Interactive Brokers Launches Mutual Funds for Stocks and Shares ISAs

Rhea-AI Summary

Interactive Brokers (IBKR) has expanded its UK Stocks and Shares ISA offering by adding mutual funds, providing UK investors with broader investment options in a tax-efficient vehicle. The enhancement complements existing access to global securities, including stocks, bonds, and ETFs.

Key features include: no custody or transfer fees (£3 minimum monthly activity fee applies), low trading commissions starting at £3/€3 for UK/European stocks, and competitive pricing for mutual funds with many available at no transaction fee. US stock trading is offered at significantly lower costs with reduced FX conversion fees. Clients can earn up to 3.989% interest on GBP balances and 3.83% on USD balances (as of February 7, 2025).

The platform provides access to global investment products through various trading platforms including Trader Workstation, IBKR Mobile, Client Portal, and the new IBKR Desktop.

Positive

• Addition of mutual funds expands product offering for UK market
• Competitive pricing with no custody or transfer fees
• High interest rates on cash balances (3.989% GBP, 3.83% USD)
• Low commission structure starting at £3 for UK/European stocks
• Many mutual funds available with zero transaction fees

Negative

• £3 minimum monthly activity fee applies

Insights

Financial Services Product Analyst

This product expansion marks a significant strategic enhancement to IBKR's UK market position, with several key implications for investors:

Market Position Strengthening
The mutual fund addition to IBKR's ISA offering addresses a important gap in their UK product suite. With pricing significantly undercutting traditional UK brokers - commissions from £3 and mutual fund fees at £4.95 - this positions IBKR to capture market share from established players like Hargreaves Lansdown and AJ Bell, who typically charge higher fees.

Revenue Growth Catalysts
Three key drivers support potential revenue growth:

• Timing advantage: Launch before the April 5 tax year deadline maximizes potential client acquisition during peak ISA season
• Cross-selling opportunity: The mutual fund addition enables IBKR to attract traditional retail investors who may subsequently engage with other trading products
• Operational leverage: The integration leverages IBKR's existing technology infrastructure, suggesting high-margin potential for new business

Competitive Advantages
IBKR's offering presents compelling differentiators:

• FX conversion fees up to 50% lower than competitors for US stock trading
• Attractive interest rates on cash balances (up to 3.989% GBP, 3.83% USD)
• No custody or transfer fees, reducing barriers to account migration

This expansion aligns with the broader trend of retail investors seeking cost-effective, comprehensive investment platforms. The combination of competitive pricing, extensive product range and advanced trading technology positions IBKR to potentially accelerate their UK market penetration, particularly among cost-conscious investors seeking global diversification options.

Thousands of UK and Global Investment Products Available

LONDON--(BUSINESS WIRE)-- Interactive Brokers (U.K.) Limited, an affiliate of Interactive Brokers (Nasdaq: IBKR), an automated global electronic broker, announced the expansion of its offering of Stocks and Shares Investment Savings Accounts (ISAs) with the addition of mutual funds. This enhancement allows UK investors to access a wider range of investment products in a tax-efficient savings vehicle alongside advanced trading platforms, low fees, and global diversification.

The newly introduced mutual funds complement the thousands of available global securities, including stocks, bonds, and exchange-traded funds (ETFs). With competitive pricing and no added custody or transfer fees, Interactive Brokers provides UK investors with a powerful platform to take control of their investments.

“We’re pleased to introduce mutual funds to our Stocks and Shares ISAs, empowering UK investors to build diversified portfolios with a wider array of investment options,” said Gerry Perez, CEO of Interactive Brokers (U.K.) Limited. “As the tax year deadline approaches on 5 April, UK investors can maximise their ISA contributions and save efficiently for their financial future.”

Interactive Brokers offers a unique combination of features designed to help investors make the most of their ISA contributions:

• No Custody, Minimum Deposit or Transfer Fees: No minimum deposit is required. There are no custody fees for investments or charges for transferring an ISA from another provider. A minimum monthly activity fee of £3 applies.
• Low Commissions: Trading commissions start from just £3/€3 per trade for UK and most European stocks. Thousands of mutual funds are available with no transaction fee, while most other funds are priced at £4.95 in the UK, inclusive of all regulatory and exchange fees.
• Trade US Stocks for Less: UK investors benefit from much lower overall costs when trading US stocks. With low commissions and a transparent FX conversion fee that is up to 50 times lower than other UK brokers, Interactive Brokers makes cross-border investing significantly cheaper than most competitors. To review the broker pricing comparison for UK residents, please see the chart here: US Stock Trading Costs for UK Residents
• Earn Interest: UK clients can earn interest of up to 3.989% on their GBP cash balances or up to 3.83% on their USD cash balances. The interest rates are as of February 7, 2025, and are subject to change. See the UK Interest page for full details and terms that apply.
• Global Diversification: With access to thousands of global investment products, including mutual funds, stocks, bonds, and ETFs, investors can create a truly diversified portfolio, and leverage tools like IBKR GlobalAnalyst to explore new opportunities.
• Powerful Platforms: Interactive Brokers offers a variety of platforms to suit the needs of occasional investors and active traders: the advanced Trader Workstation (TWS), IBKR Mobile for trading on the go, the intuitive Client Portal to view, trade and manage an account, and the new IBKR Desktop that combines popular tools with a streamlined design.

Opening a Stocks and Shares ISA with Interactive Brokers is quick and simple. Investors can easily sign up online or transfer an ISA from another provider without hassle, making it easy to take advantage of this powerful tax-efficient investment vehicle.

For more information on Interactive Brokers’ Stocks and Shares ISA, visit: Interactive Brokers ISA Accounts

Stocks and Shares ISAs are only available to UK residents.

The Best Informed Investors Choose Interactive Brokers

About Interactive Brokers Group, Inc.:

Interactive Brokers Group affiliates provide automated trade execution and custody of securities, commodities, foreign exchange, and forecast contracts around the clock on over 150 markets in numerous countries and currencies from a single unified platform to clients worldwide. We serve individual investors, hedge funds, proprietary trading groups, financial advisors and introducing brokers. Our four decades of focus on technology and automation have enabled us to equip our clients with a uniquely sophisticated platform to manage their investment portfolios. We strive to provide our clients with advantageous execution prices and trading, risk and portfolio management tools, research facilities and investment products, all at low or no cost, positioning them to achieve superior returns on investments. Interactive Brokers has consistently earned recognition as a top broker, garnering multiple awards and accolades from respected industry sources such as Barron's, Investopedia, Stockbrokers.com, and many others.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250211282013/en/

Media: Katherine Ewert, media@ibkr.com

Source: Interactive Brokers

FAQ

What new products did IBKR add to its UK Stocks and Shares ISA offering?

IBKR added mutual funds to its UK Stocks and Shares ISA offering, complementing existing products like stocks, bonds, and ETFs.

What are the trading commission rates for IBKR's UK ISA accounts?

Trading commissions start from £3/€3 per trade for UK and most European stocks, with many mutual funds available at no transaction fee and others priced at £4.95 in the UK.

What interest rates does IBKR offer on cash balances in ISA accounts as of February 2025?

IBKR offers interest rates of up to 3.989% on GBP cash balances and up to 3.83% on USD cash balances as of February 7, 2025.

Are there any custody or transfer fees for IBKR's Stocks and Shares ISA?

No, IBKR does not charge custody or transfer fees for ISA accounts, though a minimum monthly activity fee of £3 applies.

What trading platforms does IBKR offer for ISA account holders?

IBKR offers multiple platforms including Trader Workstation (TWS), IBKR Mobile, Client Portal, and the new IBKR Desktop.