Fidelity vs. Interactive Brokers

Fidelity and Interactive Brokers are both online brokerage services. Fidelity, based in Boston, is one of the biggest names in the financial services industry. The company has many divisions focused on different financial services, including mutual funds, retirement plans, and commercial banking. Interactive Brokers, on the other hand, is based in Greenwich, Conn. It started as a market maker and is now the biggest electronic tracking platform in the U.S. based on daily average revenue trades.

For the retail investor looking to execute trades and start building portfolios, both offer positives and negatives to consider. Interactive Brokers is a public company listed on the Nasdaq, while Fidelity is privately held. 

A financial advisor can help you decide which brokerage offers the best options for your long-term goals. 

Fidelity vs. Interactive Brokers: An Overview

Both Fidelity and Interactive brokers offer a trading platform for retail investors to buy and sell securities. Both platforms have myriad tools available for users to analyze their portfolios and make choices about how they want to develop their investment strategy.

Fidelity is a big firm with various other branches brokerage clients can take advantage of. For instance, there are banking options, so you can have all of the money you plan to invest already in the Fidelity system before you invest it. Interactive Brokers, on the other hand, is basically a brokerage company.

Fidelity also has its own suite of investment products you can choose from, including mutual funds and exchange-traded funds (ETFs). Interactive Brokers does not offer its own investment products; it is purely a platform.

Fidelity vs. Interactive Brokers: Fees

Fees are an important part of choosing a brokerage platform. If you don’t pay attention to the fees you’re paying, you could end up spending much more than you need, eating into the profits you’re hoping to make through your investments.

Fidelity offers no commission trades for stocks, bonds and most mutual funds. The price for trades at Interactive Brokers depends on whether you use its IBKR Lite pricing plan or its IBKR Pro pricing plan. Regardless of which plan is chosen, you can use all of the company’s trading platforms.

Stock and ETF trades are free with the Lite plan. Commissions are $0.0005 to $0.0035 with the Pro-Tiered plan and $0.005 with the Pro-Fixed plan. Bond transaction costs range from 0.002% to 0.1% of the face value of the first $10,000 or first $1 million purchased, depending on bond type. Some mutual funds have no fees.

At both Fidelity and Interactive Brokers, some – but not all – mutual funds come with a fee. Of those that carry a fee, they are $49.95 at Fidelity and the lesser of 3% of the trade value or $14.95 at Interactive Brokers. Options at Fidelity have no commission and a $0.65 contract fee. The per-contract price runs from $0.15 to $0.65 at Interactive Brokers.

Fidelity vs. Interactive Brokers: Features

Both of these organizations offer access to myriad investment vehicles, including thousands of mutual funds and ETFs. Both have no-fee funds available. You can also use either platform to trade stocks and bonds, and both have extensive cryptocurrency investing services. Fidelity even has a presence in the Metaverse if that interests you.

Both companies also offer robo-advisors and portfolio management software. Neither service requires a minimum account size.

Fidelity, unlike Interactive Brokers, does have brick-and-mortar locations. These are available to users of Fidelity Go, the robo-advisor service the firm operates. Interactive Advisors is the robo-advisor affiliate of Interactive Brokers.

Fidelity vs. Interactive Brokers: Advisor Services

Fidelity has an extensive network of financial advisors potential clients can choose to work with. The minimum asset level is $500,000 for access to Fidelity Wealth Management. There is also Fidelity Go, a digital advisory service, available with a minimum of $25,000, and Fidelity Private Wealth Management services for more wealthy clients, with a minimum of $2 million in investable assets.

Interactive Brokers does not have an advisory business but does offer digital advice with themed portfolios — and a minimum of just $100.

Fidelity vs. Interactive Brokers: Online and Mobiles

In this day and age, it is practically a requirement for a financial services company to give customers a robust suite of tools and programs to use both online and on their phones. Both of these companies deliver in this regard. Fidelity has a very complex set of desktop tools. This can be a bit overwhelming for a beginner investor, but if you have a bit more experience, you’ll likely find them very useful.

