What are the differences between eToro and Interactive Brokers? When it comes to trading, you will need to have a reliable and efficient trading platform.
A lot of your success and its rate will depend on the particular platform you choose in the end. For that, you should not go with the brand and the promises made by the platforms in their ads.
In fact, you should tally their respective features, facilities offered as well as their pros and cons to make a proper comparison between the two platforms.
You will get to trade with different types of financial instruments over and above crypto on these two platforms, eToro and Interactive Brokers.
However, these two platforms come with significant differences in their features and functionalities, just like any other trading platforms in the market.
It is these differences that you should know about if you want to make a more appropriate choice for your trading ventures and to achieve your preset goals.
This article enumerates all those differences, both the major ones as well as the less important ones, to enhance your knowledge about these two exchanges.
Based on different aspects such as their licensing and regulations to instruments supported, from the fees and commissions charged by each to the minimum requirements, you will have an in-depth insight about these two platforms to make your final choice.
- 10 Differences Between eToro and Interactive Brokers
- Which is Better – eToro or Interactive Brokers?
10 Differences Between eToro and Interactive Brokers
Interactive Brokers and eToro platforms have been in the market for quite some time now allowing traders to trade on different products and make profit.
However, to choose one among the two is not an easy task and will need some time and effort for a proper and thorough research.
If you want to skip the research part, here are the few differentiating factors that you should know.
1. Regulation and Licensing
The Interactive Brokers platform has more than one and different licenses in the Tier 1 category which are considered to be the marks of high trust.
These licenses include that of the ASIC or The Australian Securities and Investment Commission to operate in Australia, the IIROC or The Investment Industry Regulatory Organization of Canada which is the regulator for the Canadian province, the SFC or The Securities Futures Commission to operate in Hong Kong, the JFSA or The Japanese Financial Services Authority to operate in Japan, the MAS or The Monetary Authority of Singapore to operate in Singapore, the FINMA or The Swiss Financial Market Supervisory Authority to operate in Switzerland, the FCA or The Financial Conduct Authority to operate in the United Kingdom, and the CFTC or The Commodity Futures Trading Commission to operate in the United States of America.
On the other hand, the multi-asset platform eToro that allows investing in crypto assets and stocks as well as trading CFDs has only two Tier 1 licenses and one Tier 2 license.
These are the ones from the ASIC and the FCA Tier 1 licenses and also from the CySEC or Cyprus Securities and Exchange Commission to operate in Cyprus.
2. Tradable Symbols and Forex Pairs
Considering all of the financial instruments that the Interactive Brokers platform supports, you will get a couple of hundred more than seven thousand total tradable symbols and more than one hundred forex pairs.
On the other hand, the eToro platform allows their users to trade with a little more than three thousand tradable symbols and a little less than fifty forex pairs in total.
3. Instruments Supported
Both these platforms being multi-asset platforms, they support a few common and a few unique instruments. The users of the eToro platform can trade with stocks, CFD, forex, and crypto assets.
In contrast, the users of the Interactive Brokers platform can not only trade with stocks, CFD, forex, and crypto assets like the eToro users on this platform but they can also try their luck out in futures, e-minis, and options trading.
4. Funding and Its Methods
The eToro platform has a minimum deposit requirement of 200 dollars in general and 50 dollars for the US customers.
The platform allows making deposits or withdrawals by using a MasterCard or Visa credit card or debit card, bank transfer, PayPal or Skrill. As for the payment processing time, it usually varies.
However, in comparison, the Interactive Brokers platform allows only bank wire transfers though there are no minimum deposit requirements and the payment processing time is usually of one business day.
5. The Payment Methods
The payment methods accepted by Interactive Brokers include ACH transfer, credit card, JCB card, check, Apple Pay, Google Pay, MasterCard, and Samsung Pay.
On the other hand, the eToro platform also supports Apple Pay and JCB card like Interactive Brokers but also accepts payments made through wire transfer, BPAY, Neteller, Diners Club, PayPal, Perfect Money, Skrill, Swift, Rapid Transfer, UnionPay, Webmoney, Venmo, Visa, and Yandex Money.
