U.S. markets closed
  • S&P 500

    4,136.48
    -43.28 (-1.04%)
     
  • Dow 30

    33,926.01
    -127.93 (-0.38%)
     
  • Nasdaq

    12,006.96
    -193.86 (-1.59%)
     
  • Russell 2000

    1,985.53
    -15.69 (-0.78%)
     
  • Crude Oil

    73.23
    -2.65 (-3.49%)
     
  • Gold

    1,865.90
    -50.40 (-2.63%)
     
  • Silver

    22.40
    -1.22 (-5.17%)
     
  • EUR/USD

    1.0798
    -0.0113 (-1.04%)
     
  • 10-Yr Bond

    3.5320
    +0.1360 (+4.00%)
     
  • GBP/USD

    1.2056
    -0.0173 (-1.41%)
     
  • USD/JPY

    131.1500
    +2.5460 (+1.98%)
     
  • BTC-USD

    23,382.52
    +82.26 (+0.35%)
     
  • CMC Crypto 200

    535.42
    -1.43 (-0.27%)
     
  • FTSE 100

    7,901.80
    +81.64 (+1.04%)
     
  • Nikkei 225

    27,509.46
    +107.41 (+0.39%)
     

Fidelity vs. Interactive Brokers: Which Can Save Me More Money?

SmartAsset: Fidelity vs. Interactive Brokers
SmartAsset: Fidelity vs. Interactive Brokers

Fidelity and Interactive Brokers are both online brokerage services. Fidelity, based in Boston, is one of the biggest names in the financial services industry. The company has many divisions focused on different financial services, including mutual funds, retirement plans and commercial banking. Interactive Brokers, on the other hand, is based in Greenwich, Connecticut. It started as a market maker and is now the biggest electronic tracking platform in the U.S. based on daily average revenue trades.

For the retail investor looking to execute trades and start building portfolios, both offer positives and negatives to consider. Interactive Brokers is a public company listed on the Nasdaq, while Fidelity is privately held. For more personalized help, consider working with a financial advisor.

Fidelity vs. Interactive Brokers: An Overview

Both Fidelity and Interactive brokers offer a trading platform for retail investors to buy and sell securities. Both platforms have myriad tools available for users to analyze their portfolios and make choices about how they want to develop their investment strategy.

Fidelity is a big firm with various other branches brokerage clients can take advantage of. For instance, there are banking options, so you can have all of the money you plan to invest already in the Fidelity system before you invest it. Interactive Brokers, on the other hand, is a pure brokerage firm, without other arms. Fidelity also has its own suite of investment products you can choose from, including mutual funds and exchange-traded funds (ETFs). Interactive Brokers does not offer its own investment products; it is purely a platform.

Fidelity vs. Interactive Brokers: Fees Interactive Brokers and Fidelity Fees Fee Type Interactive Brokers Fidelity Investment Fees

  • Stocks & ETFs: $0-$0.35

  • Mutual funds: $0 (Up to $14.95 for TF mutual funds)

  • Options: $0 commission and $0.15 to $0.65

  • Futures: $0.25 to $0.85 per contract

  • Bonds: 1% of fave value

  • Stocks & ETFs: $0

  • Mutual funds: $0 ($49.95 for TF mutual funds)

  • Options: $0 commission and $0.65 contract fee

  • New issue bonds: $0

  • Secondary market bonds: $1 and $19.95 broker-assisted fee

  • CDs/U.S. Treasury securities traded online: $0

Account Fees

  • Account fee: $0

  • Wire transfer fee: $10

  • Account fee: $0

  • Domestic wire transfer fee: $0

  • Foreign exchange wire transfer fee: Up to 3% of principal

  • Foreign securities transactions: $50

Fees are an important part of choosing a brokerage platform. If you don’t pay attention to the fees you’re paying, you could end up spending much more than you need, eating into the profits you’re hoping to make through your investments.

Fidelity offers no commission trades for stocks, bonds and most mutual funds. The price for trades at Interactive Brokers depends on if you are using the free lite version of the product or the Pro version, which comes with more features. Trades of stocks and ETFs are free with the lite version and between $0.05 and $0.35 with the pro version. Bond transactions cost 0.1% of the face value of the order. Some mutual funds have no fee. At both Fidelity and Interactive Brokers, some mutual funds do come with a fee — $20 for Fidelity and 3% of the trade value (with a cap of $14.95) at Interactive Brokers.

