eToro Vs Interactive Brokers In 2023 [Fight For Supremacy]
With the advent of new technologies and the booming stock markets, investors are looking to make wise decisions and find the best broker for their needs. eToro and Interactive Brokers have risen to the top of the ranks when it comes to offering traders a wide array of tools and features to facilitate smart trades in November 2023.
This blog post is all about comparing both brokers based on their fees, commissions, platform features, and much more. By taking an in-depth look at eToro vs Interactive Brokers, investors can choose which broker is right for them and get ready to make some profitable investments in 2023!
We'll go over all the important details you need to know so that you can make an educated decision on who's best suited for your trading goals.
eToro is a social trading and multi-asset brokerage website where people can trade and invest in stocks, cryptocurrencies, commodities, ETFs, and more. Since it started in 2007, the platform has grown to be one of the most popular trading platforms in the world, with millions of users registered in over 100 countries.
eToro has become well-known because it is easy to use and has features like social trading and copy trading. Social trading lets users watch and copy the trades of other successful traders on the site, and copy trading lets users automatically make the same trades as those traders. This makes trading easier for people who have never done it before and helps traders make better decisions.
eToro is known for putting a lot of focus on trading cryptocurrencies like Bitcoin, Ethereum, and many others. This lets users trade and invest in a wide range of cryptocurrencies. Users can also use webinars, trading courses, and market research to learn more about trading and investing.
About Interactive Brokers
Interactive Brokers is a well-known online brokerage firm that sells stocks, options, futures, forex, bonds, and ETFs, among other financial products and services. Since it started in 1978, the company has grown to become one of the biggest electronic trading platforms in the world, with offices in many countries.
Interactive Brokers is known for its advanced trading platforms and tools that are made for traders and investors with a lot of experience. The platform has a wide range of trading tools and resources, such as advanced charting and technical analysis tools, algorithmic trading options, and a number of order types that can be changed to suit your needs.
Low commissions and fees are one of the best things about Interactive Brokers. The platform is a popular choice among active traders and investors because it has reasonable prices and a clear fee structure. The platform has many options for retirement accounts, in addition to individual, joint, and business accounts.
Interactive Brokers also has a lot of tools and resources to help people learn, like webinars, video tutorials, and research reports. The platform has a demo account that lets users practice trading with fake money before putting real money at risk. Interactive Brokers is a popular choice for experienced traders and investors who need high-tech trading tools and low fees.
eToro Vs Interactive Brokers In Terms Of Security
In terms of security, both eToro and Interactive Brokers have taken precautions to safeguard their clients' investments. In terms of security, here is a comparison of the two brokers:
The FCA, CySEC, and ASIC regulate eToro, while Interactive Brokers is regulated by FINRA, SIPC, SEC, CFTC, IIROC, FCA, CBI, AFSL, SFC, SEBI, MAS, and MNB. This means that both brokers are overseen by multiple regulatory bodies, ensuring that they follow regulations and operate in an open and transparent manner.
Investor Compensation Scheme:
eToro provides up to €20,000 in compensation to clients of eToro (Europe) Ltd and up to £85,000 in compensation to clients of eToro (UK) Ltd. Interactive Brokers, on the other hand, offers up to £85,000 for clients under IB U.K.
Limited and up to €20,000 for clients under IB Ireland Limited. This means that both brokers offer compensation in the event of insolvency or bankruptcy, providing their clients with a safety net in the event of unforeseen events.
eToro Vs Interactive Brokers In Terms Of Fees
Here is a breakdown of eToro vs Interactive Brokers in terms of fees for various types of trades:
- eToro: $0
- Interactive Brokers: Tiered plan - $0.0035 per share (minimum $0.35, maximum 1% of trade value)
- eToro: $0
- Interactive Brokers: Tiered plan - 0.05% of trade value (minimum €1.25, maximum €29)
- eToro: $0* (*not all ETFs are offered with 0% commissions)
- Interactive Brokers: Tiered plan - 0.05% of trade value (minimum €1.25, maximum €99)
- eToro: 1% spread on either side of a crypto trade
- Interactive Brokers: Up to 0.18% of the trade value (only in the US)
- eToro: $0
- Interactive Brokers: €/$/£0
- eToro: $5 (minimum withdrawal amount is $30)
- Interactive Brokers: €/$/£0
Currency conversion fee:
- eToro: Starts from 0.50%
- Interactive Brokers: 0.0020%
Overall, eToro charges less than Interactive Brokers for US and EU stocks, ETFs, and custody fees. However, Interactive Brokers may be less expensive for cryptocurrency trades because there are no withdrawal fees.
