Why I opened account at Interactive Brokers

I have said many times before that one of my near future goal is to balance out my portfolio by increasing stock investment volume. For a while I have been looking for a better suited broker company that I can use for buying and holding the instruments. Firstly, I was choosing from different possibilities that LHV is offering and I even opened a LHV Broker account, however, by now I have sold my assets at LHV and opened an account at Interactive Brokers. Why? Continue reading!

Comparison between IB and LHV

NB! I have made some USD to EUR conversions. I also only compare USD stock market related trading fees.

Fee type Interactive B LHV Trader LHV Broker LHV Web
Trading 0.004€ (0.90€ min) 0.018€ (6.25€ min) 0.036€ (13.4€ min) 11€ fix + 0.3%
Monthly 0€ to 8.93€1,2 30€ + 0.025% 0€ 0.05% (1€ min)
MIN Value 0€3 ~4463€ 0€ 0€
Dividend TAX 15% 15% 30% 15%
  • 1 If Average Equity Balance is less than USD 2,000 (~1786€) then the fee is USD 20 (~17.85€) – Monthly Commission
  • 2 Accounts generating commissions less than the minimum as stated below in any given month will be assessed the difference as a monthly activity fee (Activity Fee = Minimum Required Monthly Commission – Actual Monthly Commission)
  • 3 IB states that the minimum to open the account is USD 10,000 however I and some other from Estonia have been able to open account with less than that

Example case

My plan is to buy some index ETF’s (Exchange-Traded Fund) every month. Lets imagine that I will buy 200€ worth of SPY (today 1 share costs about 186€). Then we get following monthly and yearly total fees.

Interactive B LHV Trader LHV Broker LHV Web
Monthly Commission 1€ 6.25€ 13.4€ 11.55€
YEARLY COMMISSION 12€ 75€ 160.8€ 138.66€
Monthly holding Fee 7.93€ >30€ 0€ 1€
Yearly Holding Fee 96.16€ >360€ 0€ 12€
Yearly Total 107.16€ >435€ 160.8€ 150,66€

Decision

As clearly seen from previous example the clear winner is IB. Therefore, I decided to open IB account. The process was very easy and quite fast. The only things I had to provide (besides filling different data forms) my ID card pictures (front and back side) and proof of address (sent my Starman PDF invoice).

I hope this comparison is useful to others also. If you have any questions or comments, please free to post them!

7 thoughts on “Why I opened account at Interactive Brokers

  1. Kui sa ostaksid kord kvartalis oleks LHV WEB aastane kulu peaaegu poole väiksem kui IB.
    Arvestades praegust ebastabiilsust USA turgudel ei ole kindlust, et vahepealsete ostudega võidetud tootlus ületab suuremad halduskulud. Igakuised ostusummad peaksid olema kõrgemad IB-ga võidu saavutamiseks. Samuti kui sa plaanid osta erinevaid aktsiad või ETF-e, siis oleks samuti IB kasulikum. Antud näitega pigem oleks mõistlikum LHV WEB.

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  2. Tänud kommentaari eest. Sul on õigus, oleks küll, aga see 200€ kuus ja SPY olid minu puhul lihtsaks näiteks. Pikemas plaanis on mõte osta rohkemaid instrumente (alahinnatud dividendi aktsiad, sektoripõhised ETF’id) ja veidi suuremate summadega kui näites. Samuti see kvartali variant eriti ei meeldi, kuna see vähendab hajutatavust. Plaanis on maht kindlasti üle 10K€ viia. 10K puhul on LHV WEB aasta tasu juba 60€ + tehingu tasud. Samuti on LHV ja kvartaliostude puhul eelis siis, kui sa hoiad instrumente pikalt, kui hakkad müügitehinguid ka tegema, siis see eelis kaob kiirelt.

    Lisaks on see probleem, et kui näiteks LHV ostad Saksa börsilt aktsiaid, siis LHV hoiab neid 3nda maakleri juures, mitte enda halduses. Kui LHV’ga peaks midagi juhtuma, siis võivad tekkida probleemid oma investeeringute tagasi saamiseks.

    Tegelikult oleks kvartali ostude puhul ja pikal hoidmisel ja suurema mahu puhul LHV broker etem kui WEB, sest WEBi puhul sööb kuutasu suurema portfeli korral eelise ära.

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  3. Pingback: August 2015 update | Developer's financial freedom journey

  4. Kust Sa seda infot leidsid, et LHV Brokeril ei ole võimalik 15% dividendide tulumaksu kasutada? Mulle endale tundub, et väheste tehingute puhul sobiks hetkel see variant kõige rohkem, aga see maksuteema ajab veidi segadusse hetkel.

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