eToro first came about in 2007 after being founded in Tel Aviv, Israel. This was great timing because in just over a decade the company has garnered over 9 million clients from around the world. Today, the broker has offices in numerous cities around the world including Sydney, Shanghai, Cyprus, London and New Jersey.
However, Interactive Brokers has been in business for over four decades but only has 607,000 accounts. It is a subsidiary of US-based Interactive Brokers Group, and primarily serves professional clients, which explains the low number of accounts. Interactive Brokers is the parent company’s subsidiary that deals with electronic trades after being created in 1993.
When you need to decide on a broker to trade with, you may have to consider these two brokers, and for that you need to know exactly what you get.
Trading on eToro usually starts with an initial deposit of $200 or an equivalent amount in EUR or GBP. Later on, the minimum deposit drops to $50. These deposits are free to make, but you will be charged $25 for withdrawals. Deposits can be made via wire transfer, credit card and electronic wallets like Skrill and Neteller.
Prior to 2019, Interactive Brokers required clients to deposit a minimum of $10,000, but this was scraped in April, 2019. Now there are no minimum requirements, but traders are encouraged to make trades that generate at least $10 in commissions per month. To understand IB’s fee structure, you would also need to know about the account types, which are IBKR Pro and IBKR Lite. IBKR Pro is meant for professional traders who pay commissions for trades, but must produce $10 commissions or the difference is deducted from their account. IBKR Lite is more suited for retail traders, and these accounts do not have any monthly minimum requirements for commission. Deposits can be made via wire, check, ACH (automatic clearing house), direct deposits, BPAY and several other means. Although Interactive Brokers does have numerous funding methods, these are usually slower and costly.
That being said, Interactive Brokers is still better for having no minimum deposit.
eToro has several licenses to operate from the FCA, CySEC and ASIC. These licenses allow the broker to solicit clients from most countries in the world except the US and Japan. Since Interactive Brokers is based in the US, it is one of the few brokers regulated by the CFTC and a member of the NFA. It is also licensed by IIROC, ASIC, FCA, India’s SEBI, Japan’s FSA and Hong Kong’s SFC.
Winner is definitely Interactive Brokers.
On eToro, markets can be accessed from a web browser on the web trader as well as iOS and Android apps to download on mobile devices. Interactive Brokers has mobile apps too, as well as a web-based and downloadable desktop app. However, these are only available for IBKR Pro clients while IBKR Lite clients only access markets from a client portal with limited features.
This section is a tie because retail traders may prefer eToro’s web trader while professionals enjoy IB’s platform with plenty of features.
As a CFDs broker, traders have access to multiple markets including spot Forex, commodities, stocks, indices, cryptocurrencies and ETFs. Interactive Brokers has a lot more assets with the addition of futures, options, mutual funds, hedge funds, fixed income and EFPs.
Winner is Interactive Brokers.
Which is better?
After considering all the above, Interactive Brokers is the overall better broker compared to eToro.