Interactive Brokers, the low-cost stockbroker that has operations in London, Europe and Asia has launched a tax-effective savings and investment vehicle for its UK customers.
Interactive Brokers Stocks & Shares ISA
The low-cost broker has launched a Stocks and Shares ISA. The ISA will allow UK taxpayers to invest in a wide range of ISA eligible securities within the tax-free shelter.
Under current legalisation, individuals can invest up to £20,000 per annum and any income or capital gains generated within an ISA are free of tax.
What are the other features of the Interactive Brokers’ Stocks and Shares ISA?
There are several interesting features in the Interactive Brokers Stocks and Shares ISA to be aware of.
Firstly there is no minimum deposit required to open an ISA account, secondly Interactive Broker’s low rates of commission will apply to ISA trading.
ISA investors will be able to access, analyse and trade in stocks from around the globe using Interactive Brokers existing infrastructure and tools.
Interactive Brokers is also introducing fractional share trading in large-cap US stocks, to stocks and shares ISAs, for the first time.
Investors will now be able to gain exposure to the likes of Amazon, Apple, or Tesla with investments of just $100 and upwards.
The fractional shares are deemed to be ISA eligible because they are held by Interactive Brokers (and their ISA clients) in the form of “physical stock” and not derivative products.
Interactive Brokers will also make Advisor Linking available to ISA holders, who can use the company’s investor marketplace to find an advisor to manage an ISA on their behalf.
How does the Interactive Brokers’ Stocks and Shares ISA compare to the competition?
Interactive Brokers’ new ISA will need to compete with a host of similar products offered by established providers so who looks the best bet?
Following Interactive Brokers’ recent rationalisation of their UK and European commission rates it’s hard to imagine that they can be beaten on trading costs, but what about other fees and charges?
Well, Interactive Brokers will charge an activity fee of £3.00 per month, per Stocks and Shares ISA. However, if you generate £3.00 of commission in that month no fee is payable and if you generate a commission of less than £3.00 in a month then the difference between that sum and £3.00 is payable.
For comparison, Interactive Investors charges a £9.99 per month ISA account fee and Hargreaves Lansdown charges 0.45% of the value of the ISA, up to a maximum of £45.00 per annum. Whereas at a wealth manager Moneyfarm you can expect to pay an ISA fee of 0.75% of the value of the ISA every month.
Interactive Brokers will allow one free withdrawal per ISA, per month and will charge a £7.00 withdrawal fee thereafter. Whereas none of the other providers in the Good Money Guides Stock and Shares ISA comparison tables charges exit fees for cash withdrawals.
You can use our guide to compare the best stocks and shares ISA accounts here.
With over 35 years of finance experience, Darren is a highly respected and knowledgeable industry expert. With an extensive career covering trading, sales, analytics and research, he has a vast knowledge covering every aspect of the financial markets.
During his career, Darren has acted for and advised major hedge funds and investment banks such as GLG, Thames River, Ruby Capital and CQS, Dresdner Kleinwort and HSBC.
In addition to the financial analysis and commentary he provides as an editor at GoodMoneyGuide.com, his work has been featured in publications including Fool.co.uk.
As well as extensive experience of writing financial commentary, he previously worked as a Market Research & Client Relationships Manager at Admiral Markets UK Ltd, before providing expert insights as a market analyst at Pepperstone.
Darren is an expert in areas like currency, CFDs, equities and derivatives and has authored over 260 guides on GoodMoneyGuide.com.
He has an aptitude for explaining trading concepts in a way that newcomers can understand, such as this guide to day trading Forex at Pepperstone.com
Darren has done interviews and analysis for companies like Queso, including an interview on technical trading levels.
A well known authority in the industry, he has provided interviews on Bloomberg (UK), CNBC (UK) Reuters (UK), Tiptv (UK), BNN (Canada) and Asharq Bloomberg Arabia.
