How to open an Interactive Brokers account in Europe (2022)

How to open an interactive brokers account

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Introduction

Over the past 10 years, Online brokers have been racing to zero fees. As this article from the Wall Street Journal points out, In 1983 some advisors were charging $200 in commission on trades! Today that would be totally unacceptable. It comes with the global movement of democratizing Wall Street. These days, people want far more control over their own investing. indeed, over the past few years there has been an influx of retail investors, with more 100 Million retail accounts combined now open at the 6 largest online brokers. More people than ever are starting to invest themselves.

Interactive Brokers (IBKR) are one of the most popular online brokers and charge some of the lowest fees out there. So today I’m going to discuss why I use Interactive Brokers, and the exact steps that are needed to open an IBKR account.

I’m Shane, I’ve been actively managing my own portfolio for years, run the quantitative investment platform Aikido Finance, and am working towards FIRE (Financial Independence Retire Early)

I’m Shane, Quant investor, lifestyle designer, and this is Aikido Finance.

8 Reasons Why I Use Interactive Brokers

1. No minimum balance, no maintenance fees.

Interactive Brokers used to have a $10 maintenance/inactivity fee, but just this year (2021) they removed it – Woop! 🥳 This means you can just setup an account whenever you like, even if you don’t want to use it straight away.

2. Super low commissions

With IBKR Lite, it is completely free to trade US stocks and ETFs. Interactive brokers are one of just a very small handful that actually supply commision-free trading. However, IBKR Lite is only available to US clients. IBKR Pro on the other hand, available worldwide, and with far more functionality, also has very low commisions, starting at $0.0035 per share! Crazy cheap!

Speaking of IBKR Pro vs. Lite, heres a quick summary of the differences:

IBKR Lite

  • Simplified platform
  • Zero commision on US stocks & ETFS
  • Only for US residents

IBKR Pro

  • Huge amount of functionality
  • One of the most popular platform for professional traders around the world
  • Very low commisions
  • Extended trading hours (starting at 4am and ending at 8PM!)
  • Access to backtesting and Web Trader functionality

3. Interactive Brokers is world-renowned

Interactive Brokers was first incorporated in 1977, has grown to have well over a million clients worldwide, has $351B AUM (Assets Under Management), and in 2021 it was voted the best online broker by Barron’s.

I’m going for something called FIRE (Financial Independence Retire Early), I invest a very large amount of my pay cheque each month with the aim of hitting financial independence as early as possible. Indeed, I take this to such an extent that I live in my self-built campervan full time to cut down on costs. So it’s really nice to know that the online broker I’m investing with has a track-record. I need to know that my money is secure and that the broker I’m using is trustable!

4. Account protection

Speaking of security and trustability, your Interactive Brokers account is protected by SIPC (Securities Investor Protection Corporation) up to $500,000. SIPC is a non-profit corporation that has been protecting investors for the last 50 years.

5. Fast Opening Time

I managed to setup and fund my Interactive Brokers account within 1 week, which is actually really quick when compared to some of the other online or more traditional brokers out there!

6. Interactive Brokers Support is AMAZING

There have been a couple times when myself or my colleagues have needed help with something regarding Interactive Brokers (bear in mind we are using the platform professionally, so it was pretty complex and down in the weeds). The support staff were really quick to answer and super helpful. Most of the time, we were sorted in just a quick phone call.

7. Refer a friend, get 200$

Does any more need to be said? It’s up to 30 referrals in total. Read more about it here.

8. Integrate with Aikido Finance

Lastly, once you have an IBKR pro account setup you can integrate with Aikido Finance. This means you can easily live-trade any Aikido quant strategy. We have a bunch of strategies on the site, just pick one, create a portfolio, and you’re off to the races!

How to Open an Interactive Brokers Account

Opening an interactive brokers is pretty easy, but there are a few steps to it, so I’m going to run you through the entire process from start to finish – so you can start investing as soon as possible. Today we’re going to look at how to open an IBKR pro account.

Step 0. What you will need to open an Interactive Brokers account (have these ready)

