Interactive Brokers vs eToro
Interactive Brokers vs eToro: which is the better broker for global investors?
Same portfolio at both providers: USD 50,000 to start, USD 500 a month, 5% a year, held for 30 years. Interactive Brokers costs USD 614 in total fees. eToro costs USD 12,500, which is USD 11,886 more, roughly 20 times as much.
Referral link: ibkr.com/referral/marco1592. The bonus is paid by Interactive Brokers. Using it costs you nothing extra.
Cost comparison, side by side
| What you pay for | Interactive Brokers | eToro |
|---|---|---|
| Total fees over 30 years | USD 614 | USD 12,500 |
| Custody / platform fee | None on a standard account | No custody fee, but a USD 10 monthly inactivity fee after 12 months |
| Cost per trade | From USD 0.35 on US listings, from EUR 1.25 on European listings | Commission-free headline pricing, cost sits in the spread |
| Currency conversion | Around 0.002% of the amount, minimum USD 2, at the interbank rate | Up to 1.5% on every deposit and conversion into USD |
| Other charges | No inactivity fee, no withdrawal fee for the first withdrawal each month | USD 5 withdrawal fee, limited transfer-out options |
Figures are indicative, based on published tariffs for the portfolio described above and converted to US dollars. Pricing differs by country of residence and changes often, so check both providers before you decide.
Where eToro is genuinely good
- Very easy onboarding and a friendly mobile app
- Fractional shares from small amounts
- Social and copy trading features you will not find at IBKR
Where it costs you
- Currency conversion is where almost all of the cost hides
- Thin ETF range and no proper multi-currency cash management
- Reporting is weak if you need documentation for a tax return
My take
eToro is the easiest place to start and one of the most expensive places to stay. The headline says zero commission; the FX line says otherwise.
Both accounts are legitimate and both are regulated. The question is what you are paying for. If you want a hand-held experience in your own language and time zone, eToro does that. If you want to keep as much of your return as possible, Interactive Brokers is the cheaper account and the extra paperwork takes about half an hour a year.