What is Interactive Brokers (IB)?

How can one open an account with Interactive Brokers (IB)? If you're looking to invest in stocks, where do you start?

In this article, I will share a step-by-step graphical tutorial on how to open an account with one of the largest online brokerage platforms - Interactive Brokers (IB).

Don’t miss out if you’re interested in safe, low-cost investment opportunities in global stocks and bonds!

What is Interactive Brokers? 

Interactive Brokers, listed on the US Nasdaq Stock Exchange (ticker: IBKR), is an international corporation regulated by the US Securities and Exchange Commission (SEC).

Known as IB or IBKR, it operates the largest electronic trading platform in the United States by the number of daily average revenue trades. It's widely regarded as one of the historically renowned online investment broker platforms, offering competitive rates compared to other cheap brokers and low-fee brokerage platforms.

Speaking of IB pricing or IBKR pricing, IB basically offers no custodian fees and the required minimum deposit for a basic cash account is $0. Therefore, Interactive Brokers stands out as a cost-effective choice for investors.

What is Interactive Brokers used for?

Investors using IB can access over 200 countries and regions, 150 investment markets, and 27 currencies globally. IBKR reviews are quite positive because it offers low custodian fees and provides access to a wide variety of exchanges worldwide.

In many brokers' reviews, IB is widely regarded by investors for its competitive pricing and diverse range of investment products.

Investors can easily open an Interactive Brokers online investment account, gaining access to a wide range of investment opportunities across global exchanges. With its commitment to security, Interactive Brokers provides a safe and reliable trading environment.

Interactive Brokers sign up referral bonus is up to $1000

With Interactive Brokers (IB), you can now enjoy exciting referral bonuses. IB offers a lucrative sign-up referral bonus of up to $1000.

Simply click on the Interactive Brokers referral link, create an IB account, and after finishing your Interactive Brokers registration, you can earn up to $1000 USD through IBKR referral bonuses!

How you earn it from IBKR referral bonus? 

Earning the IBKR referral bonus is simple. All you need to do is use my IB referral link to create an account and deposit $10,000 USD within 30 days of account opening (in the form of stocks or cash), you will receive the IBKR referral bonus. 

How much can I earn from IBKR referral bonus? 

The IBKR sign-up referral bonus offers a potential reward of up to $1000. Once you click the link and register, for every additional $100 USD net deposit balance into your account, you will receive $1 worth of IBKR stock. The maximum amount of IBKR stock you can receive per account is $1,000 USD.

How long can I get the IBKR referral bonus? 

You can get the referral bonus's gifted stock immediately, but you cannot sell the gifted IBKR stock until a year later. Additionally, the value of the gifted IBKR stock will adjust daily based on the net deposits in your account (deposits minus withdrawals).

This means you need to maintain at least a $10,000 net deposit balance for a year. If you don't withdraw your money, you are still qualified for the referral bonus even if your balance decreases due to a poor investment. After a year, you can sell the stock and get the real money back. (Think of it as Interactive Brokers giving you a 1% annual return!)

Interactive Brokers open account requirement: a beginner's guide 

In this Interactive Brokers beginners guide, I'll walk you through the key requirements and steps to open an account, ensuring you can begin your investment journey smoothly.

Who can open an Interactive Brokers account? 

Interactive Brokers has four account options to apply for the account: 

• Individual Investor or Trader
• Family Office
• Non-Professional Advisor
• Small Business

For most people, we will choose to open an Individual account. 

Check if Interactive Brokers is available in my country? 

Before you start registering the IB trading account, you need to check the availability of Interactive Brokers in different countries. Apart from the USA, there are plenty of countries that can use IB. You can check the information on IB’s Available Countries and Territories website.

Interactive Brokers account open requirement

To create an IB account, different types of accounts require different documents. However, everyone needs to provide the following:

• Email address
• Personal mobile phone number
• Proof of address
• Proof of identity

Additionally, different countries might require different documents.

For U.S. residents opening an IB USA account, you will need:

• Your Social Security Number (SSN) or proof of ID number if not a U.S. citizen
• Your employer's name, address, and phone number
• Bank or 3rd party broker account number

For non-U.S. residents applying to open an IB account, you will need:

• Passport or ID card

To know more about the required documents, please check IB’s "What You Need for the Application" website.