Interactive Brokers has two available desktop platforms: IBKR Lite and IBKR Pro. The Lite version is more basic and is intended for less experienced investors who don’t frequently make trades. The Pro version is designed for investors with a lot of experience who are frequently making transactions and need more sophisticated tools.

Fidelity has a mobile app that gets 4.8 out of five stars in the iPhone app store and 4.6 on Google Play. The Interactive Brokers app gets 4.5 stars in the app store and 4.6 on Google Play.

Fidelity vs. Interactive Brokers: Investment Products and Asset Classes Available

Both Fidelity and Interactive Brokers provide access to a wide range of investment products, but there are notable differences in their offerings. 

Fidelity is known for its extensive lineup of proprietary mutual funds and ETFs, which appeal to investors who want low-cost, in-house funds backed by a major financial institution. These include index funds, actively managed funds and target-date retirement funds. 

In addition, Fidelity clients can trade U.S. stocks, ETFs, bonds, options and certain international equities. Fractional share investing is also supported, making it easier for smaller investors to gain exposure to higher-priced stocks. Fidelity, however, has limited access to futures and does not offer direct cryptocurrency trading on its brokerage platform, though it has developed crypto-focused services through Fidelity Digital Assets.

Interactive Brokers, by contrast, is designed with breadth and global reach in mind. Through IBKR, investors can trade stocks, ETFs, options, bonds, futures, forex and commodities in more than 150 markets across 30 countries. This makes it especially attractive to active traders and international investors who want access to markets beyond the U.S. 

Interactive Brokers also supports direct cryptocurrency trading, giving clients exposure to Bitcoin, Ethereum and other digital assets through its platform. Unlike Fidelity, it does not have proprietary funds, but its marketplace includes thousands of mutual funds and ETFs from third-party providers. Fractional shares are available here as well, though more commonly used with U.S. equities.

In short, Fidelity’s strength lies in its proprietary funds and retirement-focused investment options, while Interactive Brokers stands out for its global reach and access to niche asset classes like forex and crypto. Your choice may depend on whether you prefer a one-stop shop for retirement and banking services (Fidelity) or an expansive trading platform for global and alternative investments (IBKR).

Who Should Use Fidelity?

Fidelity allows investors to buy and sell stocks, bonds, mutual funds and other equities, all while using an impressive suite of tools and programs.

Most investors, from beginners to seasoned pros will be happy with Fidelity. It will appeal especially to those who want to get all of their financial services from one company, as Fidelity also has advisory and banking services available, in addition to offering its own extensive lineup of funds.

Prices are low at Fidelity, so anyone looking for investing that won’t break the bank with fees should find it acceptable. There are many options available, but most investors would be happy with Fidelity.

Who Should Use Interactive Brokers?

Interactive Brokers is a good option for anyone looking for a simple, low-cost brokerage platform. You can buy and sell just about any security you want. If you have a particular interest in cryptocurrency, the platform does have tools for that.

Interactive Brokers is particularly suited for those who are looking for just an online brokerage platform, not a more full-service financial services institution. That said, there is a robo-advisor service available if that is interesting. Generally, anyone who is somewhat comfortable with investing will be happy with the services provided at Interactive Brokers.

Bottom Line

Fidelity and Interactive Brokers are both strong options for retail investors looking for an online brokerage. Fidelity is part of an expansive financial services company offering services including banking and advising, while Interactive Brokers focuses mostly on brokerage services. Both do offer a robo-advisor product, so if you’re looking for just a little help, they are there for you. If you’re looking for more hands-on assistance with your investment portfolio, consider contacting a financial advisor instead. 

Investing Tips

• If you want a bit more help, consider working with a financial advisor. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
• Want to see what your investment will look like down the road? Use SmartAsset’s free investing calculator to get a sense.

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