Interactive Brokers in Portugal

What Interactive Brokers is

Interactive Brokers is a US broker with half a century of history. Opening an account from Portugal does not mean contracting with the parent company: you contract with Interactive Brokers Ireland Limited, an Irish entity set up to serve European Union clients and supervised by the Central Bank of Ireland.

It has the broadest offering of the brokers we compare, with access to shares, ETFs, bonds, options, futures, commodities and currencies across dozens of markets. In exchange it is also the most demanding: the platform was designed for professional investors, and the pricing model has two distinct plans with per-order minimums and maximums you need to understand before buying.

What it really costs

On the Fixed plan, a share on Euronext Lisbon costs 0.15% of the order value, with a €6 minimum and no maximum. The minimum decides almost everything: it only stops biting above €4,000, because that is where 0.15% equals €6. On a €1,000 purchase you pay €6, which is 0.60% of the amount; on a €10,000 purchase you pay €15, which is the same 0.15%.

On a US share it is USD 0.005 per share, with a USD 1 minimum per order and a maximum of 1% of the trade value. Converting euros into dollars is charged separately: 0.20 basis points of the amount, that is 0.002%, with a USD 2 minimum per trade.

Add the two together and the result is counter-intuitive. Buying USD 10,000 of a US ETF at USD 100 a share costs USD 1 in commission (the minimum, because 100 shares at USD 0.005 would be USD 0.50) plus USD 2 in FX (also the minimum): USD 3 in total, 0.03% of the amount. At XTB, which charges no commission but converts at 0.5%, the same purchase would cost USD 50. Interactive Brokers comes out seventeen times cheaper.

Now run the same numbers on USD 500: at Interactive Brokers you still pay both minimums, USD 3, which is 0.60% of the amount; at XTB you pay 0.5%, that is USD 2.50. The crossover sits near USD 600 per order, the point where the competitor’s 0.5% equals the USD 3 of minimums. Below that, buying a small amount every month at Interactive Brokers is expensive; above it, it is the cheapest option we found.

On Portuguese shares the arithmetic is different, and it is unfavourable: there is no currency conversion to save on, so the €6 minimum competes against brokers that charge no commission at all in euros.

Fixed or Tiered: the choice almost nobody explains

Interactive Brokers publishes two pricing plans and makes you pick one. On Fixed you pay a single all-in rate: on Euronext Lisbon that is 0.15%, with a €6 minimum, and the broker states it adds no exchange fees. On Tiered you pay a much lower base rate, 0.05% in Lisbon, with a €1.25 minimum and a €29 maximum per order, but exchange, clearing and regulatory fees are then charged separately.

On the published rate alone, Tiered is cheaper at any order size in Lisbon, and the gap is wide on large amounts: on a €100,000 order it is €29 against €150. What Fixed buys is predictability, because the figure you see is the figure you pay. Before deciding, check the third-party fees for the exchange you will trade on in the broker’s own price list, because that is what closes the Tiered calculation.

On very large orders there is also a volume scale: the Tiered rate falls from 0.05% to 0.03%, 0.02% and 0.015% as monthly traded volume passes 50, 100 and 500 million euros. In practice that changes nothing for a private investor.

Is it safe?

The entity you contract with is Interactive Brokers Ireland Limited, supervised by the Central Bank of Ireland under reference number C423427 and registered with the Irish companies office under number 657406. It is not supervised by the CMVM: it operates in Portugal under the European passport.

There is an important difference here against DEGIRO, and neither firm advertises it. Interactive Brokers states expressly that it is not a bank. The cash in your account carries no deposit guarantee at all: it is segregated into bank or custody accounts designated for the exclusive benefit of the Irish entity’s clients, under the Central Bank of Ireland’s client-asset rules. Segregation and a deposit guarantee are not the same thing. Segregation stops your money being mixed with the broker’s own; it is not insurance on the value.

The backstop is the Irish investor compensation scheme, and it is modest: it pays 90% of what you have lost, up to a maximum of €20,000 per investor. It covers the broker failing, never market losses. If you intend to leave large sums sitting in cash in the account, this is the point to weigh, and it is where a broker with a banking licence covers more.