  • USA
    • Social Security Number (SSN) or proof of ID number if not US citizen;
    • Your employer name, address and phone number;
    • Bank or 3rd party broker account numbers for funding purposes, plus routing number for check deposits.
  • Canada
    • Social Security Number (SSN) or proof of ID number if not US citizen;
    • Your employer name, address and phone number;
    • Bank or 3rd party broker account numbers for funding purposes, plus routing number for check deposits.
  • Europe
    • Full Name with 1 Proof of Identity (see below):
      • Passport
      • National Identity Card
      • Driver’s License
    • Residential Address with 1 Proof of Address (see below):
      • Utility Bill: For example, a bill for electricity, gas, water, landline telephone, home broadband, or TV. Mobile phone bills are not acceptable forms of proof of address.
      • Council tax bill
      • Home insurance bill
      • Bank, mortgage or brokerage statement
      • Signed and stamped letter from your bank on the bank’s letterhead confirming address
      • Credit card statement (not older than six weeks)
      • Government issued letters or statements: For example, we would accept a property tax bill, confirmation of residential address from the local authorities or a pension statement. Must be on official government letter-headed paper.
      • Resident permit
      • Driver’s license or national identity card: If you use your driver’s license or national identification card as proof of identity, it cannot also be used as proof of address.
    • Date and Country of Birth;
    • Citizenship;
    • Tax Residency & Tax Identification Number;
    • Employer’s name and address;
    • Information on assets and income;
    • Information on source of wealth and funds*;
    • Investment objectives and experience;
    • Bank or 3rd party broker account numbers for funding purposes; and
    • Details of other Account Users, if applicable
  • China
    • Name;
    • Address;
    • Date of Birth;
    • Citizenship;
    • Tax Residency;
    • Passport or Identity Card Number;
    • Employer name and address;
    • Information on assets and income;
    • Investment objectives and experience;
    • Bank or 3rd party broker account numbers for funding purposes
  • Hong Kong
    • Name;
    • Address;
    • Date of Birth;
    • Citizenship;
    • Tax Residency and ID Number;
    • Hong Kong Identity Card Number;
    • Employer name and address;
    • Information on assets and income;
    • Investment objectives and experience;
    • Bank or 3rd party broker account numbers for funding purposes, plus check number for check deposits.
  • Australia
    • Name;
    • Address;
    • Date of Birth;
    • Citizenship;
    • Tax Residency & Tax Identification Number;
    • Passport, Driver’s License or Identity Card Number;
    • Employer name and address;
    • Information on assets and income;
    • Investment objectives and experience;
    • Bank or 3rd party broker account numbers for funding purposes

Step 1. Click Open account from the Interactive Brokers Home Page

Step 2. Enter your email, username, and password

Make sure to check your email inbox and click the link to confirm your account.

Step 3. Choose your account type

Select your account type. For most users, this will be an individual account, but you can also select a joint or retirement account. Note that a retirement account such as an IRA account, will have some extra information that is required.

Step 4. Choose your location of residence

Enter your residence and you can start the application!

Step 5. Enter your contact information

This part of the application is self-explanatory. Enter your name, address, and some other contact details.

Step 6. Enter your personal information

Enter your date of birth, marital status, residence, tax information, and choose your identification type.

Step 7. Enter your income information

Next, you need to enter your source of income. For most this will be “Income from Employment,” but there are many other options to choose from, including inheritance, property, or even unemployment allowance.

You will also be asked to create your security questions here, in case you ever get locked out of your account.

Step 8. Enter your trading experience

Similarly, you need to provide your level of trading experience in this section as well as setting the permissions to trade the various asset classes of your choosing. To integrate your IBKR account with Aikido, you will need to be able to trade Stocks and Forex (if required) in the brokerage account.

This gives Interactive Brokers an idea of how much risk you should take on and what you get access to on the platform

Step 9. Final step: Verification and funding

You’ve just finished all the hard parts and you’re almost there! 🥳 The final things you will need to finish creating your account are:

  1. Fund Your Account
  2. Confirm Mobile Number (Optional)
  3. Submit A Photo ID to Verify Your Identity Simply upload a photo of your passport, driver’s license, or national identification card.

How to fund your Interactive Brokers Account

The steps to fund your account are provided by IBKR. You will need to make a SEPA transfer. Click “Get Instructions” to see the transfer information you will need to fund your account.

You will enter the amount of money that you intend to to send to your Interactive Brokers account, as well as the details of the bank account that the funds are being sent from. Interactive Brokers will then display the bank account details (such as the IBAN) that you are going to send the funds to.

You can then hop over to your bank and transfer the funds to Interactive Brokers.

Conclusion

Moving to Interactive Brokers helped change how I invest. It gave me massive insights into my investments and allowed me to trade more regularly, thus allowing me to keep my portfolio up to date. Of course on top of this, once integrated with Aikido Finance, the entire investment process was super structured and automated. Choose a strategy, send the trades to Interactive Brokers. Check out how to integrate Interactive Brokers with Aikido here.

Anyway, Hopefully this guide has helped you learn a little bit more about Interactive Brokers and why they are pretty cool!

If you want to add a bit of quant to your life, you can check out Aikido Finance. We make it super fast and easy to create a quantitative investment portfolio. Enter ‘purplecow’ at checkout for a 10% discount.

Until next time, take it easy.

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