How to open an Interactive Brokers account (Complete Guide - 2022)

over the past 10 years online brokers have been racing to zero fees as this article from the wall street journal points out in 1983 some advisors were charging up to 200 per commission for trades for their clients now today that would be completely unacceptable more people than ever are controlling their own investment portfolio and looking for really low fees and that kind of goes with the global theme that's really out there at the moment of democratizing wall street and really leveling the playing field indeed over the past few years there's been an absolute influx of retail investors currently in the six largest online brokers that exist there are 100 million retail accounts that have been opened so more people than ever want to invest themselves now interactive brokers or ibkr are one of the most popular brokers that exist and offer some of the lowest fees out there so today i'm going to discuss why i use interactive brokers some of the benefits that i see and go through the entire process of opening up an account from start to finish so you can find a link in the description to interactive brokers where you can easily set up an interactive broker's account and start investing today i'm shane quant investor lifestyle designer and this is aikido finance [Music] okay so i'm going to start by going over the eight reasons why i use interactive brokers personally so the first reason is that there is no minimum requirement for the amount that you put into your account and there's no inactivity fee before interactive brokers used to charge a 10 maintenance fee but just this year in 2021 they removed it so it's completely free to open up account zero an activity fee and you're good to go so what that basically means is that you can create your account and just leave it lying there if you're not ready to invest just yet makes it really easy to just set up your account and get going the second reason is probably the most important reason of all and that's the super low commissions that they offer so with ibkr lite you actually get commission free zero dollars to trade us etfs and u.s stocks now ibk are one of just a very few handful who actually do offer commission free trading ibkr pro their more advanced platform also has really really low commissions starting at three and a half cent per share that you purchase and only going lower as you invest more money so crazy cheap so just a quick aside to talk about the differences between ibkr lite and ibkr pro ibk our lite is just a simplified version of interactive brokers now it's only for us residents but it does give you that free trading on u.s etfs and shares ibkr pro on the other hand is going to give you a lot more functionality the ability to trade fractional shares worldwide scope you can even run back tests on the platform so there's a lot more functionality you're getting with pro and another benefit is you actually get extended trading hours with pro as well from 4 o'clock in the morning until 8 pm at night so a huge window there where you can actually trade and invest reason number three is that interactive brokers is pretty world renowned i mean it started in 1977 so it's been going for ages has currently 350 billion dollars in assets under management with over a million clients worldwide also this year in 2021 it was awarded online broker of the year by barons so it's really nice just having that level of trust there that you know that who you're investing your money with is a trustable broker i mean i suppose for me personally i'm going for something called fire financial independence retire early and that means that i put away and invest a huge amount of my paycheck every single month and i take this to such an extent that i actually live in my camper van full time to try and reduce costs so it means that that money that i put away and invest i need to know that it's going and being invested through a really secure platform i don't invest that percentage of my paycheck every month to gamble it away i want to know that my money is secure and that my broker is trustable and that leads us on to reason number four which is pretty related and that is the security that you get with your account so with an ibkr pro account you are backed by the sipc that's the securities investor protection corporation and they protect your account up to five hundred thousand dollars now the sipc is a non-profit corporation to help investors and they've been around for like 50 years reason number five that interactive brokers is pretty cool is that it's very very quick to get an account opened i think i had my account opened in less than a week and the whole process was really easy i just needed to upload a few documents and that's kind of compared to other online brokers that i've also opened accounts with and found the process to be a little bit slow and cumbersome reason number six why i use interactive brokers is that the support is actually really good that you get now at my company aikido finance we use interactive brokers from the professional side so we need to integrate with them and we've had a few things that have come up where we needed to hop on a phone and ask them a few questions and found them to be really really quick to answer and we've normally got the solution fixed right there on the phone normally fixed within like half an hour so yeah i found interactive broker support to be really good so my commendations to you guys reason number seven is that when you refer to a friend you get 200 pretty straightforward right i think you can refer up to 30 people in total and reason number eight why interactive brokers is pretty awesome is because it integrates really well with aikido finance that means you can live trade any quant strategy from the aikido catalog you can literally just pick a strategy create a portfolio and send those orders to your interactive brokers account automate the whole process okay so now let's look at how to actually open an interactive brokers account step by step it's not very hard but there are a fair few steps to it so i'm going to walk through in detail and run you through it so you can have your interactive broker's account set up in no time so before you get started just make sure you have on hand a proof of identification like a passport or diving license and also a proof of home address could be utility bill something like that so the first thing you're going to do is go to the interactive broker's website click create account and then just enter in an email username and a password and you're ready to get started next choose your account type so this could be individual joint or a retirement account this is likely just going to be an individual account but if you want to set up a retirement account like an ira or something like that you can do that as well now you are going to need a little bit of extra information to get your pension account set up for a self-managed pension then the final step of sort of this first part of the application is just to choose your country of residence and then you can click start application then we go into the next stage of the application and that's just filling out some pretty standard forms the first page is your contact information the next page after that is your personal information like your date of birth or your marital status the next step is to enter in some information about your income so this is just the source of where you're getting the funds that you're putting into your interactive brokers account so whether it's from your full-time job or even from your unemployment income the next step then is to enter in your trading experience this is just so interactive brokers know what level of experience you have before just to know what you actually have access to and be able to trade and the very final step then is to just verify your account and to fund it so there's three parts of this the first one is optional that's to enter in your phone number the second thing you need to do is upload a photo of your identification so that could be your passport or your driving license and the third step is to actually fund your account to put money from your bank into your interactive brokers account so it's pretty straightforward to fund your interactive brokers account you're just going to click that button that says get instructions you're going to enter the amount that you want to invest and also some details of the bank account that you're sending the funds through interactive brokers will put an intent there a pending intent that the uh they're they're waiting for the funds to enter your account then you're going to go to your bank account you're going to put in the details of your interactive broker's account which they would have just given you and you're going to send those funds across to your interactive brokers account and it's pretty straightforward the funds should be with you in just a day or two so there we go that's a complete walk through on how to use interactive brokers and there we have it interactive brokers really helped change how i invest with the super low commissions it allowed me to put money in more regularly and invest more regularly which in turn just really helped me keep my portfolio to date obviously on top of that then the fact that i could integrate it with aikido finance to create a portfolio and like automate everything was sort of the cherry on top so i hope i've helped you at least just a little bit today on giving you a bit more information on interactive brokers and on how to set up an account oh and if you want to add a little bit of quant to your life and you want to check out aikido finance you can use the discount code purple cow at checkout for a 10 discount so you can get creating portfolios and i'll go trading straight away so until next time take it easy [Music] you

Channel: Aikido Finance

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Id: RVGTssZxvP8

Length: 9min 47sec (587 seconds)

Published: Thu Sep 23 2021