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Interactive Brokers is cheap. Two settings decide how cheap

Written by Jacob Shasha, private investor · Updated 12 August 2026 · How we test

Lite or Pro, and why it is not a free choice

Lite advertises zero commission on US stocks and ETFs. That is true, and it is not the whole picture. Lite carries less favourable order routing, pays lower interest on cash, and charges higher margin rates than Pro. It is also restricted to US residents, so everyone outside the US is on Pro whether they like it or not.

On options, IBKR states that Lite accounts are charged a fixed rate commission on the first 1,000 US option contracts traded per month, and that volume above that moves onto the Pro tiered model. Worth knowing before you assume the plan scales with you.

Commission and plan figures from Interactive Brokers' published schedules and broker review sources. Automatic conversion terms re-verified first-party 4 August 2026. Checked 3 August 2026. Pricing varies by IBKR entity and by country and changes over time. Confirm in your own Client Portal.

Currency conversion, where the real money is

If you live outside the US and buy US shares, or hold anything listed in another currency, this section matters more than every commission figure above combined.

IBKR offers two ways to convert, and they are priced completely differently.

Automatic conversion

Triggered when you buy an asset in a currency you do not hold. IBKR states that it will typically add or subtract, at its discretion, 0.03 percent to the exchange rate that would otherwise apply, and that it charges no separate commission on these trades. Read that wording closely. It is a stated practice with two hedges in it rather than a guaranteed rate, and it is the only figure the broker publishes for this route. It happens in the background and you will not see a line item for it.

Interactive Brokers spot currencies commissions page, checked 4 August 2026. The same wording appears on the UK, Ireland and Japan entity pages, so this is global policy rather than a regional arrangement. IBKR states it may change these rates at its sole discretion, and that clients introduced through another broker or an advisor may pay more.

To see what that conversion costs alongside everything else in your account, the expense ratio calculator takes an amount converted per year and adds it to your fund fees.

Manual spot FX

You place a currency order yourself. Priced at 0.20 basis points of trade value with a 2 dollar minimum, against an interbank quote with no markup. IBKR is explicit about the philosophy: it passes through the prices it receives and charges a separate low commission, rather than marking up quotes and charging nothing in commission as many currency brokers do.

The third column is the point. Arguing over one dollar between IBKR's two methods is a rounding error next to the fifty you would hand over elsewhere on the same conversion. If you invest across currencies, this is the largest single cost decision available to you, and it is usually made by default without anyone mentioning it.

Overnight trading, where Lite stops being free

IBKR runs an overnight session for US stocks and ETFs from 8:00pm to 3:50am ET, with the first session of the week opening Sunday at 8:00pm and the last closing Friday at 3:50am. It covers over 10,000 US-listed stocks and ETFs, market data for the session is free, and no extra trading permission is needed beyond the one you already have for US stocks.

The cost is where it gets interesting, and it is the clearest example on this page of a charge that appears without warning.

There is a second rule that catches people trading around the edges of the session rather than inside it. For Lite accounts, trades from opening auction, closing auction, outside regular trading hours and sub-dollar orders stay commission-free only while their combined monthly volume stays under 10% of the account's monthly US stock trading volume. Cross that line and IBKR charges the lesser of USD 0.005 per share or 1% of trade value, capped at USD 9.79 per trade. Market orders placed before the open are treated as market-on-open and count towards the threshold.

None of this is hidden. All of it is published on IBKR's commissions page. But it is in a footnote to a plan whose entire selling point is the word free, and the effect is that the cheapest plan for a daytime investor is not the cheapest plan for someone trading at midnight.

Two different things are called overnight fees

The phrase is used for two unrelated charges, and confusing them is expensive.

• Commission in the overnight session, described above. It applies to the trade, and on Lite it is the difference between zero and the fixed rate.
• Financing charged for holding a position overnight, which is the margin interest in the section above. That accrues daily on the borrowed balance and is posted monthly, and it has nothing to do with when you placed the trade.

If you buy with settled cash and hold, you pay the first and not the second. If you buy on margin during regular hours and hold for a month, you pay the second and not the first. Trading on margin at 1:00am on Lite pays both.

What IBKR does not charge

No inactivity fee, no account maintenance fee and no deposit fee. That is genuinely unusual for a broker offering direct market access, and it removes the slow leak that catches people who trade rarely.

