eToro vs Interactive Brokers: A Side-by-Side Comparison

If you dabble in cryptocurrency, you must have wondered which online trading platform can help you improve your investment interest. An online trading platform is a technology that permits users to place orders for financial items over a network. 

It supports the trade of various financial items through a financial intermediary or directly between participants. eToro and Interactive Brokers are two of the most prominent online trading platforms.

eToro is a trading and investment platform that lets you grow your knowledge and success in a global community of traders. At the same time, Interactive Brokers, Inc. (IB) is an international brokerage corporation headquartered in the United States. 

It operates the world’s largest electronic trading platform regarding daily average revenue trades. The blog aims to provide a complete comparison of eToro and Interactive Brokers. It will help you to select the best online trading platform for your investment needs.

Platform Overview of eToro

eToro was launched in 2007 and has developed to become a renowned online trading platform noted for its creative approach to investment. Founded to open up trading, eToro has a global presence with over 33 million registered users in over 76 countries. eToro’s key target areas are:

Digital adaptation

eToro ensures an easy digital experience. It offers its platform in different languages to meet the diverse needs of its users.

Regulatory compliance

eToro collaborates with businesses like Trulioo to verify identification and maintain compliance in global markets.

Market expansion

eToro continues to expand into new markets. Its emphasis is on the Middle East and North Africa and recently licensed in Abu Dhabi to facilitate growth.

Also read: eToro vs Trading 212: Which One Should You Use?

Platform Overview of Interactive Brokers

Interactive Brokers was founded in 1978 by Thomas Peterffy. It is a famous brokerage firm with a long history in the financial world. It began as a market maker, pioneering electronic trading, before expanding into brokerage services. 

Interactive Brokers is connected to over 135 markets in 33 countries. It allows traders to invest globally in a variety of asset classes. The primary focus areas of Interactive Brokers are:

Short-securities availability

IBKR’s SLB system allows clients to search for sortable securities through the Client Portal, updated periodically throughout the day.

Fundamentals explorer

Interactive Brokers offers complete fundamental data, including analyst ratings, for over 30,000 firms, with 300+ data points and 80+ news sources.

Stock yield enhancement program

Interactive Brokers allows clients to generate additional money through this program. They can lend fully paid shares to traders for short purchases.

Features of Interactive Brokers and eToro

Both eToro and Interactive Brokers have a few similarities. They also differ in several ways and are aimed at diverse types of traders. Here, we examine the features of each side by side to assist you in making the right decision:

Social trading

eToro is an innovator in social trading. It permits users to recreate successful investors’ trades via the CopyTrader application. This is especially advantageous for beginners, who can learn by imitating the techniques of more experienced traders.

CopyPortfolios also provides a managed portfolio option. It collects together top-performing assets or traders. These elements promote a community-driven trading environment and democratize access to expert trading techniques.

Conversely, interactive brokers do not provide social trading techniques. They supply more effective tools and significant market access to self-directed traders.

This might not be attractive to beginners seeking instruction through social trading, but it is helpful for experienced traders who want to design and implement their strategies.

So, eToro is an ideal option for those interested in social trading to exploit other traders’ expertise. Interactive Brokers is efficiently suited to independent, experienced traders.

User-friendly interface

eToro’s platform is famous for its user-friendly layout, which is intended to be easy and accessible to traders of all skill levels. The clean, primary interface helps you to easily switch between assets and markets, conduct transactions, and monitor portfolios.

Its ease of use is one of eToro’s most significant advantages, especially for beginner traders.

Interactive Brokers provides advanced trading platforms, like Trader Workstation (TWS) and IBKR Mobile. These platforms are feature-rich and offer advanced trading capabilities. However, their complexities may need to be clarified for newcomers.

The high learning process can be a barrier for inexperienced traders, but experienced traders may appreciate the level of capability and customization.

eToro is the best option for those who want an easy-to-use platform. Because of its complexity, interactive Brokers can be an effective tool for skilled traders.

Cryptocurrency trading

eToro has a wide range of cryptocurrencies to meet the growing demand for digital assets. Users can trade popular cryptocurrencies, including Bitcoin, Ethereum, Ripple, and less popular altcoins.

The platform supports direct cryptocurrency to purchase and trade. This makes it an easy option for crypto supporters.

Interactive Brokers has increased its capabilities to incorporate cryptocurrency but offers fewer opportunities than eToro.

While it covers major cryptocurrencies, its primary concentration remains on traditional asset classes. This may be a disadvantage for traders who are substantially invested in cryptocurrency.

It can be considered that eToro is a top place for extended bitcoin trading. Interactive Brokers is ideal for those who want to experiment with cryptocurrencies but choose other asset classes.

Pros and Cons of Interactive Brokers and eToro

Both eToro and Interactive Brokers have various advantages and disadvantages, which make them appropriate for different types of traders.

Pros of eToro

eToro stands out for its social interaction features, allowing traders to communicate, exchange insights, and discuss methods within the community. This social aspect fosters a collaborative environment that can be particularly informative for users. 

