The best financial services for your money!

Download this e-book and optimize your finances and save money by using the best financial services available in Switzerland!

Download The FREE e-book

How to Open an Interactive Brokers Account in 2024?

Baptiste Wicht | Updated: |

(Disclosure: Some of the links below may be affiliate links)

Interactive Brokers is an excellent broker from the United States. It is known for its cheap fees and unique investment product range. It is being used by many personal finance bloggers, for instance.

It is currently the best broker that allows access to U.S. ETFs. And U.S. ETFs are the most efficient ETFs for Swiss investors.

In this guide, I review how to open an Interactive Brokers account. It is not very difficult, but there are a few things you need to know before you start your application. And I also teach you how to optimize your account to save money!

Interactive Brokers

The best broker
Interactive Brokers
5.0
No custody fees

The broker you need to buy stocks and ETFs reliably and at extremely affordable prices. Trade U.S. stocks for as little as 0.5 USD!

Pros:
  • Extremely affordable
  • Wide range of investing instruments
Invest your money Read My Review

So what is Interactive Brokers (IB)?

IB is a brokerage firm from the United States. It was created in 1978 in New York, more than 40 years ago! IB is the largest brokerage firm in the United States and the leading foreign exchange (forex) broker. Interactive Brokers offers access to many instruments, such as stocks, bonds, options, futures, and more.

Interactive Brokers is a very well-known broker with an excellent reputation. It is known to be cheap compared to its competitors. I have already compared IB and DEGIRO in the past. This comparison showed that it is even less expensive than DEGIRO, the broker I used before.

An essential thing with IB is that, by default, they do not lend your shares to other people, such as DEGIRO does by default. But you have the choice, which is good! Indeed, you also can lend shares, and you will get some of the money from the lending.

If you want more information on IB, read my review of Interactive Brokers.

Why open an IB account?

So, why did I open an IB account? It is currently the best broker available to Swiss investors.

There are many reasons to prefer Interactive Brokers over other brokers.

  1. IB offers access to U.S. ETFs to Swiss investors, while many brokers are not.
  2. IB has excellent prices.
  3. IB offers access to many investing instruments.
  4. IB offers foreign exchanges at an excellent price.
  5. IB has an excellent reputation.
  6. IB has good financial strength.

So, we will see how one can create an account on IB.

Create an Interactive Brokers account

First, prepare some time in front of you. The account creation process on Interactive Brokers is not difficult, but it will take some time. You will need to answer a few questions, and you will need to wait a day for your account to be funded.

Interactive Brokers has several entities in Europe. The primary entity is IB UK, but one is in Luxembourg, and one is in Ireland, for instance. For Swiss investors, the best entity is IB UK because they offer access to a Swiss IBAN and give you access to US ETFs. For European investors, it does not make much of a difference.

First, go to the account creation page and click “Open account”.

Start opening an Interactive Brokers account
Start opening an Interactive Brokers account

On the first page, you must enter your email, user name, and password for the account. Make sure to choose a good password and user name.

Start filling up your Interactive Brokers account
Start filling up your Interactive Brokers account

I would recommend making your password at least 20 characters long. A long password is essential to secure your online accounts! Make sure to remember it correctly as well!

You also need to enter your country of residence. If your country of legal residence differs, you must also enter it. You can then confirm the first page.

At this point, they will email you to confirm your email address. Just check your mail and choose to continue the application.

Personal information

On the second page, you will have to set your account type. I put it to Individual for this example. You can check the kinds of accounts to ensure you choose the one according to your needs. But most people will want either an Individual or a Joint account.

Then, you will have to enter the general kind of personal information. Nothing is special here, only what you are used to entering on each website. You will have to set your addresses as well.

Since this will be related to your taxes, it is essential to enter them correctly. You will also need to enter a valid phone number. IB will use this phone number authentication, so once again, enter it correctly.

IB has several types of accounts. You will need to select the type you want. The primary type of account is a Cash account, which is the type you probably need. A cash account means you need to have the money before each trade.

There are also Margin accounts (IB has some good information about margin accounts). Margin means you can use leverage for investing with money you do not have. Unless you know what you are doing, I recommend a Cash account.

Another thing you need to configure when you create an IB account is the base currency. Since I make most of my payments in Swiss Francs (CHF) and live in Switzerland, I chose CHF as my base currency.

You can always convert money from your base currency to any other currency. The base currency only matters for the interface’s display. If you choose CHF, you can still transfer USD and buy shares in EUR, for instance.

