Our Verdict
In this comparison, Interactive Brokers emerges as the clear winner. Here’s why:
- The platform stands out with its extensive range of investment options.
- It is designed for both experienced and inexperienced traders.
- It offers some of the most affordable fees in the industry.
On the other hand, Betterment isn’t bad either. The platform excels in its simplicity and ease of use. If you’re seeking a more hands-off approach to investing, you might find the platform preferable. Betterment comes with automated investment strategies, based on modern portfolio theory.
Ultimately, both platforms are great options. However, if you’re serious about investing and desire professional tools and options at your disposal, choose Interactive Brokers.
Why Choose Interactive Brokers
Who Interactive Brokers is Best For
Make Interactive Brokers your preferred choice if you:
- Desire a world-class platform that helps you to access over 150 markets in 34 countries, and 27 currencies, allowing you to spread your fund across different portfolios.
- Want a platform that offers competitive margin rates, typically lower than what you find among many brokers.
- Prefer a trading platform that comes with the flexibility to choose from different account types. This way, you can pick the one that suits your investment needs.
- Want to access a wide range of research and analysis tools that help you to build your investment knowledge.
- Are an advanced trader who executes complex strategies using sophisticated trading tools.
- Want to cut down on fees and commission by leveraging Interactive Brokers’ low trading fees offering.
- Love a platform that allows you to tailor your trades to align with your goals and strategies using its customizable interface, so you can have properly managed investments.
- Want access to 90+ order types and free trading tools for free.
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Who Interactive Brokers isn’t Right For
You may not find Fidelity Investment appealing if you:
- Prefer a free trading platform with a simple and mobile-first design.
- Love to invest heavily in cryptocurrencies considering Fidelity’s limited offerings.
- Live outside the United States since Fidelity’s offerings are restricted from traders outside its jurisdiction.
- Want a minimalistic, straightforward interface like Robinhood or Webull.
Why Choose the Betterment
Who Betterment is Best For
Choose Betterment as your preferred trading platform if you:
- Want a platform that uses sophisticated algorithms to manage your portfolio. It does so by rebalancing and optimizing your investments to maximize returns and reduce risks automatically.
- Desire a user-friendly, intuitive interface that is designed to make investing straightforward and accessible for you.
- Seek a platform that has some of the lowest management fees ranging from 0.25% to 0.40%, making it an affordable option for you.
- Need help setting and achieving financial goals by planning investments that are tailored to your needs.
- Want to leverage tax-loss harvesting. With Betterment’s automated tax-loss harvesting, you can reduce your tax bill by offsetting gains with losses.
- Need access to licensed financial experts who can provide excellent support and guidance you may require.
- Intend to manage your cash by leveraging features like high-yield savings accounts and checking accounts. These accounts reward you with competitive interest rates, no monthly fees, and ATM fee reimbursements.
Who Betterment isn’t Right For
Look for a different trading platform if you:
- Want low fees on higher account tiers. While the basic management fee is low, your fee hikes up to 0.40% when you upgrade to a premium account that offers access to financial advisors.
- Are an active trader. With its automated and long-term approach to investment, you who prefer frequent buying and selling of securities may feel restricted.
- Seek access to human financial advisors on basic plans without necessarily having to upgrade to a premium package.
Interactive Brokers vs Betterment: The Main Difference
| Interactive Brokers | Betterment |
Ideal For | ● Traders seeking advanced tools. ● Investors who want low fees for trading. ● Traders desiring access to global markets. | ● Non-active traders. ● Traders who prefer ETFs. ● Traders seeking tax-loss harvesting.
|
Pricing | ● Offers free trial. ● Takes $06 commissions with no added spreads, ticket charges, platform fees, or account minimums. ● Offers low margin rates up to 49% below what you can find in the industry. ● Delivers IBKR BestXTM to maximize price improvement. ● Helps you earn high interest rates up to USD 4.83%.
| Basic Service Advisory Fee: 0.25% or $4/month. Expert Guidance: 45-minute call with a Certified Financial Planner for $299, or 60-minute call for $399. Premium Service: This is best if you have at least $100,000 in your account. Advisory Fee: 0.65% Expense Ratios: 0.07% to 0.17%. Crypto Portfolios: 1$ management fee on the total portfolio balance.
|
Account Integration | ● Banks ● Tradeware ● InfoReach ● Evare ● BasisCode ● RealTick, and more.
| ● Turbo Tax ● Mint ● Personal Capital ● Plaid ● Wealthfront, and more.
|
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Interactive Brokers vs Betterment: Product Offerings
Interactive Brokers
When it comes to product offerings, Interactive Brokers is a powerful platform that helps you grow your investment journey through a variety of asset classes. You’ll find assets such as:
- IBKR Global Analyst
- Portfolio Analyst
- Bonds Marketplace
- Mutual Funds Marketplace
- No Transaction Fee ETFs
- Investors’ Marketplace
- Short Securities Availability
- Cash Management
- Third-Party Integration
- Interactive Advisors
- APIs
- Margin
- Reporting
Betterment
While considering Interactive Brokers, keep in mind that Betterment has the following product offerings:
- Guided Crypto Investing
- Betterment Checking and Betterment Cash Reserve
- Tax Management Features
- Broad Impact
- Climate Impact
- Innovative Technology
- Goldman Sachs Smart Beta
- BlackRock Target Income
- Flexible Portfolio
Interactive Brokers vs Betterment: Standout Features
Interactive Brokers
Be aware that Interactive Brokers, being a powerful, versatile trading platform, has areas in which it shines its light. The platform:
- Charges low trading fees.