Additionally, eToro offers many educational resources, including articles, videos, and tutorials, to help users improve their trading skills. These resources are beneficial for both new and intermediate traders. 

The platform’s accessibility is another advantage, as it is available in several languages and caters to a global audience, making it an attractive choice for international traders.

Pros of Interactive Brokers

Interactive Brokers excels in regulatory compliance and safety. Several top-tier regulatory bodies regulate it, including the United States SEC, the United Kingdom’s FCA, and ASIC in Australia. 

This regulatory oversight ensures high safety and reliability for traders. The platform also provides extensive international market access, offering traders access to more than 135 marketplaces in 33 countries, which is advantageous for investors looking to diversify their investments geographically. 

Furthermore, Interactive Brokers includes advanced trading capabilities, such as options strategies, futures spreads, and advanced FX order types, making it an excellent choice for professional and institutional traders.

Cons of eToro

eToro does have its drawbacks. The platform imposes a fixed withdrawal fee, which can disadvantage users who frequently transfer funds. Additionally, eToro requires a higher minimum deposit than many other platforms, which can be a barrier for new traders with limited funds. 

If an account remains inactive for an extended period, eToro charges an inactivity fee, which can disadvantage casual traders who do not trade regularly.

Cons of Interactive Brokers

Interactive Brokers also have their share of disadvantages. The platform has received criticism for its customer service, with users often finding it challenging to obtain quick and helpful assistance. 

Additionally, some account types require high minimum balances, which can be prohibitively expensive for small or starting investors. 

The pricing structure of Interactive Brokers can be complex, with various costs for different services and account types, making it difficult for new users to understand the economic implications of their trades.

eToro vs Interactive Brokers: Pricing Comparison 

Pricing is an important consideration that can significantly affect overall trade expenses and profitability. Here is a complete comparison of the price structures for eToro and Interactive Brokers that covers account types, fees, and other financial factors:

Minimum deposits

eToro requires a minimum deposit of $200 in most countries and $100 for Australians and some other residents.

No minimum deposit is required to start an account with Interactive Brokers. However, some account types may require higher minimums. A margin account usually requires a deposit of at least $2,000.

Fee structure

Spreads for trading on eToro vary per asset. For example, the spread for trading EUR/USD begins at one pip, while the spread for Bitcoin is 0.75%. 

On the other hand, spreads in Interactive Brokers differ by market and asset class. For forex, the spread is 0.1 pips plus a 0.40 pips charge per 100,000 currency units.

eToro charges a $10 per month fee after 12 months of inactivity. However, Interactive Brokers no longer charges inactivity fees for individual accounts, an addition intended to enhance the platform’s accessibility.

User experience and support 

eToro is highly regarded for its intuitive navigation and functionality. It provides 24/5 customer service via live chat and email. Overall, user feedback and reviews are excellent, with beginners appreciating the ease of use.

Interactive Brokers is effective, but it might be overwhelming. It provides 24/5 phone and chat help, although it has received criticism. User Feedback and Reviews are frequently criticized for their severe learning path.

How You Can Protect Your Crypto Investment With an LLC

Your trading needs and experience will affect whether you choose eToro or Interactive Brokers. eToro specializes in social trading and ease of use, whereas Interactive Brokers provides advanced tools and affordable fees to experts. Analyze your goals and preferences to determine the best fit. 

But whatever platform you choose, forming an LLC will be the best decision to protect your investments. It will safeguard you against lawsuits and huge liabilities and benefit you in your tax filings. 

We at doola ensure that we provide every entrepreneur worldwide the opportunity to set up a U.S. LLC. Our bookkeeping and tax compliance services in the doola Total Compliance bundle also level up their financial health. 

Talent is everywhere; opportunity is not. Seize your opportunity by signing up for a free consultation.

FAQs

What are the primary differences between eToro and Interactive Brokers?

eToro is renowned for its social trading features, allowing users to copy the trades of successful investors. At the same time, Interactive Brokers offers advanced trading tools and extensive market access for professional traders.

Which platform is better for beginners, eToro or Interactive Brokers?

eToro is generally better for beginners due to its user-friendly interface and educational resources. In contrast, Interactive Brokers may be more suitable for experienced traders who require advanced trading capabilities.

Are there any withdrawal fees on eToro and Interactive Brokers?

eToro imposes a fixed withdrawal fee, while Interactive Brokers does not charge withdrawal fees but has other costs associated with different services and account types.

What types of assets can I trade on eToro and Interactive Brokers?

eToro offers many assets, including stocks, ETFs, cryptocurrencies, commodities, and indices. Interactive Brokers also provide access to many assets, including stocks, options, futures, forex, and bonds across multiple international markets.

How do eToro and Interactive Brokers ensure the safety of their users?

eToro complies with global regulatory standards and collaborates with businesses to verify identification and maintain compliance. Interactive Brokers are regulated by top-tier regulatory bodies, including the SEC, FCA, and ASIC, ensuring high safety and reliability for traders.