An overview of Interactive Brokers for European index fund investors

Interactive Brokers (a.k.a IB) is one of the popular brokers which are available to investors in multiple European countries. Along with DEGIRO, Interactive Brokers is one of the Brokers you may consider to transact index funds (ETFs) whenever there aren’t better local alternatives.

My goal with this article is to use the framework I shared earlier on “How to choose a stock broker” to understand Interactive Brokers.

The approach I will take is similar to the one I took in an earlier article in which I reviewed DeGiro. This isn’t a review of Interactive Brokers but rather an overview of the things you should consider if you plan to use it.

Note that the information in this article may only be valid at the time of writing (21/05/2019). I am trying to do a thorough walkthrough so you can understand similar steps you should undertake in evaluating any broker (including Interactive Brokers) but that also means that many things explained here will change.

Disclaimer: I am not an Interactive Brokers customer. This is not an endorsement of Interactive Brokers. This article is not supported by Interactive Brokers in any shape or form.


Interactive Brokers is one of the players with the lowest fees on the market.

Below you will find an overview of relevant fees for index fund investors. If you have a distinct use for IB you may have to look at the additional fees detailed in their pricing pages.

Transaction fees

There are two types of pricing structures for transactions: tiered, fixed.

In the Fixed Pricing Structure, investors pay a fixed broker commission irrespective of the transaction size. This commission already includes any exchange or regulatory fees. The specific commission varies depending on the stock exchange. For example, the commission for the Euronext Amsterdam stock exchange (EAM) is: 0.1% of trade volume; 4€ minimum.

200 shares of an ETF with 100€ share price (20,000 €)
Fee = 20000€ * 0.1% = 20€

10 shares of an ETF with 100€ share price (1000 €)
Fee = 4€ (minimum)

If you are transacting ETFs at a different exchange, you will need to check the transaction fees on the IB website. Note that the fees are broken down per country. The country refers to the country of the stock exchange and not the country of the investor.

In the Tiered Pricing Structure, investors pay a lower broker commission as their trade volume increases. The image below from Interactive Brokers’ pricing pages shows how the commission decreases with larger trading volumes from 0.05% to 0.015%.

Broker Fees for Tiered Pricing Structure (source: Interactive Brokers)

In the Tiered Pricing Structure the exchange and regulatory fees (i.e. external fees) are charged separately while on the fixed pricing these surcharges are part of the (0.1%) commission.

Different exchanges will charge different fees and you can find more details in IB’s website. The fees are broken down by the country of the exchange.

Below is a screenshot of the external fees for stock exchanges based in the Netherlands. A different stock exchange/country might have different fees depending on the specific trading market used. The acronyms (e.g. AEB, CHIX) might look confusing at first sight but they stand for the trading markets where stocks/ETFs can be listed. You can find the list of markets where ETFs can be listed in Europe on IB’s website.

Trading Markets External Fees Netherlands (source: Interactive Bokers)

This example shows how the Tier Pricing Structure works in practice:
AEB (i.e. Euronext Amsterdam)
200 shares of an ETF with 100€ share price (20,000 €)

IB Commission = 20,000 € * 0.05% = 5 €
ETF Exchange fee = 20,000 € * 0.006% = 1.2 €
Clearing fee = 0.1 €
Total fees = 5 € + 1.2 € + 0.1 € = 6.3 €

For the earlier example, the Tier Pricing Structure leads to lower fees (6.3 €) than the Fixed Pricing Structure (20 €). You will have to check your specific situation in order to understand which pricing structure is more appropriate.

If you are using the Tiered Pricing Structure, in the event that IB receives a rebate it may pass those savings to the investor.

This blog post from The Poor Swiss does a deep dive into Interactive Brokers Tiered Pricing.

Maintenance fees

Interactive Brokers does not have maintenance fees.

Other fees

IB provides 1 free withdrawal month. Additional withdrawals cost 8 EUR.

