eToro versus Interactive Brokers

eToro offers 25M+ social traders its popular proprietary CopyTrader and CopyPortfolios services and maintains in-house managed thematic investment portfolios. It caters exceptionally well to its core trader base, and its latest venture is an NFT fund following numerous acquisitions in the cryptocurrency sector. The eToro Academy, eToro plus, and The Bull Club assist beginner traders.

Interactive Brokers presents one of the most competitive core trading environments available globally, with a suite of cutting-edge proprietary solutions developed for advanced traders. It supports third-party developers and algorithmic trading solutions. Beginner traders will benefit from the comprehensive IBKR Campus, one of the highest-quality educational services industry-wide.

We have conducted an in-depth review of eToro and Interactive Brokers to determine which one presents the better overall choice and which traders will benefit the most at either broker.

Features and Platforms

Features & PlatformseToro (visit site)Interactive Brokers (visit site)
Headquarter:IsraelUS
Established :
20071978
Retail Loss Rate:
Undisclosed58.4%
Regulation:
Minimum Deposit:
$10 - $10,000$0
Demo Account:
Managed Account:
Islamic Account:
Inactivity Fee
$10 monthly after 12 monthsNo
Deposit Fee:
Third-Party No
Withdrawal Fee
Yes + Third-PartyThird-Party
Funding Methods:
102
MT4:
MT5:
cTrader:
Proprietary Platform:
Automated Trading:
Social / Copy Trading:
MT4/MT5 Add-ons:
Guaranteed Stop Loss:
Negative Balance Protection:
Bonuses and Promotions:
Unique Feature One:
Large trading communityBroad-asset selection
Unique Feature Two:
Copy-trading platformExcellent trading tools
Broker Offers:
*78% of retail CFD accounts lose money

Noteworthy:

eToro has more active traders, but the Interactive Brokers Investor's Marketplace offers 1,500+ services, creating a distinct advantage for traders while passive investors can benefit from Interactive Advisors.

Available Markets

Available MarketseToroInteractive Brokers
Currency Pairs:
Cryptocurrency Pairs:
Commodities and Metals:
Indices:
Equities:
Bonds:
ETFs:
Options, Futures, and Synthetics:
Maximum Retail Leverage:
1:301:40
Maximum Pro Leverage:
Undisclosed1:40

Most retail traders will find eToro’s 2,000+ CFDs focused on equities more than enough to find trading opportunities and achieve cross-asset diversification. Interactive Brokers, a prime brokerage and liquidity provider, presents traders and investors with 135 markets across 33 countries in 23 currencies, resulting in one of the broadest selections of assets available in the industry.

Typical Spreads and Fees

Typical Spreads & FeeseToroInteractive Brokers
Minimum Raw Spreads:
Not applicable0.1 pips
Minimum Standard Spreads:
1.0 pipsNot applicable
Minimum Commission for Forex:
Commission-free$2.00 per round lot
Commission for Equity CFDs:
0.09%0.05% per trade
Cash Rebates:
Execution Type:
Market MakerMarket Maker

The pricing environment is notably cheaper at Interactive Brokers. Forex traders pay a minimum trading fee of $10 per 1.0 standard lot, commission-free, versus $3 at Interactive Brokers, including a $2 commission. Equity commissions at eToro are 0.09%, commission-free for unleveraged buy orders, and 0.05% at Interactive Brokers.

Security and Trust

eToro

Country of the RegulatorName of the RegulatorLicense Number
US
US Securities and Exchange Commission (SEC)Undisclosed
Cyprus
Cyprus Securities Exchange Commission109/10
UK
Financial Conduct Authority583263
Australia
Australian Securities and Investments Commission491139
Seychelles
Financial Services AuthoritySD076

