Interactive Brokers vs Freedom24: Which broker is right for you?

1. Flash overview of Interactive Brokers and Freedom24

IBKR, founded in 1978, is a well-regulated broker under several financial regulators: SEC, FCA (UK), CBI and more. The broker’s primary platform, Trader Workstation (TWS), is known for its complex interface, making it suitable for advanced traders (and you can take advantage of a great referral system).

Still, beginner investors have access to more friendly platforms like the Client Portal, IBKR Desktop and the IBKR Mobile app. It also stands out for its strong customer support and comprehensive educational resources.

Freedom24 is operated by Freedom Finance Europe Ltd, licensed by CySEC since 2015. It is the European arm of Freedom Holding Corp, which is listed on the Nasdaq under the ticker FRHC. It provides access to stocks, ETFs, bonds and US stock options. Freedom24 offers both web-based and mobile platforms that are more tailored toward experienced investors. It is gifting shares for new users (The WELCOME promotion is subject to terms and conditions. Gift Shares are allocated randomly from a selection of eligible stocks, with higher-value shares awarded less frequently).

2. Product offering

Both IBKR and Freedom24 offer a range of financial instruments, though the breadth is not comparable. The table below summarises the products available for trading with each broker.

If you want the lowest commissions and the widest market access across stocks, ETFs, options and futures, Interactive Brokers is the more natural choice. If you’d rather build a long-term portfolio, Freedom24 is worth considering: it offers in-depth analytics, ETF Investment plans that let you invest in selected ETFs regularly with €0 commission, and the support of a dedicated personal manager. The €0 fee applies only to purchases made within the Freedom24 Recurring Investment function, and other fees apply according to the Freedom24 Fee Schedule.

3. Trading platforms

One of the key value propositions of an online broker lies in the investment platform it provides. In this field, solid and competitive brokers tend to pursue an innovative approach in an attempt to supply investors with the best and most recent trading and decision-supporting customisable tools.

Interactive Brokers trading platforms

IBKR provides both desktop and mobile trading platforms. Its award-winning platform, Trader WorkStation (TWS), is known for being complex, making it ideal for traders with advanced experience. However, you have access to other user-friendly platforms, namely the web-based Client Portal, IBKR Desktop and IBKR Mobile:

Freedom24 trading platform

Freedom24’s web platform and mobile app cater to advanced traders. However, the user experience can feel slightly overwhelming for beginners due to the wide range of products and tools.

You have access to several features such as the “Trade”, “Member Area”, and “Charts”.

The demo terminal appears as soon as you complete the first step of registration, between the step where you fill in your e-mail and the final confirmation with a selfie and opening a real account.

4. Interest on cash

This is a clear win for Interactive Brokers, since Freedom24 does not pay interest on uninvested cash.

IBKR’s headline rates come with conditions that do most of the work, and they are worth reading before you count on the income. The rates above apply to accounts with a net asset value above USD 100,000, and even then no interest is paid on the first USD 10,000 (GBP 8,000, or the equivalent in other currencies). Accounts below that NAV receive a proportionally lower blended rate, which rises as the account approaches USD 100,000. Cash held in the commodities segment of the account earns nothing.

Rates are also variable and vary by currency, so check the current schedule before deciding. If earning a return on idle cash is a priority for you, our comparison of the best brokers paying interest on uninvested EUR covers the alternatives.

5. Account types

There are two fundamental types of brokerage accounts:

• Cash – where trading of derivatives and short-selling of securities is either not permitted or significantly limited.
• Margin – where trading of derivatives and short-selling of securities is widely available. It is also possible to borrow, with an associated financing cost, against your current holdings (collateral) to further expand your investment financial capacity. Margin accounts are constantly monitored for risk, and positions may be closed if the collateral value drops below a certain threshold established by the online broker. Finally, it is worth noting that this leverage may result in losses that surpass the capital invested in abrupt adverse market movements.

Interactive Brokers and Freedom24 offer both a cash and a margin account.

6. Account opening, cash and portfolio transfers

Account opening

IBKR and Freedom24 both have an account opening process that runs fully online. They both require documentation to prove ID and address. Neither of these brokers establishes a minimum amount to be deposited to open an account.

Account opening approval is typically faster with Freedom24, averaging one business day, whereas with Interactive Brokers it might take, on average, two to three business days.

Cash transfers

For Interactive Brokers, you can only deposit and withdraw via bank transfer (Wire/SEPA). By using a Wire transfer, you have one free withdrawal per month. Subsequent withdrawals in that same month will incur a fee of EUR 8.00. With SEPA (transfers only in EUR), you also have one free withdrawal a month, after which a fee of EUR 1.00 is applied.

In Freedom24, cash deposits are made via bank transfer or credit card. Withdrawals carry a €7 fee per request.

Portfolio transfers

Both brokers support transfers of existing portfolios in and out of their accounts. Currently, Interactive Brokers’ process seems to be more streamlined. In any case, the process of transferring securities from one institution to another should always be seen on a case-by-case basis, as it requires the two institutions to interact and analyse the assets to be transferred.

7. Pricing – trading and non-trading fees

When choosing an online broker, you often want to study the costs involved. IBKR is the cheaper of the two for most order sizes, and the gap widens on small, frequent trades.

First, it is important to establish that there are fees for trading, where the broker charges a fee (commissions or spreads), and for non-trading services, like withdrawal fees.

Trading fees

Non-trading fees

8. Investor security

The security of your assets is of utmost importance when choosing a broker. Besides local investor protection schemes that might be established in your country’s jurisdiction, it is important to understand the broker institution you are working with.

Interactive Brokers regulation and protection

IBKR subsidiaries are supervised by top-tier regulators such as the US Securities and Exchange Commission (SEC) and the UK Financial Conduct Authority (FCA).

When opening an account, you will sign up through one of the IBKR subsidiaries. Here are the main ones:

Freedom24 regulation and protection

Freedom Finance Europe Ltd is regulated by the Cyprus Securities and Exchange Commission (CySEC) under licence CIF 275/15, and it is passported across the EEA under MiFID II to provide services in several countries. Its parent, Freedom Holding Corp, is listed on the Nasdaq, which means it publishes audited accounts.

In the unlikely event that the segregated assets cannot be returned to clients, Freedom24 falls under the Investor Compensation Fund (ICF), which compensates for any losses from non-returned investments up to EUR 20,000.

9. Customer support

If any doubt related to your trading or investment activity arises, you will certainly want to have the best possible assistance. Hence, customer service is another important dimension when choosing an online broker.

IBKR and Freedom24 have comprehensive FAQ pages and make phone and email channels available to clients. It is important to highlight that not every language is supported.

Interactive Brokers vs. Freedom24 – comparison verdict

To sum it up, here is our verdict:

• Interactive Brokers: Best broker overall
• Freedom24: Best for building a diversified long-term portfolio

All angles considered, Interactive Brokers stands out from Freedom24 as a price-competitive, solid institution, offering the best combination of financial instruments, tools, and solutions for the whole investment journey. It is also the only one of the two that pays you anything on cash you have not yet invested, though the conditions attached make that relevant mainly to larger accounts.

That said, the best choice depends on your profile. If you approach investing as a systematic, long-term process, and want a wide range of instruments to diversify, in-depth analytics and a dedicated personal manager to support your decisions as your portfolio grows, Freedom24 is a strong alternative worth considering.

For more information on each platform, please consult our research:

• Freedom24 review and,
• Interactive Brokers review