Currently, the CHF balance has a positive interest rate. If it becomes negative again, you will see a warning about the negative interest rate on CHF balances. You can get the current negative interest rate and limit here.

Now, you will also have to set up three security questions. You will need these questions if you ever need to recover your account. Make sure you choose questions from which the answer is not ambiguous (but not easy to find)! This procedure is, once again, a standard procedure.

Investment Questions

After this, you need to answer questions about your finances.

You need to tell how much your net worth is and how much income you have. You also need to say what your objectives are for your investments. For instance, you may want to invest for capital appreciation or fixed income.

All this information is here for regulatory reasons. I would advise you to answer them with honesty.

You also need to set which instruments you need to invest in. For instance, if you want to invest in stocks and bonds, you must select these options. I only chose stocks.

Stocks, bonds, options, and futures are among many other choices. You must also select which country (stock market exchange) you want to invest in.

You also need to confirm your phone number with a code.

Confirmations

At this point, you must agree to all the rules IB has for trading. Ideally, you may want to read them. But you probably will not!

If you want, you can also join the Stock Yield Enhancement Program. This program will allow IB to lend your shares to other people. With that, you will receive half of the profits.

Of course, there is a slight risk to that, and you may also be unable to sell your shares when you want or need to. I am not using that feature now. But I have tested this feature recently, and it works well.

At this point, Interactive Brokers will want proof of your identification. For this, you can upload a driving license, an ID card, a passport, or an alien ID card for IB to confirm your identity. You will also have to enter information about your tax status on the same page.

You will also have to fill in information about your employer and job. Usually, you also need to submit something as proof of address.

Fund your IBKR account

IB will fully activate your account once they receive funding.

You need to deposit the first amount for IB to validate your account. First, you need to declare how much money you will deposit. Then, IB will give you all the information necessary for the payment.

Make sure you correctly copy the IBAN. With banking transactions, you should always double-check all banking information before transferring. The transfer will be free since they have a bank account in Switzerland!

And do not forget to include the “Further Benefit to XXX” line! Otherwise, the money will not go directly to your account, and you must contact them to fix the issue. You must do that for all future deposits to your Interactive Brokers account.

Finalize your account

After you have funded your account, you can still do a few more things.

First of all, you can configure the market data. You should set your market data status to non-professional. And you should check that you are not buying any market data. Unless you plan to day trade, you do not need this data. You do not want to pay for it.

One great thing is that you have to use two-factor authentication (2FA). You have no choice. You must configure your mobile phone to use it as 2FA.

2FA is an essential part of online security. First, you need to install IBRK Mobile on your phone. This application is available for Android and iOS.

Once you have installed the application, you can register it as a two-factor authentication for your account. You will have to log in with your username and password, and you need to enter the code you received by SMS.

Finally, you can then choose a PIN for your future two-factor authentication. Remember that PIN since you must use it for each connection to Interactive Brokers.

If you do not know about 2FA and why it is necessary, read my article about online personal finance and security.

Wait for your account

At this point, you only need to wait for IB to create and fund your account.

It should not take too long. It only took one day for my account to be created and funded. It is pretty fast. The next day, I could directly make my first trade.

Optimize your IBKR account

Now that you have access to your account, there are two more things to finalize in your account.

The first thing remaining at this point is configuring the Pricing System. I recommend you use the Tiered Pricing system. IB is cheaper than DEGIRO when you use the Tiered Pricing system.

You can make the change in your Account Settings. If you prefer the more predictable Fixed Pricing, you can also opt for it. There are some cases where fixed pricing is cheaper than tiered pricing.

Here are my settings just before I made the change to Tiered pricing:

Interactive Brokers Account Settings
Interactive Brokers Account Settings

The second thing applies if you are a Swiss investor and will invest in U.S. ETFs. In that case, you need to fill out the W-8BEN form. That is pretty simple. You can go into your Account Settings. Then, you must click the (i) blue button next to your name below Profiles. Then, you can click on “Update Tax Forms”.

They will then take you through the process, and you can fill out the W-8BEN tax form. This form will halve the dividend withholding from your American stocks and ETFs. This step is essential if you want to profit from the great tax efficiency of U.S. ETFs.

Some people have told me that it sometimes takes about one day for the account currency to be changed on the interface. You have to wait one day, and the issue should disappear. In the meantime, you may see some numbers in other currencies (likely GBP).

