The Only Broker You Should Use - Interactive Brokers Review

Interactive brokers might be the new king of the block except they are missing a slight benefit of Robinhood, the free stocks. Other than that they are the only broker you should use because of the other features and benefits in this interactive brokers review. Things like a fully paid lending program to fractional shares, ibkr has everything you could want and their ibkr lite plan is commission free trading.

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0:00 - Intro
0:57 - Commission Rates
1:50 - Features
4:50 - The Platforms

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Welcome back to the channel, I’m Jacob Fisher and today we are talking brokers. Specifically, interactive brokers, who I think most people should use in this post Robinhood era. Interactive Brokers has been around for quite a while, but it wasn’t until recently that they developed a platform for the new investor. With this new development they started with IBKR lite, which offers commission free trades among many other things. Let’s not waste too much time and just get into the review of interactive broker, but make sure you tap the like button and subscribe for future content like this.

They have three options for commission rates. You can either go with tiered or fixed for the paid versions, but more often than not these are for the active traders. If you are paying to trade then generally you have more knowledge about investing and you are looking to get some of the pro features like interactive brokers smart routing. With smart routing you can let IB decide where to route your order or you can decide your personal routing preference.

Let’s move into some of the features of the platform and there are quite a few, but most importantly is the ability to invest with fractional shares. This also means you can enable DRIP, or dividend reinvestment program, to invest back when you get dividends from stocks. With fractional shares you can invest $100 into TSLA rather than having to buy 1 share at 800.

One of the next best features is the low margin rates. If you don’t know what margin is, it essentially allows you to borrow money to invest. A $1000 cash position that goes up 10% would yield you $100, but a $2000 margin position with $1000 cash $1000 margin, would yield you a $200 gain.

Interactive brokers margin rates are some of the lowest in the business at 2.57% for the lite version and anywhere from 1.57% to 0.75% depending on your portfolio balance with the pro version. You can also use their cash management to sort of take a loan against your portfolio at these low rates.

For those advanced traders looking to short stocks, they do have a great short list and an ability to locate shares to short of hard to borrow stocks. For those on the opposite end of the spectrum you can earn extra income by lending out your owned shares of stocks. If you owned 100 shares of a hard to borrow stock then you can earn 50% of the income interactive brokers makes from lending out the stock.

Let’s get into user accessibility and the platforms they have to trade with. They have mobile, desktop and a web version for those looking to just use it on like chrome.

You can also see your impact, which rates your investments based off of your personal values. I’ve set mine to be sustainable and you’d think with stocks like TSLA I’d end up with an A score, but I guess not.

The web version is remarkably similar to the mobile in how it works and feels, but the desktop trader workstation is wildly different. Because I think it’s so different and honestly incredibly difficult to get a hang of if you are starting out, I would suggest most new traders don’t use it.

I chose interactive brokers because it beats out Robinhood’s margin rates and it allows for fractional shares.