Options at Fidelity have no commission and a $1 contract fee. The price runs between $0.15 and $0.65 at Interactive Brokers.

Fidelity vs. Interactive Brokers: Features

SmartAsset: Fidelity vs. Interactive Brokers
SmartAsset: Fidelity vs. Interactive Brokers

Both of these firms offer access to myriad investment vehicles, including thousands of mutual funds and ETFs. Both have no-fee funds available. You can also use either platform to trade stocks and bonds, and both have extensive cryptocurrency investing services — Fidelity even has a presence in the Metaverse, if that interests you.

Both firms also offer robo-advisor services and portfolio management software. Neither service requires a minimum account size.

Fidelity, unlike Interactive Brokers, does have brick and mortar locations for those who use banking service. This can also be used by users of Fidelity Go, the robo-advisor service the firm operates.

Fidelity vs. Interactive Brokers: Advisor Services

Fidelity has an extensive network of financial advisors potential clients can choose to work with. The minimum asset level is $50,000, which is relatively low in the world of financial advisors. There are also digital advisory services available with a minimum of $25,000, and private wealth management services for more wealthy clients, with a minimum of $2 million in investable assets.

Interactive Brokers does not have an advisory business, but does offer digital advice with themed portfolios — and a minimum of just $100.

Fidelity vs. Interactive Brokers: Online and Mobile Experience

In this day and age, it is practically a requirement for a financial services company to give customers a robust suite of tools and programs to use both online and on their phones. Both of these companies deliver in this regard.

Fidelity has a very complex set of desktop tools. This can be a bit overwhelming for a novice investor, but if you have a bit more experience, you’ll likely find them very useful.

Interactive Brokers has two available desktop platforms: IBKR Lite and IBKR Pro. The Lite version is more basic and is intended for less experienced investors who don’t frequently make trades. The Pro version is designed for investors with a lot of experience who are frequently making transactions and need more sophisticated tools.

Fidelity has a mobile app which gets 4.8 out of five starts in the iPhone app store. Interactive Broker’s app only gets 3 stars in the app store.

Who Should Use Fidelity?

Fidelity allows investors to buy and sell stocks, bonds, mutual funds and other equities, all while using an impressive suite of tools and programs.

Most investors, from beginners to seasoned pros will be happy with Fidelity. It will appeal especially to those who want to get all of their financial services from one company, as Fidelity also has advisory and banking services available, in addition to offering its own extensive lineup of funds.

Prices are low at Fidelity, so anyone looking for investing that won’t break the bank with fees should find it acceptable.

There are many options available, but most any investor would be happy with Fidelity.

Who Should Use Interactive Brokers?

SmartAsset: Fidelity vs. Interactive Brokers
SmartAsset: Fidelity vs. Interactive Brokers

Interactive Brokers is a good option for anyone looking for a simple, low-cost brokerage platform. You can buy and sell just about any security you want. If you have a particular interest in cryptocurrency, the platform does have tools for that.

Interactive Brokers is particularly suited for those who are looking for just a brokerage platform, not a more full-service financial services institution. That said, there is a robo-advisor service available, if that is interesting.

Generally, anyone who is somewhat comfortable with investing will be happy with the services provided at Interactive Brokers.

Bottom Line

Fidelity and Interactive Brokers are both strong options for retail investors looking for an online brokerage. Fidelity is part of an expansive financial services company offering services including banking and advising, while Interactive Brokers focuses mostly on brokerage services. Both do offer a robo-advisor product, so if you’re looking for just a little help, they are there for you.

Investing Tips

  • If you want a bit more help, consider working with a financial advisor. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

  • Want to see what your investment will look like down the road? Use SmartAsset’s free investing calculator to get a sense.

Photo credit: ©iStock.com/tdub303, ©iStock.com/damircudic, ©iStock.com/Delmaine Donson

The post Fidelity vs. Interactive Brokers appeared first on SmartAsset Blog.