Here in this article, we have explained everything about IBKR account types. Interactive Brokers (IBKR) is known for offering the lowest commissions and margin rates.
Therefore, it is considered the best option for every type of trading.
At the end of this article, you will be able to understand how the comparison is made by an online stock broker on important key factors. You will learn about the important factors you need to consider before opening an account.
Why Interactive Brokers?
This stockbroker is a good fit for investors, frequent traders, and people trading on margins.
The margin rates of Interactive Brokers are much easier to trounce the competition.
Interactive Brokers offer a broad scope of resources in 135 business sectors and 33 nations.
It has excellent fundamental analysis and is an advanced platform for trading.
Moreover, they accept trade opportunities from more than 220 countries, including Australia, Japan, Switzerland, Canada, Singapore, many more.
Here are some detailed pros of using the IBKR account types:
- As mentioned earlier, they have low margin and interest rates.
- It offers a solid platform for trading.
- You will experience commission-free trading.
- It takes zero transaction fees on mutual funds.
- It offers wide trading offering from around the world.
- It has excellent trading tools and analytics.
IBKR accounts, however, might have a little complicated pricing structure.
They offer minimum monthly commissions. Moreover, some of their research tools might require a fee.
Different IBKR account types are designed for the need of each individual.
They are made for active traders so they can experience their top benefits.
There is no doubt that there might be other online stock brokers in the market for everyone; however, IBKR offers killer features that make it stand out from others.
- Low commission rate
One of the best features to brag about all IBKR account types is its low commission rates.
It offers a platform for trading and a commission rate as low as $1 per trade share.
This pricing is designed exclusively for investors and traders who want to maximize their profit and minimize commissions.
- Lower Margin Rates
In comparison to other companies, the IBKR account offers lower margin rates.
While most of the companies take an interest rate of 10% margin loans on every trade, Interactive Brokers cost a third of it.
However, the difference comes from the investors who take large margin rates for long periods.
- International Trade
The international trading system enables countries to exchange goods and services with each other.
It offers worldwide chances to nations to be presented with products that are not accessible in their own country.
They can get those goods from other countries, trading them for goods or money in return.
- Usage of IBKR account types
Over the recent years, the onboarding process of IBKR has gotten easier.
It offers you to open an account without funding it immediately. It gives you a margin of three months (90 days) to do so.
Moreover, they have an updated website that is well-designed, has an excellent client portal, an AI digital assistant, and help for all your concerns.
Interactive Brokers can support multiple platforms, which include desktop, web, and mobile versions.
They are easily accessible for both android and iOS devices. They offer you access to real-time streaming data, charts, tools, research, and news for your trading needs.
The news they share is fetched from dozens of sources. These include Benzinga, Morningstar, Seeking Alpha, etc.
If you want to access premium news, it is also available with a monthly subscription fee.
- Enhanced Trading Experience
With an IBKR account, you get a real-time view of your accounts. It has an easy approach to trade tickets and set up funds.
Most investors who need to have the greater part of their intelligent dealer accounts use broker workstations (TWS).
A Trader Workstation has enhanced functionality and is made for active investors. These investors demand flexibility and trade multiple products.
They can define their quick keys which will allow them to place orders instantly.
Moreover, it offers investors to stage their orders for later. It offers a trading experience where you can place, modify, and manage your order directly.
You can also stream live quotes, charts, and news across these platforms.
IBKR accounts also offer a mobile trade experience, where you can manage the workflow from one step to another.
- Other platforms
IBKR successfully supports other order types on trader workstations, which are attached to each order type.
It offers one-cancels-other orders, as you can choose from and combine with your price and time. TWS has something for every individual.
Whether you want to trade stocks, ETFs, options, futures, or currencies – Trader Workstation is for you.
- Better Trading Technology
IBKR uses SmartRouting technology for spray and sequential order routing methods.
However, it depends upon the order and specific market conditions. Their order execution engine reroutes all or a few chunks of your order, to achieve optimal execution.
This practice also allows attaining better prices and maximizing any potential rebates.
In its SmartRouting pool, IBKR has eight dark pools. It is an excellent source to improve large volume and block orders while you take advantage of hidden institutional order flows.
SmartRouting also represents each leg of spread for options traders. It allows spreading orders independently and submitting each leg at best possible value.
- Enhanced Customer Service
All of the IBKR account types are known for their exceptional customer service, as the company is always working to improve its services.