6. Trading Tools
Both these platforms offer multiple trading tools to help you in your efforts. However, the numbers vary. On the Interactive Brokers platform you will find nearly five hundred watch lists of total fields, more than 120 charting indicators in total, and as many as 7 drawing tools.
One tool that is exclusive to this platform is the Trade from Chart tool. As for the mobile trading aspect on this platform, you will get almost one hundred charting indicators and a forex calendar as well to help in your trading strategies.
On the other hand, the eToro platform offers only six watch lists, almost half charting indicators but nearly double drawing tools in number in comparison to Interactive Brokers.
Their Copy Trading tool is also unique which allows users to follow ans copy the trading strategies of some of the most successful traders in the social community. If you compare the mobile trading features of eToro, there are only 5 charting indicators available to the users of this platform.
7. The Safety Aspects
If you consider the safety aspects of these two platforms, you will find that Interactive Brokers is a platform that is listed on the stock exchange, which means it follows the desired standard to ensure safety of the platform.
It is also regulated by some of the top-class financial authorities and offers negative balance protection to the users.
In comparison, though eToro also offers negative balance protection and makes all financial information available publicly, most of its clients belong to the top-tier financial authorities.
This also signifies that the safety aspect of this platform is reasonably good. However, this platform is not listed in the stock exchange and also does not hold any banking license.
8. Language Supported
While offering reasonably good customer service the eToro platform supports different languages such as English, German, French, Spanish, and Italian.
However, the languages in which support to customers is provided by the staff of Interactive Brokers include English, French, Dutch, Spanish, Italian, Russian, and Chinese and Japanese languages like Mandarin, Cantonese, and Nihongo respectively.
9. Pros and Cons
Ideally, if you consider the pros and cons of the two platforms, it will surely help you in differentiating which among the two is better suited for your crypto needs.
The eToro platform is best suited for those users who are looking for a platform to trade stocks and ETFs for free and one that also offers a seamless social trading and account opening experience.
As for the downsides of this platform it has a lofty non-trading fee. Moreover, it offers only one account base currency and the customer support has a lot of room for improvements.
On the other hand, Interactive Brokers is a platform that is designed to offer the users with a wider and more diverse range of products and research tools along with pretty low trading fees.
However, users of this platform will find its account opening process to be quite complicated. Also, the desktop trading platform is quite complex and the customer service seems to be understaffed to get the right support at the right time.
10. A Few Other Worthy Differences
Here are a few other differences between Interactive Brokers and the eToro platform that are worthy enough to know and which will help you in differentiating the two.
The Interactive Brokers platform has been around in the market for a much longer time as compared to eToro. It was established in 1977 while eToro was launched in 2007. The headquarters of eToro is located at Limassol in Cyprus while that of Interactive Brokers is in London, England.
Though both are authorized to operate in the European Union, Interactive Brokers is a good option for the larger traders only being a publicly traded or listed company.
The minimum deposit requirement for Interactive brokers is $10000 which is exceptionally high as compared to that of eToro which is $200 for general users and $50 in the US. And, as for the minimum trading amount it is $100 for Interactive Brokers and just $1 for eToro platform.
As for the fees and commissions charged by each platform, eToro charges a withdrawal fee but no commissions while Interactive Brokers does not charge any withdrawal fee but charges commissions.
Both these platforms allow trading multiple assets and come with several useful features, some of which are common for both.
The common ones include forex and CFD trading, US and International stock CFD trading, and physical crypto coins. As for eToro platform, it also supports CFD trading of cryptocurrencies and social trading or Copy Trading feature.
The Interactive Brokers platform also supports the Windows desktop version, which adds to its utility, while eToro does not.
As for the accounts, the Interactive Brokers platform does not support any Islamic Account like eToro does.
However, it does support a variety of currencies such as USD, EUR, AUD, INR, GBP, CAD, JPY, SEK, CHF, NOK, and DKK as opposed to USD supported by eToro.
