Interactive Brokers vs Easy Equities

[chopsky]

Has anyone on here tried IB? Seems to be a massive platform with a wide variety of investment options at low cost.
Wonder how it compares to EE, if anyone has tried or investigated both.
Looking at investing into offshore ETFs.

Cheers!

 

[JayM]

IB have a bit of a learning curve (TWS is complicated for a beginner) and you need to have >$100K with them if you want the monthly minimum fee of $10 to be waived. Account setup is very quick (mine was like 3 days including all KYC/AML). They also pay 1.9% interest on idle cash balances (USD) and have exceptionally low margin rates if that's your thing. You can SWIFT transfer directly to your brokerage account (in multiple currencies) without needing another international bank account.

If you're a buy-and-hold kind of person and have <$100K, I'd suggest a different broker who doesn't charge a minimum monthly fee. But definitely use a non-SA company for risk mitigation.

 

[chopsky]

IB have a bit of a learning curve (TWS is complicated for a beginner) and you need to have >$100K with them if you want the monthly minimum fee of $10 to be waived. Account setup is very quick (mine was like 3 days including all KYC/AML). They also pay 1.9% interest on idle cash balances (USD) and have exceptionally low margin rates if that's your thing. You can SWIFT transfer directly to your brokerage account (in multiple currencies) without needing another international bank account.

If you're a buy-and-hold kind of person and have <$100K, I'd suggest a different broker who doesn't charge a minimum monthly fee. But definitely use a non-SA company for risk mitigation.

Thanks very much! According to EasyEquities, the investment is held offshore in the client's name, so even if they go tits up, you still have your investment. So they say anyway.

 

[JayM]

Thanks very much! According to EasyEquities, the investment is held offshore in the client's name, so even if they go tits up, you still have your investment. So they say anyway.

That may be true, but while they have custody, there is a risk that the government instructs them to hand over the securities (or liquidate them and hand over the cash). For me, the small amount of extra admin is worth it to guarantee that this can never happen. IB brokerage accounts are also FDIC insured up to (at least) $250K, so even cash balances are protected if something happens to them.

 

[uphoria]

What's the cheapest and most effective way t fund your IB account?

 

[JayM]

What's the cheapest and most effective way t fund your IB account?

E4F - no fees if you transfer over R100K, and typical spread of 1%.

 

[TheJman]

That may be true, but while they have custody, there is a risk that the government instructs them to hand over the securities (or liquidate them and hand over the cash). For me, the small amount of extra admin is worth it to guarantee that this can never happen. IB brokerage accounts are also FDIC insured up to (at least) $250K, so even cash balances are protected if something happens to them.

This has always been a concern of mine, but I don't think the money that is invested through asset swap, but rather as part of the discretionary allowance, which means it is untouchable by SA?

 

[JayM]

This has always been a concern of mine, but I don't think the money that is invested through asset swap, but rather as part of the discretionary allowance, which means it is untouchable by SA?

Although unlikely, I wouldn't say it's untouchable if a South African company has custody of it. Even though the funds may have cleared exchange controls, Easy Equities could still be forced by a court to hand them over. If you have the means, why risk it?

 

[chopsky]

If you're a buy-and-hold kind of person and have <$100K, I'd suggest a different broker who doesn't charge a minimum monthly fee. But definitely use a non-SA company for risk mitigation.

Any recommendations? Looks like competitors charge much higher trade fees ($6.95 per trade).
Just looking at investing into offshore ETFs rather than individual stocks. No desire to trade frequently.

 

[backstreetboy]

Any recommendations? Looks like competitors charge much higher trade fees ($6.95 per trade).
Just looking at investing into offshore ETFs rather than individual stocks. No desire to trade frequently.

Degiro.ie

 

[TheJman]

Although unlikely, I wouldn't say it's untouchable if a South African company has custody of it. Even though the funds may have cleared exchange controls, Easy Equities could still be forced by a court to hand them over. If you have the means, why risk it?

It's actually an interesting question! I'm going to email EE to ask who has custody over those funds.... makes sense to think it is them though!

Because the fees at EE are ridiculously cheap, especially if you're just doing ETFs

 

[JayM]

Any recommendations? Looks like competitors charge much higher trade fees ($6.95 per trade).
Just looking at investing into offshore ETFs rather than individual stocks. No desire to trade frequently.

It's been 3-4 years since I went in search for a broker and the landscape has changed significantly. Some no longer accept SA residents etc, so if IB is not suitable you're going to have to do some research.

 

[JayM]

Degiro.ie

SA residents aren't officially supported by Degiro. I'd be extremely wary of trying to fiddle the system when large amounts of money are involved.

 

[backstreetboy]

SA residents aren't officially supported by Degiro. I'd be extremely wary of trying to fiddle the system when large amounts of money are involved.

Just get a number 26 bank account or go overseas and open one.

 

[JayM]

Just get a number 26 bank account or go overseas and open one.

Yes, that works, but what about brokerage KYC/AML for deposits and withdrawals?

 

[xumwun]

Although unlikely, I wouldn't say it's untouchable if a South African company has custody of it. Even though the funds may have cleared exchange controls, Easy Equities could still be forced by a court to hand them over. If you have the means, why risk it?

If they could force a company wouldn't they also be able to force you to do the same?

 

[JayM]

If they could force a company wouldn't they also be able to force you to do the same?

Sure, if you haven't left the country first.

 

[chopsky]

It's actually an interesting question! I'm going to email EE to ask who has custody over those funds.... makes sense to think it is them though!

Because the fees at EE are ridiculously cheap, especially if you're just doing ETFs

Please let me know the answer you receive from them. Thanks

 

[Kashman]

Hi Everyone, I know this conversation is rather old but I am now in this position and would your take on this debate.

I am busy setting up my offshore Bank account , and now looking for a partner for investing, thinking either EE or IB to invest about $1000 a month.

I know everyone warns about the $100 000 needed to avoid the $10 a month fee on IB, but I see that IB now offers a Lite version as well. looking to buy and hold, so more focused on ETF's to be honest. EE has a small subset as well, just dont know how their pricing works 100%.

The downside I am also reading is high cost of withdrawal's from IB? Anyone have experience?

Any thoughts? IB or EE ?? which would you recommend?

 

[Scooby_Doo]

Hi Everyone, I know this conversation is rather old but I am now in this position and would your take on this debate.

I am busy setting up my offshore Bank account , and now looking for a partner for investing, thinking either EE or IB to invest about $1000 a month.

I know everyone warns about the $100 000 needed to avoid the $10 a month fee on IB, but I see that IB now offers a Lite version as well. looking to buy and hold, so more focused on ETF's to be honest. EE has a small subset as well, just dont know how their pricing works 100%.

The downside I am also reading is high cost of withdrawal's from IB? Anyone have experience?

Any thoughts? IB or EE ?? which would you recommend?

If I am not mistaken you need to be a US citizen for the lite version.