- Provides competitive margin rates.
- Offers different trading accounts you can choose from depending on the kind of investor you are.
- Helps you to access the global market, allowing you to invest in 150+ assets, so you can diversify your portfolio.
- Offers top-notch security measures, helping you to protect your account and trading with confidence.
Betterment
The following standout features make Betterment a great choice if you’re considering a platform to work with:
- Takes the hassle out of investing by automating your portfolio management process.
- Helps you set and achieve your financial goals by personalizing your investments.
- Offers as low as 0.25% management fees per year.
- Comes with cash management features with competitive interest rates.
- Provides robust tools to help you plan your retirement.
Pros and Cons of Interactive Brokers
- Pros
- Comes with an extensive catalog of assets with which you can trade.
- Has advanced tools for carrying out research.
- Allows you to execute quality high orders.
- Makes provision for trading over 19,000 mutual funds with zero transaction feeds.
- Lets you trade stocks, options, and ETFs with $0 commission.
- Cons
- Requires a high minimum account balance before you can earn interest on uninvested cash.
- Has an interface that’s difficult to work with as a learner.
Pros and Cons of Betterment
- Pros
- Charges minimum fee for managing your portfolio.
- Comes with multiple portfolio options.
- Allows you to manage crypto portfolios.
- Has no account minimum.
- Offers fractional shares.
- Provides financial planning tools tailored toward your goal.
- Cons
- Has no direct indexing.
- Has a potentially risky emergency fund portfolio.
Interactive Brokers vs Betterment: Customer Reviews
Customers have different opinions about Interactive Brokers and Betterment, and each of these reviews gives you clues about the platforms’ strengths and weaknesses. In this section, Betterment seems to win the contest, having a higher customer rating than Interactive Brokers.
On Trustpilot, Interactive Brokers has a rating of 3.3 out of 5 stars based on 2k plus reviews. Investopedia rates the platform with a score of 4.7 out of 5 stars. Fortunately, the platform scores excellently on both NerdWallet and Bankrate by scoring 5.0 out of 5.0 star ratings.
On the other hand, Betterment has a rating of 4.8 out of 5 stars on Forbes Advisor, while having 5.0 out of 5.0 stars on Bankrate. That’s not all…the platform also performs incredibly well on NerdWallet with a 5.0 out of 5.0 star rating. You’ll find good recommendations about the platform on Investopedia with a score of 4.7 out of 5.0 star rating. Overall, both platforms are doing well.
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Interactive Brokers vs Betterment Competitors
Charles Schwab (Formerly TD Ameritrade): Choose this platform if you’re considering an advanced platform that offers some of the sophisticated trading tools. While using the platform, you’ll find cutting-edge research tools, suitable for you if you trade futures and options.
Just like many trading platforms, you can trade on stocks, and ETFs without paying any commission. You can gain access to a variety of asset classes, along with high-quality learning materials.
It is important to note that there’s a 0.65 fee whenever you trade options contracts. With Charles Schwab, you don’t have to worry about hidden fees or charges.
Acorns: If you’re just starting your investment journey, and desire an easy way to get started, Acorns might just be your ally. From your everyday purchases, you can invest in spare change. The platform rounds up your money to the nearest dollar. For instance, when you buy a coffee for 4.98, Acorns automatically round it up to the nearest whole number.
With the platform, you have an excellent choice to get a hands-off approach to trading. Unlike some robo-advisors, you can gather machine-generated insights, too.
For pricing, Acorns offers three different pricing tiers. You have the Acorns Bronze, priced at $3/month, Acorns Silver which costs $6/month, and Acorns Gold which is priced at $12/month. For the Acorns Gold, you’re not paying a dime for the first month.
Webull: Consider Webull when searching for a trading platform that caters to different kinds of traders. Whether you’re a beginner or an experienced trader, you can find the platform useful.
Webull offers a wide collection of tools and features with which you can trade different assets. You’ll love the fact that the platform takes no commission from you when you trade on stocks and ETFs.
With Webull, it is easier for you to trade during pre-market and after-hours, thereby. This way, you have an extended time to trade beyond the regular market periods. For every contract when you trade certain index options, you’re paying $0.55. Expect to pay regulatory and exchange fees. Learn more about the platform by getting in touch with its customer support.
Pro Tips
- Improve your expertise in trading loooooong before making any financial commitment so you don’t incur an unnecessary loss of money. It also helps you to know exactly what assets to invest in.
- Leverage all the research tools available on the platform to study the market, vet stocks, and gather useful reports from external tools. This way, you can properly decide on the right assets to trade on.
- Keep a keen eye on your funds and reduce your chances of losing money when you set up stop-loss orders.
- Use a demo account to practice and learn how the platform works. Ensure you’re comfortable with how things are on the interface, and use that period to develop a trading strategy.
- Protect your account security measures you can find. Set up a strong password, preferably, one that has a combination of upper and lower case, symbols and numbers. Also, enable two-factor authentication for added security protocol.
- Tune your dashboard to align with your trading style. Take away widgets you don’t need, adjust the layout, set your monitors how you want them to be, and see data that are most crucial to you.
- Update your privacy and security settings from time to time to keep your account from illegal access.
- Use alert tools to set up signals that give you notifications whenever the market has the stocks or assets you’re interested in.
Recap
As you decide between Interactive Brokers and Betterment, understand that both platforms are uniquely designed and operate differently. While Interactive Brokers caters to active traders seeking advanced investment tools, along with low-cost trading benefits, Betterment focuses more on investors with a long-term horizon.
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