Another thing you can choose to do is to allow IB to lend your shares. By doing so, you will get 50% of the profits. This feature is called the Stock Yield Enhancement Program. However, there are some risks. I have tried it on and off over the last few years, but whether you think it is worth it is up to you.

Conclusion

The best broker
Interactive Brokers
5.0
No custody fees

The broker you need to buy stocks and ETFs reliably and at extremely affordable prices. Trade U.S. stocks for as little as 0.5 USD!

Pros:
  • Extremely affordable
  • Wide range of investing instruments
Invest your money Read My Review

The procedure is now complete! If you followed this guide, you now have an Interactive Brokers account.

With this great broker, we have access to U.S. Exchange Traded Funds such as VT, which makes the most significant part of my portfolio.

I have now been using IB for more than two years. And I am delighted with IB. Interactive Brokers is the best broker available to Swiss investors.

The next step is now to buy an ETF from Interactive Brokers. It is also relatively simple and only takes a little time.

What do you think about Interactive Brokers? Do you already have an account? If not, which broker are you using?

The best financial services for your money!

Download this e-book and optimize your finances and save money by using the best financial services available in Switzerland!

Download The FREE e-book
Photo of Baptiste Wicht

Baptiste Wicht started thepoorswiss.com in 2017. He realized that he was falling into the trap of lifestyle inflation. He decided to cut his expenses and increase his income. This blog is relating his story and findings. In 2019, he is saving more than 50% of his income. He made it a goal to reach Financial Independence. You can send Mr. The Poor Swiss a message here.

Recommended reading

385 thoughts on “How to Open an Interactive Brokers Account in 2024?”

  1. Hey Mr. Poor Swiss!

    A silly question, but I couldn’t really find an answer anywhere on the web. I would like to open an account on Interactive Brokers. I realized there are at least two domain names:
    interactivebrokers.com
    interactivebrokers.co.uk

    Does it matter, where I open an account? (The jurisdiction changes?)

    Thanks!

    1. Hi Chris,

      As a Swiss investor, you will have to use IB UK to create an account. I think you can’t even use COM and they would redirect you to UK (or another European entity).
      It does matter since the local rules will matter. But UK is the best for Swiss investors.

  2. Hi Mr TPS,

    I am an EU citizen currently resident in Switzerland and I would like to start investing on IB. Let’s say I invest for 5 years and then I move back to an EU country. Would that change my investment with them in any way? Would I need to liquidate? Or can I just keep adding money in EUR to it from my next country?

    Thanks

    1. Hi Riccardo,

      There is one thing that could change: You may lose access to US ETFs if you leave Switzerland for another country, for instance in the EU. In that case, you will not be able to buy more US ETFs And you will have to buy EU ETFs instead. But you should not be forced to liquidate, you just won’t be able to buy more.
      Other than that, you should be fine I believe, but I have not done that myself.

  3. Hi The Poor Swiss,

    Greetings from another Switzerland living FIRE/personal finance enthusiast!

    I’m planning on changing my main brokerage to IB from Degiro this week so I’ve been reading up on your various articles about them. (Also about buying the US domiciled funds, I’ve been buying the Irish ones till now).

    I was wondering though do you have a referral link with them for me to open my account with? It seems they have a good offer at the moment for referrer and referred(I’m not entirely sure whether that’s for US customers only though). Let me know if you do!

    While I’m here I’d just like to say thank you for all your great content, I’m so grateful for all the useful info I’ve gotten from this blog and I’m always entertained to follow your story. Keep up the good work!

    All the best!

    Sean

    1. Hi Sean,

      I believe that’s a good choice!

      The link presented in this article (this one) is a referral link, but I do not remember what it gives to referee and it’s not great for me either. The other one is for friends and family I believe, so I can’t show it on this blog. But you can contact me if you want and I will give it to you, you can get some shares of IBKR.

  4. Hi Mr TPS,
    I just tried opening up an account on IB and while talking to the support they tell me that Swiss resident are having “IB-UK” accounts and that these accounts do not allow for “MiFID Retail” investors (e.g. private investors) to trade US ETFs.

    Apparently, as Swiss resident we are assigned automatically to IB-UK accounts and thus need a “MiFID Professional” categorization to trade US-based ETFs.

    How did you get around that?