Tutorial of Interactive Brokers open a new account 

1. Step 0: Pre-account opening information confirmation 
2. Step 1: Claim your IB account opening referral bonus 
3. Step 2: Creating your Interactive Brokers account
4. Step 3: Choose Your Interactive Brokers account type
5. Step 4: Interactive Brokers account personal information
6. Step 5: Select trading account and trading products 
7. Step 6: Sign the trading agreement
8. Step 7: Confirm your tax residence (non-U.S. resident)
9. Step 8: Sign the trading agreement
10. Step 9: Verify identity and address(non-U.S. resident)
11. Step 10: Receive the account approval notification

Here, I will provide a detailed, step-by-step graphical tutorial on opening an Interactive Brokers account.  For non-U.S. residents, there are two additional steps: confirming your tax residence and verifying your identity and address.

0. Documents and information

In the past, Interactive Brokers had a minimum deposit threshold of US$10,000. However, since July 2021, IB has removed the minimum deposit threshold and eliminated monthly custodian fees.

IB Account Minimum Age Requirements:

• Margin Account: 21 years of age
• Cash Account: 18 years of age
• IRA Account: Available only to individual U.S. citizens living anywhere and U.S. resident aliens.

Normally, we will open a margin account.

Recommendation:

If you're new to investing and unfamiliar with how margin accounts operate, it's advisable to open a cash account instead. Avoid engaging in "borrowing money" or "margin trading" without sufficient knowledge.

Required Information for Creating an IB Account:

• Email address
• Residential address
• Cell phone number
• Tax identification number

1. Claim your IBKR sign up bonus

Simply click on the Interactive Brokers referral bonus link, to make sure you earn the referral bonus after signing up for the IBKR account.

2. IBKR create account 

After creating your Interactive Brokers account, you have the flexibility to set up multiple accounts or sub-accounts under a single main account.

Steps to Create Your Account:

1. Create Your Username and Password

   • First, you need to create your username and password.
   • If something goes wrong during the account opening process, you can click on the lower left corner to continue the account opening or log in directly on the IB official website with the created username and password to continue the account opening.

1. Verify Your Email

   • Go to the email address you just entered to receive the verification letter.
   • Find the letter from Interactive Brokers Client Services in the email, open it, and click "Confirm Email".
   • If you don't see this letter, you can search for it in "All Mail".

3. Choose your IBKR account type 

Choose Your Account Type

After verification, you can choose one of four types of accounts according to your needs. IB can open these four types of accounts:

• Individual
• Joint
• Retirement Account
• Custodian Account

Here we will show you how to apply for an "Individual Account".

Choose Your Service Plan (Available in North America)

When opening an account with Interactive Brokers, United States residents have the option to choose between two service plans: IBKR Lite and IBKR Pro.

Note:

• IBKR Lite: Offers commission-free trading on U.S. listed stocks and ETFs​
• IBKR Pro: Offers two different pricing plans:
  • Fixed Rate Pricing: Up to 0.005 USD per share.
  • Tiered Pricing: Costs vary based on trading volume and other factors.

Non-U.S. Residents: Only have access to the "IBKR Pro" service plan. Therefore, during the application process, non-U.S. residents will not see this step.

If you are a U.S. resident, you can choose “IBKR Lite”.

Finally, choose your input language as “English”.

4. IBKR account personal information 

Enter your contact information

The contact information here is the information of the account holder. You cannot use someone else's bank account to help you deposit money, or withdraw money to someone else's bank account. The name must match your identity document. (Please use your English name)

You can also add your different mailing address. If you have citizenship other than the United States or were born outside of the United States, click those options and fill them out based on your personal situation.

Enter your personal information

After filling in your personal information, choose your tax residency as the United States and enter your Social Security Number (SSN).

If you are a non-U.S. resident, enter your "Tax Identification Number" in the SSN field and type the information in your proof of identification.

Confirm your employment states

Fill it out truthfully. IB will also confirm with you whether you are a financial practitioner. Typically, you should select "No".

Fill in your source of wealth. Again, fill it out truthfully. Most people typically have "interest and dividend income" (fifth category). The more sources of income you have, the more stable your financial situation is.

