Interactive Brokers or IBKR for short, is one of the best low-cost brokerage firm that allows you to invest globally in a variety of asset like stocks, bonds, etc.

For investors, any commission, maintenance fees or custodian fees reduces the profit we make. Using a low-cost brokerage is a priority.

But, more than anything, the reason why I prefer IBKR is because of its security.

Why it matters more than you think: You wouldn’t want to use a brokerage even if it’s free, if your investments are not safe there.

The now disgraced cryptocurrency exchange, FTX, is a good case in point. It was backed by famous institutional investors like Temasek as well as hedge fund titan Paul Tudor Jones. Yet, collapse it did and left its millions of users in limbo.

Similar collapse also happened in the past to stock brokerages. In fact, this is the reason why in the US Securities Investor Protection Corporation was set up:

The Securities Investor Protection Corporation (SIPC) had its origins in the difficult years of 1968-70, when the paperwork crunch, brought on by unexpectedly high trading volume, was followed by a very severe decline in stock prices. Hundreds of broker-dealers were merged, acquired or simply went out of business. Some were unable to meet their obligations to customers and went bankrupt. Public confidence in the U.S. securities markets was in jeopardy.

The same thing happened to Japanese brokerages after their asset bubble burst.

So always ensure that the low-cost brokerage you choose is safe.

For IBKR, they make sure that investors are

protected by the Securities Investor Protection Corporation (“SIPC”) for a maximum coverage of $500,000 (with a cash sublimit of $250,000). In addition, Interactive Brokers LLC carries an excess SIPC policy with certain underwriters at Lloyd’s of London, which extends the per account coverage by an additional $30 million (with a cash sublimit of $900,000), subject to an aggregate limit of $150 million. Futures and options on futures are not covered.

In addition,

IBKR solely acts as a facilitator for client trading and does not make any directional bets. Two of the most significant broker-dealer bankruptcies of the past decade (Lehman Brothers and MF Global) were caused by the risk generated from proprietary holdings.

This makes them much safer than most brokerages out there, especially new brokerages that have not been tested by different market crises.

The only con? Their user-interface isn’t exactly user-friendly… But that is a trade-off I was willing to make for security and performance.

So if you think IBKR is a brokerage that you would like to try, don’t miss out on their Referral program! I missed out on this when I signed up without doing my homework so don’t be like me! (cries)

As I am already a client at IBKR, if you sign up using my referral code, you will receive $1 in IBKR shares for every $100 added to your account, for up to $1000 worth of IBKR shares. The average balance must be maintained for at least 1 year before you are able to sell your IBKR shares.

And because I can only make 15 referrals per year please contact me via the contact form or direct message me on my socials for the link.

When you start your application, you will be notified you are completing an application as a referral.

You will see the following page and just fill up your personal details and you’re on your way!

If you do not receive a notification, this means you are not eligible for this IBKR referral program.

People who are not eligible for the program:

• Residents of Japan, Denmark, Spain, Portugal and Israel are not eligible to participate in the program.
• Residents of Canada are ineligible to earn welcome shares.
• Tax-deferred accounts are ineligible for both the referral bonus and awarding of Interactive Brokers stock.

Disclosure: I may receive $200 if you maintain a balance of >= $10,000 for one year. This will help me sustain this page!

That said, I only use affiliate links for products that I actually use and find valuable. Which means there isn’t a lot of choices for me to make money from.

So I really appreciate any kind of support!

Feel free to drop me a message if you have any questions!

Read more:

• This is How Much You Can Make Doing Nothing Everyday

• The Money Lesson From Warren Buffett’s One Million Dollars Bet

• Here’s How Much it Costs to Buy T-bills versus SGOV ETF on IB

• How to buy SGOV on Interactive Brokers for Beginners

 

Disclaimer:

Investing decisions are personal. Depending on your personal circumstances and preference, what works for others might not work for you. Be responsible for your own investments. Always invest according to your own needs and preference.