When it comes to currency conversion fees, Interactive Brokers is less expensive than eToro. It's important to remember that not all ETFs are available on eToro with no commission and that Interactive Brokers' tiered plan for US stocks may be more expensive for larger trades.
eToro Vs Interactive Brokers In Terms Of Trading Options
Here we provide a side-by-side comparison of where trading options are outlined and accessible in eToro and Interactive Brokers:
- Stocks: eToro offers stock trading, but Interactive Brokers does not.
- ETFs: eToro offers ETFs trading, but Interactive Brokers does not.
- Bonds: eToro does not offer bond trading, but Interactive Brokers does.
- Funds: eToro does not offer fund trading, but Interactive Brokers does.
- Futures: eToro does not offer futures trading, but Interactive Brokers does.
- CFDs: Both eToro and Interactive Brokers offer CFDs trading.
- Leverage Products: Both eToro and Interactive Brokers offer leverage product trading.
- Forex: Both eToro and Interactive Brokers offer Forex trading.
- Cryptocurrencies: Both eToro and Interactive Brokers offer cryptocurrency trading.
Pros And Cons Of eToro
While eToro is a great choice for many investors, it may not be suitable for everyone. Here is a quick summary of the pros and cons:
Commission-free trading of stocks
Commission-free stock trading is provided by eToro, allowing users to trade without incurring additional costs. This is advantageous as it enables traders to save money.
Social Trading and other unique offerings
eToro provides social trading, copy trading, and other innovative products that enable traders to learn from each other and capitalize on the intelligence of the crowd. This fosters a sense of community among traders, which can be a motivating factor for newcomers.
A diverse array of financial products
eToro offers an extensive selection of financial products, including stocks, cryptocurrencies, commodities, and indices. This provides numerous opportunities for traders to diversify their portfolios.
Ease, contemporary, and simple to use:
The sleek and contemporary design of the eToro platform makes it accessible to traders of all levels of experience. The platform's intuitive and user-friendly user interface makes it easy for beginners to navigate.
eToro is governed by the most prestigious financial regulators, including the FCA, ASIC, and CySEC. This ensures the security of the platform and traders' funds.
Few finance details:
The financial information provided by eToro may be insufficient for some traders to make informed decisions. This can be a disadvantage for experienced traders who need more comprehensive financial information to make informed decisions.
Inactivity and withdrawal fees:
Withdrawal and inactivity fees are charged by eToro, which can be burdensome for traders who use the platform infrequently.
Spread, overnight, inactivity, and higher-than-average currency conversion fees:
eToro's spread, overnight, inactivity, and currency conversion fees are above average. This can be a disadvantage for traders who prefer a fee structure with lower fees and are cost-conscious.
Currency conversion fees apply to non-USD deposits:
eToro offers only a single currency account (USD), so traders who deposit funds in a different currency incur currency conversion fees. This can be a disadvantage for merchants who prefer to transact in their native currency.
No bonds, futures, or options:
eToro does not offer bonds, futures, and options, which is a disadvantage for traders interested in trading these financial products. This can reduce the diversification of the portfolio.
Pros And Cons Of Interactive Brokers
Also, Interactive Brokers may not be suitable for everyone. Here is a quick summary of the pros and cons:
Low US stock trading fees (for EUR-based accounts):
Interactive Brokers offers EUR-based traders low US stock trading commissions.
No monthly inactivity fee:
Interactive Brokers does not charge a monthly inactivity fee, which benefits infrequent traders.
The most products and markets in brokerage:
Diversifying traders can use Interactive Brokers' wide range of financial products and markets.
Beginners can practice trading with Interactive Brokers' demo account.
Since 1978, Interactive Brokers has had a stellar brokerage reputation. It makes the platform trustworthy.
