brokerage companies, executing over 2 million trades per day. With 2,400 employees stationed worldwide, it lists shares on Nasdaq under the ticker IBKR.
The company aims to provide superior technology for obtaining liquidity under the best conditions. Its competitive edge comes from its pricing, speed, volume, product offering, and advanced investment tools. Barron’s recognised Interactive Brokers as the best online broker for four consecutive years.
Regulation and reliability: IG vs Interactive Brokers
IG Group Holdings is made up of several subsidiary companies, which is typical for brokers offering services globally. IG Markets Ltd, part of the IG Group, provides services in the UK. It’s registered in England and Wales under number 04008957.
IG is authorised and regulated by the Financial Conduct Authority in the UK.
IG guarantees | Is my money safe?
IG is covered by the Financial Services Compensation Scheme (FSCS), providing compensation for its clients should it fail to meet payment obligations. The scheme covers up to £85,000.
Furthermore, IG ensures clients’ capital is separate from its assets, with custody handled by regulated banks. This policy ensures creditors cannot access clients’ capital.
Another protective measure includes preventing clients’ accounts from having negative balances.
Interactive Brokers regulation
Interactive Brokers Group is regulated by two of the most stringent regulatory bodies, namely the Securities and Exchange Commission (SEC) of the United States and the Financial Conduct Authority (FCA) of the United Kingdom.
Interactive Brokers guarantees | Is my money safe?
Similar to IG, in case of bankruptcy, Interactive Brokers’ client funds are covered by the FSCS for up to £85,000 per client. Some other protection measures in case of bankruptcy include segregation of clients’ accounts and negative balance protection.
IG vs Interactive Brokers: account types
Opening an account with IG
Opening an account with IG is a straightforward, fully online process. These are the steps you should follow:
- Click to create a new account and fill in your personal information.
- Complete the assessment regarding your financial knowledge.
- Verify your identity and residence as per KYC requirements.
- Deposit your funds.
IG offers different types of accounts for retail clients: spread betting account, CFD trading account, demo account, share dealing account, and smart portfolios account.
Opening an account with Interactive Brokers
The process of opening an account with Interactive Brokers is similar to IG’s – you need to provide your personal details, verify your identity, fill in the assessment, and deposit your funds.
Although Interactive Brokers caters to a broader audience, including professional traders or companies, retail investors and traders can choose from a cash account (limited transactions), and a Reg T account for more advanced traders (minimum deposit of $2,000).
You also have access to a free demo account, which you can use to test the broker’s features before depositing real money.
Products & assets: IG vs Interactive Brokers
Next, we are going to see the entire portfolio of products offered by both brokers, who as investment brokers for professionals, have a wide variety of investment assets.
IG: products and assets
Interactive Brokers offers a variety of products, including:
- Interest rates
- Volatility trading
Next, IG also offers:
- Turbo 24 (Ireland only): Issued every hour at a specific price, Turbo24 (turbo certificates) are only available in Ireland.
- Options: Options trading is available via CFDs and spread betting.
- Futures trading: you can trade futures on indices, commodities, or bonds via spread-betting or CFDs.
Interactive Brokers: products and assets
Next, this is the expansive offer put forward by Interactive Brokers:
- Investment funds
Interactive Brokers amasses assets from over 150 markets, including:
- Europe: Madrid, Paris, London, Milan, Amsterdam, Frankfurt, Brussels, Vienna, Lisbon, etc.
- America: Canada, Mexico, Brazil, NYSE, Nasdaq, CME, etc.
- Asia and Pacific: Australia, India, Hong Kong, Tokyo, Singapore, South Korea.
- Africa: South Africa.
IG Vs Interactive Brokers: commissions & other fees
A significant factor for all traders when comparing IG and Interactive Brokers is the associated costs, including commissions, spreads, and other fees. Let’s have a look at each broker’s cost structure.
IG: cost structure
In the typical fashion for CFD trading, IG charges trading fees in the form of spreads. A notable exception is stock trading, where fees are fixed (i.e., £3 for UK stocks and £0 for US stocks in the share-dealing account).
With IG, trading costs are highly competitive. Spreads are flexible and may change based on liquidity and market circumstances. Here are some examples of IG’s costs.
