Fidelity vs IBKR: Which Broker is Best for You?

Fidelity and IBKR are two of the most popular online brokerages out there, and for good reason. They both offer a wide range of investment products and tools to help you manage your money.

Fidelity has a reputation for being one of the most user-friendly brokerages around, with a well-designed website and mobile app that makes it easy to navigate and get started. The platform is also highly customizable, allowing you to tailor your experience to your specific needs.

IBKR, on the other hand, is known for its low fees and high level of transparency. They offer a range of commission-free trading options, including stocks, ETFs, and options.

Both Fidelity and Interactive Brokers offer $0 account minimums, making it easy to get started with investing.

Fidelity and Interactive Brokers charge $0 for stock/ETF fees, but Interactive Brokers' TWS Lite version charges $0.00, while Fidelity charges $0.

Interactive Brokers offers over 100 order types, including SmartRouting technology, which can be beneficial for advanced traders.

Fidelity's platform is user-friendly and offers a trading simulator, while Interactive Brokers' Trader Workstation (TWS) allows for global trading across 150 markets.

Here's a comparison of the two brokers' fees:

Interactive Brokers' IBKR Mobile app offers additional features, including apps for international and ESG investing, which can be useful for traders with specific needs.

When choosing a brokerage for your IRA, mutual fund selection is a crucial consideration. Both Fidelity and Interactive Brokers offer a wide selection of mutual funds and ETFs.

Fidelity has more than 11,500 mutual funds available, while Interactive Brokers has more than 8,200. This is a significant difference, especially if you have specific fund preferences.

If you're looking for commission-free trades, you'll be happy to know that both brokerages offer this option. Fidelity has 91 commission-free ETFs, while Interactive Brokers has 41.

Broaden your view: Mutual Fund Only Account

IRA fees can be a sneaky way for financial institutions to make extra money from your account. Fidelity is one of the few institutions that doesn't charge maintenance or inactivity fees.

On a similar theme: Fidelity Rollover Ira Fees

Interactive Brokers, on the other hand, charges an inactivity fee if your account doesn't meet minimum activity requirements. This can happen if you don't generate at least $10 in commissions in a given month.

If you're an Interactive Brokers customer, you can avoid this fee by keeping a balance of more than $100,000 or by spending more than $10 in commissions each month.

For another approach, see: T Bill Ibkr

When choosing a mutual fund for your IRA, you have a wide selection of options available. Fidelity and Interactive Brokers offer an impressive selection of funds, with over 11,500 and 8,200 mutual funds, respectively.

Both brokerages have a large number of no-load, no-transaction-fee mutual funds, with Fidelity offering over 3,600 and Interactive Brokers offering more than 2,900.

If you're loyal to a particular fund sponsor, check to see if they're on the list of commission-free funds offered by your chosen brokerage. Many funds have close substitutes that can be used to take advantage of commission-free trades without sacrificing investment results.

On a similar theme: Fidelity Commission Free Etfs

Here's a comparison of the commission-free ETFs offered by Fidelity and Interactive Brokers:

Keep in mind that while commission-free trades are a great perk, other fees, such as expense ratios for mutual funds and margin interest rates, may still apply.

Fidelity doesn't require a minimum deposit to open an IRA, giving you the flexibility to start with any amount you like.

If you're looking to open an IRA with Interactive Brokers, be prepared for a $5,000 minimum deposit requirement.

Investors who are just getting started might prefer a no- or low-minimum IRA account, and Fidelity's policy is definitely a plus in this regard.

The $5,000 minimum deposit requirement at Interactive Brokers may be limiting for some investors, especially those who are just starting out.

Check this out: Savings vs Time Deposit

Interactive Brokers offers over 100 order types and advanced SmartRouting technology for optimal execution.

Fidelity's trading simulator allows traders to test strategies with virtual currency, which is particularly beneficial for refining trading techniques.

Interactive Brokers' Trader Workstation (TWS) allows investors to trade globally across 150 markets, offering access to multiple asset classes, including stocks, options, futures, and cryptocurrencies.

Both Fidelity and Interactive Brokers offer robust research tools, including the ability to view analysts' upgrades and downgrades, read research on thousands of stocks from third-party providers, and scan stocks and funds based on quantitative screening tools.

Fidelity's Planning & Guidance Center makes it easy to see how you're progressing toward your goals with a Retirement Preparedness Measure (out of 100) to score your progress, while Interactive Brokers' Mutual Fund and ETF Replicator helps find lower-cost funds with similar historical performance.

Interactive Brokers' mobile app, IBKR Mobile, includes additional apps for international and ESG investing, providing a tailored experience for specific trading needs.

Here are some key features of each broker:

Interactive Brokers excels with over 100 order types, giving you a wide range of options to execute your trades. This is particularly beneficial for active traders who need to make quick decisions.

Fidelity's trading simulator allows traders to test strategies with virtual currency, which is especially helpful for refining trading techniques.

Interactive Brokers' SmartRouting technology ensures optimal execution for your trades. This means that your trades are executed quickly and at the best possible price.

