Interactive Brokers review

Who Interactive Brokers suits

Interactive Brokers Canada Inc. is the Canadian affiliate of Interactive Brokers Group, and it offers access to 175 markets in 40 countries from one multi-currency account. It suits experienced self-directed investors who trade U.S. or international securities, convert currency regularly or place orders large enough that per-share pricing works in their favour.

It is a weaker match for beginners making small, regular purchases, since every order carries a minimum commission, and for families who need an RESP.

Commissions on stocks and ETFs

Interactive Brokers charges per share. We found only its Fixed and Tiered plans on interactivebrokers.ca, with no $0-commission plan listed for Canada and no commission-free ETF list. ETFs follow the same schedule as stocks. The commission pages carry no effective date, IBKR says it may change rates at any time, and GST or PST applies to eligible services.

• Canadian, Fixed: $0.01 a share, $1.00 minimum and 0.5% of trade value maximum; 100 shares at $25 costs $1.00
• Canadian, Tiered: $0.008 a share for up to 300,000 shares a month, falling to $0.003, plus exchange, clearing and regulatory fees
• U.S., Fixed: US$0.005 a share, US$1.00 minimum and 1% of trade value maximum
• U.S., Tiered: US$0.0035 a share, US$0.35 minimum, plus third-party fees
• Fractional shares: eligible U.S., Canadian and European stocks and ETFs from US$1

Options and account fees

Canadian options cost $1.25 per contract for up to 10,000 contracts a month, with lower rates at higher volumes and a $1.50 minimum per order. U.S. options cost US$0.65 per contract when the premium is US$0.10 or more, falling to US$0.50 and US$0.25 on lower-premium contracts, with a US$1.00 minimum plus exchange and regulatory fees. IBKR doesn’t charge to exercise or assign an option.

There is no account minimum, inactivity fee or custody fee, and no maintenance fee on the RRSP, TFSA or FHSA. You get two free withdrawals each calendar month; after that, an EFT costs $2.00 and a wire $12.00, or US$1.00 by ACH and US$10.00 by wire. Market data subscriptions are extra. We found no transfer-out fee for Canadian accounts on its fee pages, so ask before you move an account.

Currency exchange and cash

You can fund the account and trade in several currencies. RRSP, TFSA and FHSA accounts are limited to Canadian and U.S. dollar cash, conversions between those two only, and withdrawals in Canadian dollars. Spot conversions cost 0.20 basis points of trade value, with tiers down to 0.08 basis points at higher monthly volume and a US$2.00 minimum per order. If IBKR converts automatically during a trade, it typically adjusts the exchange rate by 0.03% instead of charging a commission.

IBKR lists interest of up to 3.38% on U.S. dollar cash above US$10,000 and 1.699% on Canadian cash above $13,000, for accounts with net assets over US$100,000. Rates change, so check the current figures.

Accounts and protection

Interactive Brokers Canada Inc. is a member of the Canadian Investment Regulatory Organization (CIRO) and the Canadian Investor Protection Fund (CIPF). IBKR says certain clients are covered by CIPF, and its RRSP page says RRSPs count as a separate account, eligible for an additional $1 million in coverage, with segregated cash held by the trustee CDIC-insured up to $100,000. CIPF protects you if a member firm becomes insolvent, not against market losses. We found no sign-up promotion. Accounts offered:

• Registered: TFSA, FHSA, RRSP, spousal RRSP and RRIF
• Taxable: non-registered, margin and joint accounts
• Other: trust and small business accounts
• Not offered: RESP, LIRA, LIF and other locked-in plans