If you consider the coins supported by these two platforms, there is also a significant difference in the numbers. While the Interactive Brokers platform supports BTC, LTC, ETH, and XRP, the eToro platform on the other hand supports all of them apart from BCH, DASH, ETC, ADA, EOS, NEO, MIOTA, XLM, VET, ZEC, and BNB. This offers the users a larger crypto variety to choose from.
In order to provide more support to the clients, the respective platforms host some of the best yet different trading platforms. As for Interactive Brokers it enables its users to trade with FX-Trader, Web Trader or SerSart, and Trader Workstation.
Their offer is further supported with one-click trading, pending orders, trailing stop, and browser-based platform. In contrast, the eToro platform offers its users to trade with eToro Mobile Trader which supports one-click trading and mobile trading.
As for the other features of these two platforms, while you will get an Android app in eToro, there is no such app included in the features of Interactive Brokers. But then, the features of Interactive Brokers support scalping stock trading and hedge trading unlike eToro platform.
If you want to have better research options offered by a platform then it is Interactive Brokers that will be a better platform to go with.
While eToro offers only shares trading research and portfolio allocation percentage breakdown as a bullet list or a pie graph, the research options offered by Interactive Brokers include everything for every instrument for trade as well as research reports, analyst ratings, and articles.
Which is Better – eToro or Interactive Brokers?
Given the fact that both the platforms eToro and Interactive Brokers have different features and functionalities apart from a few similar ones, it will be unjustified to say one is better than the other.
Moreover, such a selection is primarily based on what you want to trade, how you want to trade and what you want to achieve.
Typically, the Tel Aviv based eToro company enables its users to trade on different instruments which includes more than two hundred and fifty stocks, currencies and CFDs.
With all these possibilities offered, there is no doubt why this platform has more than 6 million users as of this year all over the world.
On the flip side, Interactive Brokers is also a good and reliable online trading service provider that offers trading with forex, ETFs, and others.
However, the minimum deposit requirement on this Financial Conduct Authority regulated platform is pretty high.
If you want to make your choice based on the reliability quotient, then both these platforms are quite reliable.
Though Interactive Brokers have been around in the market for nearly three times as long as eToro, the fact that both hold the money of the customers in separate Tier 1 bank accounts make them equally reliable.
And, there has not been any report of any fines or penalties imposed on these two platforms in the past five years which is also a mark of its security and dependability.
However, you will not get any assistance from the expert advisors on eToro just as you would while trading on Interactive Brokers.
When you use the eToro platform you will be able to automate your trades by using its exclusive Copy Trading feature. As stated earlier, this feature will allow you to follow and copy the strategies of the profitable traders and open or close trades just like they do, automatically.
This feature will also offer different trading signals to help you in social trading as well. All these are not available in the Interactive Brokers platform.
While on eToro you can get the benefits of social trading which will not only allow you to engage in a discussion with the community but also allow you to follow the trading activity and copy the trades of other successful traders.
The Interactive Brokers platform will provide you with more than a hundred charting indicators and 7 charting drawing tools but eToro on the other hand will offer 66 charting indicators and 13 charting drawing tools.
Therefore, in spite of the difference in their numbers, both these platforms will offer adequate help to the users while trading.
As for support provided to the enquiries of the customers, both offer live chat, phone, and email support but the languages in which the support is provided are much more in the case of Interactive Brokers platform.
If you want to know for whom these two platforms are best suited for in just a few words then here it is:
- Interactive Brokers is a good platform for those traders who want to trade at low fees but in a very proficient trading environment and, in contrast,
- The eToro platform is a very good one for those traders who are interested in social trading or copy trading along with stock trading with no commissions from one single platform.
Now, it is up to you to make the final choice as per your needs, and, most importantly, according to the given circumstances.
Traders who want a wide variety of financial instruments to trade, eToro is a better option for them but for low spreads on currency pairs, Interactive Brokers is more fitting. Other differences in this article will help you make the right choice.
I have special interest in crypto and intend to help common people to gain knowledge about the digital asset as well as its potential. Follow Me at Linkedin.