Interactive Brokers

Country of the RegulatorName of the RegulatorLicense Number
US
US Securities and Exchange Commission (SEC)Undisclosed
Canada
Investment Industry Regulatory Organization of Canada (IIROC)Undisclosed
UK
Financial Conduct Authority (FCA)208159
Luxembourg
Commission de Surveillance du Secteur Financier (CSSF)Undisclosed
Ireland
Central Bank of Ireland (CBI)C423427
Hungary
Central Bank of Hungary (MNB)H-EN-III-623/2020
Australia
Australian Securities and Investments Commission (ASIC)453554
Hong Kong
Hong Kong Securities and Futures Commission (SFC)Undisclosed
India
Securities and Exchange Board of India (SEBI)INZ000217730
Japan
Japan Securities Dealers Association (JSDA) 187
Singapore
Monetary Authority of Singapore (MAS)CMS100917

eToro has a $1,000,000 third-party insurance program underwritten by Lloyd's of London, while Interactive Brokers is a NASDAQ-listed company and constituent of the S&P 500. It remains 81.5% privately held, with $6 billion in excess regulatory capital. eToro and Interactive Brokers segregate client deposits from corporate funds, offer negative balance protection, and both rank among the most trusted brokers.

eToro vs Interactive Brokers – Verdict

eToro

ProsCons
Copy-trading with a community numbering almost 25 million tradersHigher minimum deposit requirement but within a reasonable range
User-friendly web-based trading platform and mobile appAbsence of MT4 and no algorithmic trading
Quality educational offering for beginner traders via videos
Balanced asset selection with a focus on equity CFDs and ETFs

Interactive Brokers

ProsCons
Cutting-edge proprietary trading platforms with support for algorithmic tradingLimited deposit and withdrawal options
Industry-leading asset selection and trading costs
Superior trading tools consisting of 1,500+ services
Low-cost passive investments from as little as $100

Interactive Brokers remains a global powerhouse with algorithmic trading support. Its clients receive cutting-edge trading platforms, a broad-based asset selection, and among the lowest cost structures industry wide. Its huge overall product and services portfolio may overwhelm many retail traders, making eToro a better choice for millennial and GenZ traders who prefer mobile social trading.

FAQs

What is the downside to eToro?

eToro does not support algorithmic trading and maintains an above-average cost structure.

Is eToro good for investing or trading?

The commission-free direct share dealing makes eToro a better choice for long-term investors or low-frequency traders.

What happens if eToro goes bust?

eToro has a $1,000,000 third-party insurance program underwritten by Lloyd's of London. The UK, Cyprus, and US subsidiaries also have an investor compensation fund.

Is it worth copying on eToro?

eToro caters to retail traders, where approximately 80% operate at losses. Therefore, many traders will copy losing portfolios. The compensation for signal providers is not large.

Is my money safe in eToro?

eToro ensures client deposit safety by segregating deposits from corporate funds at tier 1 banks. It also has a $1,000,000 third-party insurance program underwritten by Lloyd's of London and complies with five regulators, three of which offer an investor compensation fund.

Is eToro good for the long term?

eToro provides long-term investors with a competitive product with commission-free direct share dealing, ETFs, and in-house managed thematic investment portfolios.

How much is the eToro withdrawal fee?

eToro charges $5 per withdrawal internally, and traders must also consider third-party payment processor fees.

Is eToro tax-free?

eToro does not offer tax-free accounts, and all clients must ensure they comply with local tax laws. It is best to consult a licensed professional for individual advice.

Is eToro really free?

eToro is not free and lists all applicable costs transparently on its website.

Are Interactive Brokers safe?

Interactive Brokers ranks among the safest and most trusted brokers globally compliant with eleven regulators and has a clean track record.

Is Interactive Brokers good for beginners?

While the overall product and services portfolio may overwhelm many retail traders, the educational content at Interactive Brokers ranks among the best available in the industry.

Does Interactive Brokers charge a monthly fee?

Interactive Brokers does not charge a monthly fee, except for advisory fees, where extra costs may apply.

Is Interactive Brokers good for day trading?

Interactive Brokers maintains a highly competitive infrastructure for day trading, including low costs, deep liquidity, fast order execution, and choice of trading instruments. However, market orders can be filled at extremely wide spreads.

How much money do you need to open an Interactive Brokers account?

Interactive Brokers does not have a minimum deposit requirement, ensuring clients maintain complete flexibility to manage their accounts.

What happens if Interactive Brokers goes bust?

It depends on the geographic location of the operating subsidiary. Interactive Brokers has $6 billion in excess regulatory capital and is a publicly listed company that complies with strict financial requirements, making default extremely unlikely.