One of the features that the company added recently was an IBot feature, which is powered by AI. This service can answer questions that are asked in plain English.
This feature is available throughout their website and all the trading platforms they use.
The main purpose of this feature is to enable customers to get answers to the questions quickly without having to wait for long periods. Additional customer support benefits they offer are listed below:
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- They have toll-free telephone support, which is available 24 hours a day and six days a week.
- They offer to call back service if you want to hang up or get disconnected.
- Their website and trading platforms offer you online chat with a human agent.
- They have a secure message center for trading and web platform.
- The Artificial intelligent bots routine the customers to online FAQs.
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Here were some of the best benefits we have listed about having an Interactive Broker account.
However, there is much more to IBKR than just the above-mentioned few advantages.
Are you planning to choose the best IBKR account but are unsure which one you should choose?
There are various IBKR account types designed according to the need of each individual.
Here we have listed the purpose of each account time. You can use this as a guide to choose one that suits your needs.
Individual, Joint, Trust, IRA, and UGMA/UTMA
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- Individual account
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This account is owned by a single individual, and the assets in the account are possessed by a single individual.
The individual has access to all of the account functions and can add the user as a Power Of Attorney.
Lastly, the margin on the account is taken as cash, RegT, and portfolio margin.
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- Joint Account Holders
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Out of all the IBKR account types, the next one is a joint Interactive Broker account.
This type of account belongs to two holders, and they have two types of possessions.
It can be for tenants with rights of supervision, tenancy in common, community property, or entire tenancy.
All the assets held in this account are owned by two individuals. They both have access to all functions and can add users as Power Of Attorney. Their margin type is the same as the individual account.
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- Trust Account:
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The next on the list is a trust account. It is a legally established account in which the possessions are held by one party but for the benefit of another party.
The assets in this account are controlled by a Trustee with Settlors and Grantors.
One or more trustees can have access to all the functions of the account. Their margin type is also the same as that of an individual account.
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- IRA
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IRA account stands for Individual Retirement Account, and it is available to individuals who are US tax residents only.
It is also controlled by a single account holder. The sole owner has access to all functions like adding users, etc.
Their margin type is the same as the individual account.
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- UGMA/UTMA
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This type of account is held by parents or guardians on behalf of a minor until they have reached a specific age. This is available to US residents.
The assets in this account are owned and managed by the custodian user.
The individual custodian can make all the decisions for the account. It is a cash account and does not have a margin policy.
- Friends and Family Accounts
It is a master account that is linked to other individual client accounts. The master account is responsible for fee and trade collection. However, the advisor is allowed to have a single client account for their trading.
The markups are the percentage of equity, flat fee, percentage of P&L, a fee per trade, and manual billing.
However, the markups can vary depending on the country you live in. The advisor has access to trading and can perform most account management functions.
Clients do not have the approach to trading; however, they have access to management functions.
Lastly, the margin on the account is taken as cash, RegT, and portfolio margin. Each client has its margin.
- Family Office Accounts
Next on the list for IBKR account types is a family office account. In this account type, an individual is the family office manager.
It is a master account that is linked to multiple client accounts. The markups are the same as Friends and Family Accounts.
The family office manager has access to some or all accounts and functions. The clients or users can trade directly and view their statements.
- Small Business Accounts
This account is made for a small business, a partnership, or a company with minimum liability or incorporated legal structure.
It is a single account that holds the entity and assets of the whole company.
The manager can configure their users to have some or all trading and account management functions.
The margin applies to cash, RegT, and portfolio.
- Advisor Account
This account is under an organization or an individual who manages both client administration (wealth) and is also responsible for his money management.
The said individual also has a master account linked to his account. This master account is responsible for fee collection and trade allocations. He or she can have their account white branded with the corporate’s identity.
The advisor will have access to trading and most of the account functionality.
He can add multiple users if he wants, and each user will be assigned different functions over different client accounts.
The assigned individual can enable the users to trade if he wants because it is not done by default.
The margin is applied in Cash, Reg T, and Portfolio Margin, and each individual is margined independently.
- Money Manager
This account is managed by an individual or an organization that is hired on behalf of another wealth manager.
In this account type, a new separate client account is opened by an individual, which is then managed by a money manager.
The margin on this account type is inherited from the client’s wealth manager client account.
The wealth manager and money manager accounts have separate margins.
However, the money manager has access to trading only. The assets are moved to the client who is managing the money.