Interactive Brokers New Zealand Review – Features, Fees, Pros and Cons Revealed
Interactive Brokers is a well-recognized online trading platform that is active in 33 countries – including New Zeland. The broker offers a substantial library of international shares, as well as more sophisticated asset classes like CFDs, options, futures, and forex.
With that said, the platform is arguably more suited for those of you that have a bit of experience in the online investment space, meaning that newbies might find the broker somewhat difficult to use.
In this Interactive Brokers review, we cover everything you need to know to assess whether or not the platform is right for you. This includes the types of shares you can trade, commissions, account types, payments, and more.
Note: As an established broker with a global audience, Interactive Brokers is available in dozens of countries. As such, all of the figures outlined in this review are based on US dollars.
What is Interactive Brokers?
Interactive Brokers is a highly established brokerage firm that was launched over four decades ago. Although the platform is based in the US, it has a global audience. This means that New Zealand traders can open an account with ease.
Interactive Brokers New Zealand offers a comprehensive number of investment services – most of which are tailored to more experienced traders. This means that you might find the platform somewhat complicated to use if you are just starting out in the world of stocks and shares.
Nevertheless, the broker offers everything from traditional equities, ETFs, funds, forex, CFDs, options, and futures. The general consensus is that Interactive Brokers is one of the cheaper options in the market, which is great if you are looking to keep your investment costs to a minimum.
The platform is also popular for its dedication to fractional ownership, meaning that you are no longer required to buy whole shares. Ultimately, with the Interactive Brokers platform giving you access to over 135 international financial arenas, if a marketplace exists, you’ll likely find it hosted by the broker.
What Shares Does Interactive Brokers New Zealand Allow You To Invest In?
As noted above, one of the main draws of using Interactive Brokers is that you will have access to thousands of shares across heaps of international markets.
- In the case of Asia-Pacific, this includes companies listed on the Australian Stock Exchange, Hong Kong Stock Exchange, Tokyo Stock Exchange, and Singapore Stock Exchange.
- In Europe, this includes dozens of marketplaces – includin1g but not limited to the UK, Germany, France, Italy, and the Netherlands.
- And of course – you will have access to heaps of US exchanges – such as the NASDAQ and NYSE.
For a full list of supported exchanges, be sure to check the Interactive Brokers NZ website.
Although most investors from New Zealand prefer to pick and choose their own stocks, Interactive Brokers also offers pre-packaged portfolios. With so many options on the table, you can choose a portfolio that meets your appetite for risk. For example, if you want to play it safe, there are several portfolios that focus exclusively on solid, blue-chip stocks.
At the other end of the spectrum, there are portfolios that concentrate on high-growth stocks and even the emerging markets. Ultimately, by opting for a pre-packaged portfolio, you can remove the need to spend countless hours pondering over which stocks to invest in. On the contrary, once you inject money into your chosen portfolio, Interactive Brokers takes care of the rest.
Outside of the traditional stocks and shares space, Interactive Brokers also doubles up as a forex broker and offers a number of other assets. In addition to shares and Interactive Brokers forex trading, you can also invest in:
- Mutual Funds
Interactive Brokers Fees & Commissions
Put simply, Interactive Brokers offers some of the most competitive share dealing fees in the online brokerage space. Before we get to that, we should note that fees will vary depending on whether you have a professional (IBKR Pro) account or a retail (IBKR Lite) account.
For the purpose of this review, we will make the assumption that you are a casual NZ-based investor. So, in the case of investing in traditional shares, you will pay a commission of $0.005 per share. This does come at a minimum commission of $1, which is super-competitive nonetheless.
Taking into account that such a pricing structure might appear somewhat confusing at first glance, let’s take a look at a few examples to help clear the mist.
- Let’s say you were to buy 100 stocks at $5 per share – taking your total investment to $500. At $0.005 per share, this amounts to a commission of $0.05. However, the minimum at Interactive Brokers is $1, so this is what you would pay. This works out at a nominal commission of 0.2% – which is superb.
- In another example, let’s say that you buy 1,000 stocks at $2 each – taking your total investment to $2,000. At $0.005 per share, this amounts to a commission of $0.50. Once again, the minimum at Interactive Brokers is $1, so this is what you would pay. This works out at a nominal commission of 0.1% – which is even more competitive.
- Now let’s consider a substantial investment. We’ll say that you buy 10,000 shares at $2.50 each – taking your total investment to $25,000. Multiplying this by 0.005 per share, we are left with a commission of $5. This works out at an even more favourable commission of just 0.02%.
As you can see from the above examples, it doesn’t matter if you are investing small or large amounts – the commissions charged by Interactive Brokers are industry-leading.
If you choose to use Interactive Brokers NZ for a non-stock purchase, the fees are calculated in a different way.
- Options: Much like in the case of shares, Interactive Brokers utilizes a variable commission system on options. So, if the value of each contract is more than $0.10, then you will pay a fee of $0.65 per contract, at a minimum of $1. If the value of the contract is between $0.015 and $0.10, this amounts to $0.50 per contract. Finally, options contracts worth $0.05 or less come with a fee of $0.25 per contract.