    Thank you for your help!
    Tim,

    1. Hi Tim,

      That’s correct, Swiss investors work with IB-UK. And IB-UK does not allow MiFID retail investors to trade US ETFs.
      However, Swiss residents are not MiFID retail investors. This law does not currently apply to us since we are not part of the European Union.
      So, you should be fine :)

      1. Thanks for your prompt reply!

        Do you happen to know which categorization applies to Swiss resident then?

        I guess IB support is not aware of these subtleties as they assured be 3 times that I was not eligible to US ETF as Swiss resident *are* MiFID Retail investors.

      2. Hi Tim,

        We are subject to the FINSA regulations, but I do not think we have a special status on IB.
        The support is indeed pretty bad about mifid and Brexit. The problem is that they are trained well for Europe, but they think that Switzerland is inside the EU.

    1. Hi nathalie,

      IB has support for many OTC trades. You just need to go into your account and enable the necessary permissions.
      But I have no experience in OTC trading nor do I want any experience there.

      1. Thank you very much for your answer.
        So glad to hear that there is a possibility to trade OTC ticker.

  5. Hello Stephen,

    Very useful all your blog articles. A big thank you!
    Being a resident in Switzerland and not US citizen, is it possible to have an account in US brokers such as TDAmeritrade or ETrade?
    Any issue with Swiss Taxes?
    Thank you

    1. Hi Fabio

      (I am not Stephen)

      Some US brokers will accept you yes, but not all. I heard that some Swiss investors are using TDAmeritrade.
      I don’t think it makes a difference with Swiss taxes.
      IB is a U.S. Broker even though we mostly deal with the U.K. side.

  6. Hi Mr Swiss,
    Thanks for your blog.
    I created an account on IB and it was very fast.
    I want to fund it with CHF but they only send me a german IBAN at JP Morgan. They also send me the name of the correspondant swiss bank (UBS) but only with an account number but no IBAN.
    I asked the swiss IBAN throug private message and I was wondering how did you get it.

    Best regards

    1. HI Dan,

      At IB, CHF has a negative interest rate starting from a 50K balance. But USD does indeed have a positive interest rate. But I almost don’t keep any cash at IB, so I don’t really care about that. And it should be the same for most people.

      1. Oh! Seems like I might have misunderstood, then. Anyway, you’re right, if it’s only in there a day or less then it shouldn’t be a significant loss.

        Thanks for the blog, I appreciate it!

      2. Yes, one day at negative interest should not be an issue. And this can be avoided by sending money over several times and investing directly, but this is obviously more troubles :)

  7. Hi Mr. The Poor Swiss
    Greatly appreciate your excellent blog and advise.
    After trying to open an IB account I got a cumbersome request for documentation of „spousal income“, „source of your funding“, „source of your income“ etc. I am not comfortable to provide this information to a foreign entity and do not understand what purpose this information request has. To buy regularly ETF funds I have to give up tax information to a broker? Is this normal? Thanks for your reply. Orlando

    1. Hi Orlando,

      I don’t know how normal it is, but they indeed ask you many things of that sort. This is for regulations reasons so that they do not allow people to invest that should not invest which then could backfire to them.
      Now, if you do not trust them with this information, you should probably not trust them with your money either.
      I personally trust them with my money, so I do not mind giving them this information.

  8. Hi Mr TPS,
    Am new to investments and am trying to open an account with IB. It refused my Swiss ID as my family name was different (recently divorced and took back my name but my Swiss ID still has the old one). So I’ve just sent my British passport instead (wish has the correct name) since I couldn’t change the name on the account once done.
    But now am thinking…will I be able to invest as a Swiss investor or will I be regarded as a UK one?
    Another question: is there a minimum amount of deposit to transfer to IB when you open your account?
    Thanks!
    Nath

    1. Hi Nath,

      That’s a good question. I am not sure, but I would think that residency is what matters, so you should be fine as long as your address is in Switzerland. However, they may ask you for proof of residency.
      No, there is no minimum fortunately :)

      1. Hi,

        I may be having a similar issue. I am a Canadian in Switzerland (I sent proof of residency) and IB have given permission for only non US funds (so not Vanguard) which is why I signed up. Could that be for another reason other than non Swiss passport holders?

        Jason

      2. Do we have any confirmation about what non-Swiss-passport holders residing in Switzerland can buy in IB? I was thinking of opening and account and invest in US ETFs so it is a bummer if this is only allowed to Swiss nationals. Thanks for any further insights!

Leave a Reply

Your comment may not appear instantly since it has to go through moderation. Your email address will not be published. Required fields are marked *