Here's a comparison of the order types and technology offered by Interactive Brokers and Fidelity:

Fidelity's trading simulator is a valuable tool for traders, allowing them to test strategies without risking real money.

Interactive Brokers' mobile app, IBKR Mobile, includes additional apps for international and ESG investing, providing a tailored experience for specific trading needs.

Fidelity provides a user-friendly platform supporting real-time data, customizable charts, and advanced order management tools.

Interactive Brokers offers a more comprehensive stock trading app with capabilities for international trading and ESG investing, along with real-time data and advanced trading tools.

Fidelity's mobile app mirrors the desktop functionalities, making it convenient for traders on the go.

Here's a comparison of the usability features of Fidelity and Interactive Brokers:

Overall, both Fidelity and Interactive Brokers offer user-friendly platforms with advanced features, but Interactive Brokers' app has a slight edge with its capabilities for international trading and ESG investing.

Fidelity offers portfolio analysis services for anyone, even people who do not use Fidelity to trade.

This service allows clients to see a breakdown of their assets and view their account balance and internal rate of return in real-time.

Interactive Brokers also offers a full portfolio analysis service for clients, which includes the ability to view their assets and compare their portfolio to 200 global benchmarks.

The Portfolio Checker tool breaks down ETFs and mutual funds for further understanding.

Portfolio analysis is a process that assesses a portfolio and calculates how to minimize risk and maximize return.

For buyers looking to get into hot stocks, this can be a valuable and crucial service.

Interactive Brokers' portfolio analysis service is more comprehensive than Fidelity's, providing a more detailed breakdown of a client's portfolio.

This can be particularly useful for investors who want to make informed decisions about their portfolio.

Both Fidelity and Interactive Brokers support real-time data, ensuring that clients have access to the most up-to-date information about their portfolio.

Curious to learn more? Check out: Fidelity Portfolio Managers

Leverage can be a powerful tool for investors, allowing them to potentially enhance their returns or manage risk.

Fidelity and Interactive Brokers both offer margin accounts, which enable investors to borrow funds to leverage their investments.

Fidelity provides leverage up to 2:1 for stocks, meaning investors can borrow up to twice the value of their account balance to trade stocks.

For options, Fidelity offers leverage up to 4:1. Interactive Brokers offers leverage up to 4:1 for stocks and 2.5:1 for options.

It's essential to understand that leverage can amplify potential gains, but it also increases the risk of losses.

Fidelity doesn't require a minimum deposit, making it a great option for investors with varying capital levels.

This is particularly beneficial for new investors or those with limited initial capital who want to start investing with smaller amounts.

Interactive Brokers requires a minimum deposit of $5,000 to open an IRA, which may be limiting for investors who are just getting started.

Suggestion: Minimum to Trade Futures Ibkr

Fidelity's lack of minimum deposit requirement makes it a more accessible option for a wider range of investors.

Interactive Brokers requires a minimum deposit of $0 for US clients and $10,000 for non-US clients, posing a challenge for investors with limited funds.

This minimum deposit requirement may prevent some investors from opening an account with Interactive Brokers.

A different take: Difference between Deposit and Custodial Account

Both Fidelity and Interactive Brokers offer flexible options for withdrawals and deposits, ensuring convenience for investors.

Fidelity provides free withdrawals via ACH transfer, allowing investors to easily access their funds without incurring any additional fees. This option is available to all investors.

Interactive Brokers also accepts check deposits by mail or in person at its branches, offering a similar option for investors. This feature is a great alternative for those who prefer to deposit funds in person.

Fidelity sets itself apart by accepting check deposits by mail or in person at its branches, providing investors with an additional method to withdraw funds. This option is convenient for those who need to deposit funds quickly.

Interactive Brokers goes the extra mile by facilitating wire transfers, allowing for faster and more secure deposits into your account.

Tax analysis tools are a must-have for clients who trade frequently, as they help manage stock gains and losses for taxes.

Most online trading platforms offer tax analysis tools, but Fidelity lacks this service at the time of writing.

Interactive Brokers offers a tool called Tax Optimizer, which is a vital service for experienced clients who want to diversify their portfolios.

This tool helps manage gains and losses for taxes, making it a crucial feature for clients who need to optimize their tax strategy.

Interactive Brokers comes out on top in this section, as most major platforms offer tax analysis tools, leaving Fidelity at a disadvantage.

Additional reading: Taxes on Dividends vs Interest

If you're looking for a broker with a wide range of investment options, Fidelity is the way to go. They offer a vast selection of investment products, including stocks, options, futures, and cryptocurrencies.

Fidelity's advanced online platform is also a major plus, allowing you to trade and manage your investments with ease. Their competitive pricing and educational resources are also worth mentioning.

Broaden your view: Fidelity Investment Account Types

Here are the pros of Fidelity:

On the other hand, Interactive Brokers excels in providing advanced trading tools and access to global markets. Their competitive pricing, with low commissions and spreads, makes them a great choice for traders.

Interactive Brokers also offers direct market access for efficient order execution and robust research and analysis tools. Their professional trading platform with customizable features and real-time market data is a major advantage.

Here are the pros of Interactive Brokers: