Investing is important, but choosing where to invest isn’t easy. I recently experienced this firsthand as I looked for a new broker. For years, I’d been using Vanguard for index fund investing and Charles Schwab for individual stocks. While that worked, I wasn’t entirely happy with either one, and I wanted to bring my whole portfolio under one roof.
After lots of research, I opened an account with Interactive Brokers. Here’s why I felt it was the right choice for me.
1. It has plenty of features and investment offerings
I wanted a broker that could meet all my investing needs, now and in the future. Many brokers are missing certain types of investment products, such as mutual funds, bonds, or futures. Even though I mainly stick to simple, buy-and-hold investing, I like being able to invest in anything I want.
Interactive Brokers is pretty much as good as it gets in this regard. It has a long list of investment offerings, including:
- Stocks
- Bonds
- ETFs and mutual funds
- Options
- Futures
- Cryptocurrency
It also has an impressive trading platform with detailed stock information and a quality mobile investing app. Now, it’s worth mentioning that Interactive Brokers is on the advanced side. There are more beginner-friendly brokers available.
But if your priority is a feature-packed broker, Interactive Brokers is an excellent choice. That was a big part of why I chose it. I’d rather sign up for a broker that has more than what I need than one that has less.
2. It has a large bonus offer
Many stock brokers offer bonuses for new clients. How it normally works is you earn a certain amount of bonus cash based on the amount of money you bring over.
Since I planned to transfer over my entire portfolio, a big bonus was another feature I wanted. Interactive Brokers currently has a referral bonus where both the referrer and the person they refer can earn a bonus.
For the person who receives the referral, the bonus is $1 in IBKR shares for every $100 added to the account. If you deposit and transfer over a total of $50,000, you’ll earn $500 in IBKR shares. The bonus limit is $1,000 in IBKR shares for adding $100,000 to an account. You need to maintain your average balance for one year for bonus shares to invest and become available.
I checked out a lot of brokerage bonuses, and this one was my favorite. There are other brokers with bonuses of $1,000 or more, but they require you to bring over much more money. My bonus shares were also added to my account quickly. I still need to wait for them to vest, but that’s no problem. I’m planning to use this account for the foreseeable future.
3. It charges low margin rates
Interactive Brokers has some of the lowest margin rates I’ve seen. Right now, its rates are more than 5% lower than what several major brokers charge. There are two ways you could use margin with Interactive Brokers:
- To increase your buying power on investments
- To get a low-interest loan backed by your investment portfolio
A word of warning: Margin is a high-risk investing strategy. If you’re not an advanced investor, you’re better off avoiding it entirely. Even if you’re knowledgeable about how it works, you still might not want to use it — you’ll be paying interest on what you borrow and taking on much more risk.
I don’t use margin, and I don’t have any plans to in the immediate future. But I haven’t ruled it out completely, either. I also like having the flexibility to get a low-interest loan if I ever need one. Interactive Brokers’ margin rates weren’t the main factor in why I chose it, but they were another point in its favor.
Interactive Brokers has a lot to offer. Those three reasons are far from an exhaustive list of its benefits. They’re what convinced me that Interactive Brokers was the best stock broker for my needs.
If you’re new to investing, you may want to go with a broker that’s easier to use. But if you have some experience, Interactive Brokers is worth checking out. That’s especially true if you’re looking for a broker with plenty of features, a generous welcome bonus, or some of the lowest margin rates.
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