Comprehensive education and research:
Interactive Brokers' research and education tools, including webinars and tutorials, are ideal for traders who want to improve.
IBKR GlobalTrader's modern mobile trading app:
IBKR GlobalTrader, Interactive Brokers' mobile trading app, is perfect for novice investors who like to trade on the go.
Burdensome account opening:
The account opening procedure at Interactive Brokers is complicated and time-consuming, which may deter some traders. However, the entire procedure is conducted online, which is convenient.
Beginners' learning curve steeper:
Due to the complexity of its platform and the vast array of financial products and markets it provides, Interactive Brokers may have a steeper learning curve for novices.
The website is confusing:
Some users may find it difficult to navigate the Interactive Brokers website, which may hinder their trading experience.
The robo-advisor feature is only for US customers:
Interactive Advisors, a robo-advisor feature provided by Interactive Brokers, is only available to US clients, which is a disadvantage for traders based outside the US who wish to use this feature.
FAQ About eToro And Interactive Brokers
Which platform is better for beginners, eToro or Interactive Brokers?
eToro is more suitable for beginners, as it offers a simple platform with no minimum deposit and low fees. Interactive Brokers is better for experienced traders due to its vast range of financial products and markets.
What are the fees and commissions for trading on eToro and Interactive Brokers?
eToro charges spreads, inactivity fees, and higher-than-average currency conversion fees. Interactive Brokers has low US stock trading commissions and does not charge a monthly inactivity fee. However, currency conversion fees apply to non-USD deposits.
How does eToro's social trading feature compare to Interactive Brokers' offerings?
eToro offers a comprehensive social trading platform, while Interactive Brokers does not offer any such features. However, IBKR GlobalTrader, Interactive Brokers' mobile trading app, is excellent for novice investors who want to trade on the go.
Which platform offers a wider range of investment products, eToro or Interactive Brokers?
Interactive Brokers offers a much wider range of products, including stocks, futures, options, bonds, and more. eToro does not offer these products.
What are the minimum deposit requirements for opening an account with eToro and Interactive Brokers?
eToro has no minimum deposit requirement, while Interactive Brokers requires a minimum deposit amount of $10,000. However, this can vary depending on the country and currency you are using to open your account.
Is eToro or Interactive Brokers better for day trading or long-term investing?
Interactive Brokers is better for day trading, as its fees and commissions are lower. eToro is more suitable for long-term investment since it offers features such as copy trading and the ability to invest in social trading portfolios.
Which platform offers better customer support, eToro or Interactive Brokers?
Interactive Brokers offers a wide range of customer support options, including live chat, phone support, and email. eToro also provides customer service in various languages via its online ticketing system. However, IBKR GlobalTrader's in-app support is unparalleled.
eToro's user interface is more intuitive, with an emphasis on user-friendliness. Interactive Brokers' platform is more complex and has a steeper learning curve. The IBKR GlobalTrader mobile app is perfect for novice investors who like to trade on the go.
What are the security measures in place for eToro and Interactive Brokers?
eToro uses 128-bit encryption and two-factor authentication to ensure the safety of user funds. Interactive Brokers also has strong security measures in place, such as encrypted connections and multi-factor authentication for account logins.
How do eToro and Interactive Brokers compare in terms of regulation and compliance?
eToro and Interactive Brokers follow local laws and are highly regulated. The UK Financial Conduct Authority, Cyprus Securities and Exchange Commission, and other European regulators oversee eToro. Interactive Brokers belong to NYSE, Nasdaq, FINRA, and SIPC. SEC, FINRA, and other international regulators oversee it.
eToro and Interactive Brokers are two of the biggest online trading platforms. eToro is more suitable for beginner traders, while Interactive Brokers is better for experienced traders due to its wider range of products and lower trading fees. eToro offers a comprehensive social trading platform, while IBKR GlobalTrader caters to novice investors on the go.
eToro is highly regulated by the UK Financial Conduct Authority, while Interactive Brokers is overseen by SEC and other international regulators. Both platforms offer extensive security measures to protect user funds.
Ultimately, eToro and Interactive Brokers provide different services and fees, so it's important for investors to choose the one that best suits their needs.