When you sign up with Interactive Brokers LLC, you stand to gain a few immediate benefits from a client account. You can replicate the trades portfolio managers chose to make for themselves with their own funds. This doesn’t come at the expense of a major investment because the minimum deposit they require is just $100. For this or a higher amount, you have the security and safety of an account that’s actively managed by experts.
How much should you invest?
The broker advises new users to exercise caution when answering this question. There is no single right answer, obviously, because it depends on everyone’s unique financial and personal circumstances. As always, the motto applies: don’t transfer more than you can afford to lose.
Clients who plan to invest in a heavily traded portfolio or a number of portfolios should deposit a relatively large sum; at least $25,000. Why? The SEC, which regulates this and other similar brokers, locks accounts with less than that in them under its rules for pattern day trading.
Funding an account
Interactive Brokers LLC’s website lists a number of funding options, which include bank wire, check, and bank ACH (direct) transfer. Each deposit method comes with its own instructions. Once the broker assigns an account number to you, you can fund your account. They monitor all new accounts to check when the deposit has been cleared, after which the account is activated immediately.
The broker requires users to inform the support when they’ve made a deposit. This is called a deposit notification. To send one, choose Funds Management and then Inbound Transfers on the site.
Types of accounts
Interactive Brokers supports joint, individual, IRA, and many other account types. People opening retirement accounts have to undergo additional verification. What all the accounts have in common is that they’re cash. Holders can reinvest their profits in new purchases immediately. They don’t need to wait to use stock sale proceeds. You can choose an account depending on your individual risk profile – conservative, moderate, or adventurous. This is the ‘investor personality type.’ Depending on your type, you can choose from different portfolios matching it. Few brokers are as helpful as this one – and all of this just for $100!
On a final note, one very practical thing this broker lets you do is get cash by redeeming a portfolio and invest it in another portfolio. Keep in mind that Interactive Brokers’ accounts aren’t subject to borrowing short stocks or cash and you need to settle a redemption before you can withdraw the money from it.