- Spreads for trading forex with IG
IG applies varying spreads for forex trading, determined by specific market conditions at the time. For instance, the highly liquid EUR/USD pair carries a minimum spread of 0.6 pips.
|Market||Minimum spread||Average spread||Average spread (1:00-22:00)|
- Commissions for trading stocks with IG
Trading stocks depends on which type of account you decide to open. If you open a CFD or spread betting account, there will be commissions only for CFDs, but spreads will be charged for both types. Meanwhile, for the share-dealing account, the commissions start at £0 for US stocks.
The overnight premium, known as a swap or overnight fee, is applicable if your derivative position (such as CFD) is not closed during the same trading day. The swap is a type of interest applied to all derivative positions.
The amount varies from one market to another, as it depends on the interest rates plus an administrative cost applied by the broker.
- Other IG costs
Based on which features you decide to use, you may need to cover additional costs, which you can discover in our in-depth IG review.
Interactive Brokers: Cost structure
Interactive Brokers, on the other hand, is one of the cheapest brokers available. You can opt for fixed pricing or tiered pricing, whose costs decrease with trading volume.
- Stocks and ETFs: 0.05% of traded value with £3 minimum per order
- Options & futures: £1.70 per contract
- Spot Forex: 0.20 pips with a minimum of $2 per order
- Bonds: 0.10% of trade value for UK bonds, 0.002% for US bonds
- Mutual Funds: £0 for selected US funds, €4.95 for other funds
For more details, have a look at our in-depth Interactive Brokers review.
Deposits and withdrawals: Interactive Brokers vs IG
Deposits with IG
IG offers the possibility to make deposits and cash withdrawals via three different methods:
- Credit or debit card
- Bank transfer
You need to deposit at least £250 if you use cards or PayPal, but there is no minimum for bank transfers.
Withdrawals with IG
The same payment methods are available for withdrawals, namely cards, PayPal or bank transfers. There is a minimum limit of £100 for withdrawals (or the entire balance if you have less in your account).
Deposits with Interactive Brokers
For deposits with Interactive Brokers, the first step is to access the platform. It offers over 20 base currencies, including GBP. There is no minimum deposit required.
Withdrawals with Interactive Brokers
If you want to withdraw funds from Interactive Brokers, you can make the request from the platform by clicking on “your portfolio” and selecting the “withdraw” option.
It is worth noting that Interactive Brokers only allows free fund withdrawals once a month. If you need to make more withdrawals, you need to cover a fee of £10.
Trading platforms: IG vs Interactive Brokers
IG trading platforms
One of the strengths of IG is precisely the trading platforms offered: MetaTrader 4, ProRealTime, IG Online Platform, and mobile applications.
- Own online trading platform: Proprietary platform with many tools, charts, news, and signals, boasting high execution speeds.
- Trading app for mobile devices
- Metatrader 4: A renowned platform enabling automated trading strategies even without programming knowledge. It is available both for PCs and mobile phones.
- ProRealTime: A powerful platform with advanced analytical tools for professional traders, costing £30 per month or free with at least 4 trades monthly.
The IG platform and mobile application are renowned for their exceptional design. They boast a user-friendly interface that is both intuitive and highly customisable.
With features such as watchlist creation, one-click trading, a wide array of order options, as well as alerts and notifications, the platform provides traders with comprehensive tools for analysis and efficient management. It’s worth noting that IG’s platform has garnered recognition from the industry, solidifying its reputation as a top choice among traders.
Interactive Brokers trading platforms
This broker’s trading platform, known as Trader Workstation Platform, caters to the needs of professional traders. While it offers an abundance of information, its utilisation can be somewhat intricate.
There is room for improvement in terms of interface design, as some traders find their experience with the platform less than satisfactory.
Despite this, the platform boasts extensive functionality, including a diverse range of order types, complimentary tools for efficient operation management, and comprehensive reporting capabilities.
So, let’s take a closer look at Interactive Broker’s tools:
- Trader Workstation Platform (TWS): The Trader Workstation platform is IBKR’s flagship offering. It is designed for active traders who trade multiple products and require power and flexibility.
- Client Portal Platform: The IBKR web application serves as a centralised control panel, enabling users to monitor quotes, place trades, view account balances, track profits and losses, and more, all within a single interface.
- IBKR Mobile Platform: Designed for smartphones, the IBKR Mobile platform is an ideal solution for on-the-go investors who require instant access to comprehensive information and the ability to trade remotely.