Deposits are free.

Dividend processing is free.

These fees are specified in a separate page on Interactive Brokers’ website.


Interactive Brokers has multiple legal entities throughout the world. Residents in the UK are serviced by the entity in the USA (IB LLC) and the entity in the UK (IBUK). Residents in the EU may be serviced by the entity in Ireland (IBIE), the entity in Luxembourg (IBLUX), or the entity in Hungary (IBCE).

That means that IB likely won’t take care of any tax related paperwork that is specific to your country, unlike what a local broker would do. This also means that IB likely won’t do any tax withholding, you will also have to take care yourself.

It is important to understand which kind of tax bureaucracy you will have to deal with due to IB and evaluate if it is worth the low fees. In some countries the paperwork will be simple, in others it will be more complex. Tax laws vary from country to country so you will have to do your own research.

Account types and limits

Interactive Brokers has account structures destined for individual investors as well as institutions. Individual accounts may be created for single account holder or for two account holders (i.e. joint accounts).

For the purposes of investing in ETFs there is a single type of account: the Cash Account – the account without support for margin trading.

More information about accounts in IB can be found on its website.

All Interactive Brokers’ entities that manage client assets are regulated by the local jurisdiction:

  • US Securities and Exchanges Commission regulates IB LLC
  • The Central Bank of Ireland regulates IBIE
  • The Luxembourg Financial Sector Supervisory Commission regulates IBLUX
  • The Central Bank of Hungary regulates IBCE.
  • The Financial Conduct Authority regulates IBUK

Interactive Brokers segregates client money and securities into accounts separate from the IB business accounts. This allows the customer’s assets to not be affected in the event of default or bankruptcy of IB.

Interactive Brokers is a publicly traded company.

More details about IB’s strength and security can be found on its website.

The investment compensation limit in the event of failure varies depending on the country of the legal entity:

  • €20,000 for IBLUX
  • €20,000 for IBIE
  • €100,000 for IBCE
  • £50,000 for IBUK
  • $500,000 for IB LLC

Available ETFs and Stock Exchanges

Interactive Brokers trades on most (if not all) major European exchanges. My assumption is that IB provides access to most if not all of the (European domiciled) ETFs shown on justETF.

Additionally you may be able to transact US domiciled ETFs if you live in an European jurisdiction which supports them.

Holding client money

Interactive Brokers holds client money in segregated bank accounts and may invest part of it in U.S. Treasury securities.

Foreign currency support

An investor’s account has a Base Currency which is used for accounting purposes.

An investor may hold account balances in multiple currencies (base and non-base). Interactive Brokers does not automatically convert non-base currency balances into the base currency.

You can easily (and cheaply) convert between currencies in Interactive Brokers.

Service level

Interactive Brokers offers a wide range of services. You can use it to execute your own ETF transactions cheaply without much help. You can alternatively use its actively managed services.

Customer support

I found Interactive Brokers’ website to be clear and comprehensive. I found it a bit hard to navigate at times but I could always find the answer on the IB website after searching on Google.

I’ve also read reports of folks saying that IB’s customer support replies in a reasonable amount of time and with clear/helpful answers.


Interactive Brokers is a very reputable broker for a few reasons:

  • It is a publicly traded company and its financial statements are made public.
  • It takes extra measures in regards to compliance and investor protection as detailed in its website.
  • It is the largest electronic brokerage in the U.S.

My understanding is that the general opinion of interactive Brokers in popular European personal finance forums is very positive:


Interactive Brokers has Android and iOS mobile apps.

A few people claim that Interactive Brokers’ interface is a bit complicated for beginners.

If you are looking for a great introduction to Interactive Brokers, I can’t recommend Mr. Rip’s blog post enough.

Disclaimer: This information is for educational and entertainment purposes only. This does not represent, in any case, specific investment, legal nor tax advice nor recommendations to purchase a particular financial product. Learn more at