- Mutual Funds: If you’re keen to invest in mutual funds at Interactive Brokers, you will pay a dealing fee of $14.95. Take note, you will be required to meet a minimum investment of $3,000 on mutual funds.
All in all, irrespective of which asset class you are trading, Interactive Brokers is hugely competitive.
Interactive Brokers Platform and Trading Tools
As we briefly touched upon earlier in our Interactive Brokers review, the platform is better suited for experienced investors. Sure, you can purchase shares and rarely pay a commission of more than $1, but – the trading arena itself is somewhat complex. This is because you will be required to use the broker’s proprietary trading platform – Traders Workstation (TWS).
TWS is available on both desktop and mobile format. The platform operates with an open Interactive Brokers API. As you can see from the screenshot below, you will be presented with a significant amount of data. This includes real-time price quotes and order book values, technical analysis charts, drawing tools, and more.
On the one hand, this is highly beneficial if you are an advanced investor – as you will be treated to sophisticated trading tools and features. In fact, there are very few platforms out there that can match the comprehensiveness of the features found on TWS.
On the other hand, as a newbie investor, you are likely to be extremely intimidated by just how advanced the platform is. As such, if you are simply looking for a user-friendly New Zealand share broker that allows you to buy stocks at the click of a button, you will likely be better suited for the likes of eToro.
Interactive Brokers Account Management
Interactive Brokers offers an intuitive platform that makes it easy to manage your account. The Interactive Brokers account management system allows you to manage all aspects of your trading accounts from a single window and just one Interactive Brokers login. You have convenient access to reporting, funding and trading, so overall the Interactive Brokers platform is very well designed and provides a smooth user experience.
Once again, if you are a seasoned stock market investor that seeks advanced trading tools – you will be pleased to know that Interactive Brokers New Zealand offers a wide range of market orders.
- STP LMT
- TRIAL LIMIT
- SNAP MKT
- SNAP MID
Ultimately, if you are not familiar with what the above market order types mean, then Interactive Brokers and its TWS trading platform will not be for you.
Additional Features at Interactive Brokers
On top of the tools discussed above, Interactive Brokers also offers the following features:
- Interest: If you have more than $100,000 in US dollars held at Interactive Brokers, the platform will pay you a nominal interest rate of 1.9%. This ensures that you do not incur opportunity costs.
- Fractional Investing: Interactive Brokers has since joined the fractional ownership scene. This means that you can invest in ‘full dollar amounts’, as opposed to needing to buy whole shares. For example, let’s say that you wanted to invest $300 into Facebook stocks. At a price of $240 per share, you would ordinarily only be able to buy one full share, or increase your stake to $480 by buying two. But with Interactive Brokers, you can simply buy $300 worth of Facebook shares.
- Android/iOS App: If you want the option of buying and selling shares on the move – or simply checking the value of your portfolio at the click of a button, Interactive Brokers offers a fully-fledged mobile app. This is available on both Android and iOS devices.
Although we have noted throughout our Interactive Brokers review that the platform is best suited for advanced traders, the broker actually offers a highly comprehensive educational department.
Firstly, you have the Traders Academy – which offers 48 online mini-courses. This introduces you to the basics online investing – such as performing analysis, placing market orders, and paying capital gains taxes.
You then have a full selection of guides and how-to explainers. This includes handy videos and articles, as well as a trading glossary. Interactive Brokers really excels when it comes to its live webinars – which all account users can take part in. This offers a direct overview of how an experienced trader thinks and gives you the opportunity to ask questions.
Research and Analysis at Interactive Brokers
Much like the platform’s educational department, Interactive Brokers is super-strong when it comes to research and analysis. This includes:
Once you access the TWS platform at Interactive Brokers NZ, you will be armed with all of the technical analysis tools that you need. This includes dozens of technical indicators, drawing tools, and other chart reading features.
The Interactive Brokers website is jam-packed with articles and videos containing trader insights. These consist of highly in-depth technical and fundamental views of expert traders – concerning particular trading opportunities. Each piece is relatively balanced, subsequently allowing you to make an informed decision. As always, never invest on the back on somebody else’s views. Instead, you should use trading insights as thought-provoking guidance only.
One of the best research tools offers by Interactive Brokers New Zealand is that of its portfolio tracker. Firstly, the feature will automatically pre-fill your portfolio with the stocks that you have already purchased at the platform. This does, of course, give you real-time access to the value of your holdings. But, the feature does so much more.
For example, you can instantly compare the performance of your portfolio to that of wider stock market indexes. This allows you to assess whether your research strategy is performing better or worse than the likes of the Dow Jones or FTSE 100.
Even more impressively, the portfolio tracker gives you real-time access to financial news developments that are related to your investments. For example, if you hold shares in Coca Cola and it is announced that the company has just released its latest earnings report, you will receive a notification as soon as the development hits the public domain.
