Interactive Brokers gets rid of monthly fees & minimal account values

[melaninzombie]

@matheww1 I use IBKR PRO, TWS software on my laptop, I am not a US citizen, not sure if that makes any difference

 

[dartman]

@jacob_ Hey @jacob_, thanks for sharing! I have DeGiro, It works, and It's OK, but I guess it could be better (on the charts and customer services, and some "surprises", e.g. when it sell and re-buy the whole position when there is a split), and could not find a better one in EU. I always wanted to try IB but always postponed for the inactive fee... time to create an account! Do you have a referral link you can share with me?

I know there is plenty in reddit, but I wanted to reward you specifically for sharing this info!

 

[jacob_]

@dartman Thanks a lot. You can check out my blog https://www.expatfinance.us/, where I also list some referral links.

However, in case of IBKR I'm not sure if they work for European customers anymore. In general, they are running an attractive promotion, namely the referred person gets 1% of their deposits in IBKR stock (valued up to 1000 USD). A friend of mine signed up last December and he got the promotional bonus, but it didn't work for another collogue.

Please feel free to try it out, but I can't guarantee that it works for EU customers. Either way, thanks a lot for thinking of me!

 

[colouredfaithful]

@jacob_ Do they allow trading by IEX?

 

[jacob_]

@colouredfaithful I believe you can, but I'm no expert. I found this information: https://money.stackexchange.com/questions/134898/can-i-trade-stocks-in-iex-with-interactive-brokers.

 

[submiracle]

@jacob_ OK I was just looking for info about IBKR. So is this now a viable option to just buy and hold a few stocks on exchanges without much fees? I still don't see a simple cost report or a cost calculator like Degiro.

 

[jacob_]

@submiracle I would say yes. Check the commission structure here: https://www.interactivebrokers.eu/en/index.php?f=39753&p=stocks2.

Maybe Degiro is a bit more transparent, but you will generally pay 0.35 USD or 1 USD for regular trades on US exchanges and a bit more (4 EUR!?) in Europe. I'm happy with it as buy and hold investor (previously you needed to go up to 100k USD to avoid monthly fees).

 

[submiracle]

@jacob_ Right so now I would only pay commission and nothing else on orders, is what I understand?

I am not looking at American or European shares (those are mostly covered by my main broker who offers nearly free trades) but at mainly Indian and Hong Kong exchanges, which is why I asked (because it's not going to be every day that I buy stuff from there; probably just once a year or even seldomer).

 

[jacob_]

@submiracle Yes, this is my understanding.

I should say: If you also want to get market data, you need to pay extra - but if you do buy and hold, it should be fine to get the prices from some other website with small time delay (or you only pay for market data snapshots, which cost like a few cents, I think - not sure if available in asia).

 

[submiracle]

@jacob_ Wait they don't even show the purchase price?

 

[jacob_]

@submiracle Not live, but delayed by a few minutes. Still, you get excellent execution, so for liquid stocks you'll get the price. Still I'd always set a limit order.

 

[brinkley25]

@jacob_ Does this only allow trading in the US? Or also EU?

 

[jacob_]

@brinkley25 You can use IB to trade on most major exchanges in the US and worldwide, including NASDAQ, NYSE, London, Paris, Frankfurt etc.

 

[brinkley25]

@jacob_ Thanks. Are there any taxation issue on trading on exchanges outside the eu?

 

[jacob_]

@brinkley25 No. However, if you open the account with a EU address, they won't allow you to trade US ETFs due to the EU MiFiD regulation. It's not that it's illegal for YOU to own such ETFs, but EU regulation forbids for any broker to sell such products to EU retail investors.

In terms of taxes, you need to check the exact rules in your country of residence. It's perfectly legal, but for example in the UK, you should only invest in ETFs that have UK reporting status. Germany adjusted its regulation in 2018 and since then it's no problem anymore (though tax returns require a bit of work).

I don't know all tax laws in Europe...

 

[waheetha]

@jacob_ Yes, however most US ETFs have have their "EU" equivalent, usually having UCITS in their name.

 

[jacob_]

@waheetha That's true and I think that's good for many purposes.

US-ETFs are mostly relevant if you need to pay taxes in the US (as UCITS ETFs are highly problematic under US tax law).

Apart from that US ETFs often have lower fees, but EU ETFs also get cheaper nowadays.

Finally, there are certain areas (such as small cap value), which are only poorly covered by EU ETFs.

 

[nafe]

@jacob_ You can buy US-ETFs through being assigned on puts that you sell.

 

[veryconservative]

@brinkley25 If you hold US stocks/ETFs above 60k you may have to pay an estate tax if you die. Depends on where you live

 

[inkarpathos]

@jacob_ What is this 10k / 2k USD Broker Account Minimum?