Confirm account information & security questions

You may be asked these security questions when calling customer service. Here's a useful tip for this step I can share with you: You can use the same answer for all three security questions, which makes it easier to remember. 

5. Confirm mobile phone number 

The system will send a text message to the mobile phone you just entered. Enter the confirmation code to confirm your mobile number.

6. Select trading account & products

Account Type	Description
Cash Account	Cannot be used for financing.
Margin Account	Can be used for margin trading (financing is borrowing money).

Recommendation:

If you're unclear about the definition of margin trading, it's advisable to choose a cash account instead of a margin account.

---

Enter Your Income and Asset Value

Field	Description
Net Worth	Should be greater than "Liquid Net Worth".
Liquid Net Worth	Should be greater than "Annual Net Income".
Annual Net Income	Indicates a habit of continuous saving, reflecting a stronger ability to bear investment risks.

Tips:

• "Net Worth" should be greater than "Liquid Net Worth".
• "Liquid Net Worth" should be greater than "Annual Net Income".
• Indicating these values in this order suggests a habit of continuous saving, reflecting a stronger ability to bear investment risks.

Note:

If you want to invest in options or complex or leveraged exchange-traded products (CLPs), you can refer to my method for filling out the forms.

Stocks, Options, Crypto, Currency Choose the region

where you wish to trade and provide details about your trading experience. Experienced investors can invest in a wider range of products. Therefore, when filling out the information, I prefer to select "Good Knowledge." You can also choose options, crypto, or currency. More products can be added anytime after opening your IB account. 

Regulatory Information

Check "No" to confirm whether you are not a major shareholder or insider of a listed company in the U.S. stock market (to prevent insider trading).

Stock Yield Enhancement Plan (SYEP)

Description: By lending stocks to brokers, SYEP participants can receive 50% of the market-based rate on shares borrowed by IBKR (you can sell the stocks at any time).

Advantages:

• Participants can receive 50% of the market-based rate on borrowed shares.

Drawbacks:

Drawback	Description
Loss of Shareholder Voting Rights	You will lose shareholder voting rights if you lend out securities (though this is generally acceptable for most investors).
Loss of SIPC Protection	The lent securities may cause your invested products to lose Securities Investor Protection Corporation (SIPC)'s $500,000 protection because SIPC does not cover "investment risk."

 

Financial Profile and Trading Options

Description: Once you click continue, if you choose to trade “options,” but the financial profile you entered for "Annual Net Income," "Net Worth," "Liquid Net Worth," and "trading experience" is not consistent, it will display a teaching exam option.

Note: If your stated income significantly differs from the average income for your occupation, IB may require you to provide proof of income.

Avoidance Method:

If you want to trade options, you can refer to my suggested values (for reference only, see below):

7. Confirm your tax residence

If you are a non-U.S. resident, you need to confirm your tax residence as a substitute for your W-8BEN Form. Form W-8BEN is to prove that you are not a U.S. resident and do not qualify for US tax treaty benefits. 

8. Sign the trading agreement

IB Cryptocurrency Application Form

This form is only for those who have checked the "Cryptocurrency Trading Permit" on the front. It mainly informs you of the risks of investing in cryptocurrency. If you have not applied for cryptocurrency trading, you can skip this section and go to Read & Sign Agreement

Interactive Brokers Cryptocurrency trade execution and custody is provided by Paxos Trust Company, which currently provides transactions for the more circulating Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH) and Litecoin (LTC).

Read & Sign Agreements

Confirm all the information. If you have any questions, click "Edit" to modify it.

9. Verify identity and address

If you are a U.S. resident, you will see the page below indicating that you have completed your application. On this page, please check the page and your email to see if your account is eligible to receive Welcome Shares, which is the referral bonus that can be up to $1000.

If you are a non-U.S. resident, you will see the page below indicating that you need to complete the final step to complete your application, which is to verify your identity and address. (Just click “Verify identity”)

Verify identity and address

It is always recommended to only use [National ID Card]. If you plan to use [Passport] as an identity document, you only need to upload the side of the passport with the photo. The corners of the passport must be complete so that the AI ​​​​can quickly approve it.
Reminder: Please ensure your uploaded documents are not expired or invalid.

10. Receive the account approval

Congratulations! You have completed all the IB account opening procedures! Normally, your IB account will be opened immediately.