Payments at Interactive Brokers
First and foremost, Interactive Brokers has a minimum deposit amount of $2,000. In terms of supported payment methods, the only option that you will have as a New Zealand resident is that of a bank wire. As such, it will take a few working days before the funds arrive in your account.
Interactive Brokers Contact and Customer Support
Interactive Brokers New Zealand offers customer support across several channels. This includes:
- Live chat
When we tested the live chat facility out ourselves, we were informed that the platform was experiencing a high volume of requests. As such, we were re-directed to the FAQ section.
If you desire instant support and live chat is unavailable, then your best bet is to call the Australia toll-number on +61 (2) 8093 7300
The operating hours for this number are Monday to Friday, 01:30 – 11:00 – Berlin time.
Is Interactive Brokers Safe?
Put simply, you should have no concerns about the safety of your funds at Interactive Brokers. Crucially, the platform is regulated by several tier-one licensing bodies.
- Australian Securities and Investments Commission
- Financial Conduct Authority
- Japan Securities Dealers Association
- Financial Futures Association of Japan
- Monetary Authority of Singapore
- Investment Industry Regulatory Organization of Canada
- Hong Kong Securities and Futures Commission
This means that your investment funds are stored in separate bank accounts to that of the broker’s working capital.
Interactive Brokers Pros & Cons
Interactive Brokers vs. eToro
So now that you have had a chance to digest some of the key metrics surrounding Interactive Brokers, we now need to see how the platform compares to its industry counterparts. In this respect, it is worth making a comparison with eToro, which is one of the most popular online brokers utilized by New Zealand residents.
So, in terms of the target audience, the two brokers could not be further apart. That is to say, while eToro is suited for the newbie investor with little experience, Interactive Brokers is likely only going to be sufficient for advanced traders. When it comes to fees, both brokers are extremely competitive. For example, while eToro does not charge any share dealing fees at all, equally, Interactive Brokers charges just $1 on average.
Charge per Trade Monthly Fee Inactivity Fee Deposit/Withdrawal Fees Interactive Brokers $1 on average $0 $10 per month (less trading commissions already paid) $0 eToro $0 $0 $10 per month after 1 year $5 per withdrawal
As you can see from the above, there is very little to separate eToro and Interactive Brokers in the fee department. Ultimately, it all boils down to how much of a user-friendly share dealing platform you need.
For example, if you simply want to buy some shares in the quickest time possible, the end-to-end process at eToro rarely takes more than 10 minutes. This includes opening an account and depositing funds, too. In the case of Interactive Brokers, it can take days to get fully set up.
When it comes to trading tools, we have to go with eToro over Interactive Brokers New Zealand. This is because eToro is a social trading platform and offers copy trading tools, meaning you can engage with and even copy the portfolios of top investors, and you have over 12 million users to choose from!
While we are on the subject of deposits, we should also note that Interactive Brokers only offers a traditional bank wire for New Zealand residents. On the contrary, eToro supports debit/credit cards bank transfers, Paypal, Skrill, and Neteller.
Overall, if you’re a beginner trade, we’d recommend going with eToro over Interactive Brokers.
Interactive Brokers New Zealand Review – The Verdict
All in all, Interactive Brokers does come with both its advantages and disadvantages. In terms of the positives, the platform offers some of the lowest share dealing and trading fees in the online brokerage scene. On average, you will rarely pay more than $1 per share investment – which is great. It is also notable that you will have access to tens of thousands of assets across dozens of markets. This ensures that you are able to create a healthy portfolio with ease.
However, Interactive Brokers New Zealand does come with its flaws. At the forefront of this is the complexity of its trading platform. That is to say, you will need to invest via its proprietary TWS platform, which for advanced traders is likely to be highly sufficient. But, if you’re just starting out in the world of stocks and shares, you might find the platform somewhat confusing. It is also disappointing that the sign-up process takes days on-end, and you won’t be able to deposit funds instantly with a debit/credit card.
As such, if you are looking for a simple share dealing platform that supports heaps of markets, it might be worth considering eToro. Not only can you get an account set up in minutes and instantly deposit funds with a debit/credit card or e-wallet, but you can buy shares without paying any fees or commissions!
eToro – Buy Shares With No Commission
75% of retail investor accounts lose money when trading CFDs with this provider.
Can you buy and sell bonds through Interactive Brokers?
You certainly can. In fact, Interactive Brokers NZ gives you access to bonds from several international markets.
Does Interactive Brokers accept New Zealand residents?
Yes, traders from New Zealand can use Interactive Brokers.
What shares can I buy at Interactive Brokers?
You will have access to tens of thousands of shares across dozens of stock markets.
Does Interactive Brokers accept NZ debit cards?
No, the only payment method that New Zealand residents can use at Interactive Brokers NZ is that of a bank wire. This means that you will need to wait several days for the funds to clear.
Does Interactive Brokers require a minimum deposit?
Interactive Brokers requires a minimum deposit of $2,000.
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