- GlobalTrader Platform: The GlobalTrader platform facilitates seamless trading of global assets, including individual stocks, mutual funds and ETFs. It offers compatibility with iOS and Android devices, ensuring convenient access for traders.
- IMPACT Platform: The IMPACT platform is a mobile application with a focus on Environmental, Social, and Governance (ESG) considerations. It empowers investors to align their portfolios with companies that share their values. Through IMPACT, users can understand a company’s support for their values, select preferred business practices, and construct a socially responsible investment portfolio.
- IBKR API Platform: IBKR provides a range of API tools to cater to investors of all experience levels. From the user-friendly Excel API to the robust FIX API, these tools offer seamless integration and automation. The TWS API is well-supported and offers numerous examples to assist beginner investors in managing their profits effectively.
IG vs Interactive Brokers: customer service
IG: customer service
Another highlight of IG is the quality of customer service, which is part of the trading experience.
The IG team is extensively trained to provide expert guidance to traders regarding products and platforms. They are well-equipped to address any inquiries or uncertainties that traders may have.
This broker is renowned for the exceptional quality of its training programs, ensuring that traders receive comprehensive and valuable education in the field.
IG has several means of contact:
- Live chat
IG’s customer service is available on a nearly 24-hour schedule, from 8 am Saturday to 10 pm Friday.
Interactive Brokers: customer service
Interactive Brokers provides a comprehensive help section on its website, offering users access to various resources. Within this section, traders can explore the FAQ section to find answers to common queries or concerns. Additionally, you can contact the customer service team via:
- Phone (24 hours a day)
- Live chat
- Web form
Furthermore, Interactive Brokers offers a training centre that encompasses a range of educational resources. Traders can benefit from seminars, instructional videos, a stock market glossary, and an array of other services and tools designed to enhance their investment operations.
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Conclusions: IG vs Interactive Brokers
Undoubtedly, both IG and Interactive Brokers hold prominent positions as leaders in the financial intermediation industry. These brokers boast extensive experience, strong regulatory frameworks, industry recognition, and global presence.
Both intermediaries provide a wide market offering, catering to diverse trading preferences. However, they are not very novice-friendly; if you are new to trading and investing, you may want to check the best brokers for beginners instead.
When it comes to the best trading platforms, IG’s platforms are highly regarded in the industry. In comparison, Interactive Brokers offers a powerful and functional platform but may have areas that could benefit from improvement.
In conclusion, the comparison between IG and Interactive Brokers reveals that both brokers are capable of delivering quality services with competitive costs, but cost-focused traders or investors may want to have a look at these best commission-free brokers. The ultimate choice between them will depend on the specific needs and preferences of individual clients.
Summary: IG vs Interactive Brokers
Finally, the following table summarises the characteristics of each broker:
|Minimum Deposit||£0||No minimum for bank transfers, £250 minimum for PayPal, cards|
|Stock trading fees||From £3||From £0|
|Forex trading fees||From 0.2 pips||From 0.6 pips|
|Withdrawal Fee||£0 (one per month)||£0|
|Financial instruments||Stocks, ETFs and mutual funds, forex, bonds, options, futures, CFDs, commodities||Forex, stocks, bonds, indices, commodities, ETFs, IPO, sector trading, options, futures|
✅Multiple powerful trading platforms
✅Access to many assets and markets
|✅No withdrawal fees|
✅Competitive cost structure
✅Advanced platforms and tools
✅Quality customer support
|Weaknesses||❌Quite complex for new traders||❌ Limited payment options|
|User profile||Advanced traders or investors looking for access to various markets and assets||Advanced traders or investors looking for powerful trading tools and broad market access|
How do deposits and withdrawals work with IG and Interactive Brokers?
Both IG and Interactive Brokers offer multiple methods for deposits and withdrawals, including card transactions, PayPal, and bank transfers. However, while IG imposes no withdrawal fees, Interactive Brokers permits one free withdrawal monthly with subsequent withdrawals incurring a fee.
Which broker should I choose, IG or Interactive Brokers?
The choice between IG and Interactive Brokers depends largely on your trading needs and experience. Both brokers are suitable for more experienced individuals, or for anyone who wants to gain access to advanced platforms and trading tools.
Can I trade a variety of financial instruments with both IG and Interactive Brokers?
Yes, both IG and Interactive Brokers provide access to a broad range of financial instruments from many markets around the world.