The cost that does catch new users is market data. The free basic tier is limited, and real-time data for specific exchanges is a monthly subscription. Budget for it if you need it, and skip it if you are a long term holder who does not. A separate research subscription is the other way people cover the same gap, and it is worth knowing what each one includes before paying twice.

The interest they are not paying you

The headline everyone quotes is that IBKR pays 3.13% on uninvested cash. That figure is real and it is published on their own rates page. It is also subject to four conditions at once, and most people fail at least one of them.

1. Only above the threshold. The first USD 10,000 of cash earns nothing at all, whatever your account size.
2. Only if your account is large enough. The full rate needs a net asset value of USD 100,000 or more. Below that you receive a proportion, set by your NAV divided by 100,000.
3. Only on IBKR Pro. Lite is paid the benchmark minus 1.5% rather than minus 0.5%, which is a full percentage point less.
4. Only in some currencies. Several pay nothing, and one charges you.

Put those together and the headline collapses quickly. These are IBKR's own worked examples, published on the same page as the rate.

Your account	Cash held	What you actually earn
$20,000	$5,000	0.000%
$80,000	$20,000	1.252%
$320,000	$80,000	2.739%

IBKR Pro, USD. Source: Interactive Brokers interest rates page, rates as of 7 August 2026. Check the current figures.

The first row is the one worth sitting with. An account of twenty thousand dollars holding five thousand in cash earns nothing, because the balance never clears the ten thousand threshold. The middle row earns 1.252% rather than 3.13%, because the NAV is only 80% of the way to the qualifying level and the first ten thousand still earns zero. Only the third row gets close to the advertised number, and even there it lands at 2.739%.

For context, IBKR publishes a comparison alongside it showing the mainstream US brokerages paying between 0.010% and 0.050% on the same balances. So the criticism is not that IBKR is stingy. It is that the number in the marketing is the ceiling, not the rate.

Five currencies where cash earns nothing

Of the 27 currencies IBKR lists, five pay zero or less to Pro clients on any balance:

Currency	IBKR Pro	IBKR Lite
Swiss franc	-0.497%	-1.497%
New Zealand dollar	0%	0%
Indian rupee	0%	0%
Israeli shekel	0%	0%
Russian rouble	0%	0%

Top tier rates, as of 7 August 2026.

The Swiss franc line is not a typo. The rate is negative, which means holding francs in cash costs you money rather than earning it. Two more currencies fall to zero or below on Lite alone: the Japanese yen pays 0.523% on Pro but -0.477% on Lite, and the Singapore dollar drops from 0.397% to zero. In those two, the plan you picked decides whether you are paid or charged.

One more detail that catches people with multi-currency accounts: the ten thousand dollar threshold applies per currency, not to your total. Cash spread across four currencies can clear nothing at all while a single balance of the same size would earn.

What borrowing costs, and why Lite is not free

IBKR's margin rates are consistently among the lowest published, and that part of the reputation holds up. The rate is tiered and blended, so a large loan is charged at several rates rather than one.

USD loan size	IBKR Pro	IBKR Lite
First $100,000	5.130%	6.130%
$100,000 to $1m	4.630%	6.130%
$1m to $50m	4.380%	6.130%

Source: Interactive Brokers margin rates page, as of 7 August 2026. Check the current figures. Interest accrues daily and is posted monthly, on the third business day of the following month.

Notice what happens across the two columns. Pro is charged the benchmark plus 1.5% and drops as the loan grows. Lite is charged the benchmark plus 2.5% and never drops at all, however large the balance.

This is the real price of the commission-free plan, and it is charged twice. On the cash side Lite receives a full percentage point less. On the borrowing side it pays a full percentage point more. On Pro the gap between what you are paid and what you are charged is two percentage points. On Lite it is four.

Whether that matters is arithmetic rather than opinion. If you hold twenty thousand in cash and never borrow, the cash penalty alone costs you around two hundred dollars a year, which is a lot of zero-commission trades. If you never hold cash and never borrow, Lite is genuinely free and the choice does not matter. Most people are somewhere in between and have never run the number.

Who it suits

Anyone converting currency, without much argument. Anyone borrowing on margin, because the rates are consistently among the lowest published. Anyone buying outside their home market, because the exchange coverage is unmatched.

It suits you less if you are a US resident trading only US stocks and want a simple app. The commission difference against a zero commission broker is small at that point, and the platform is built for people who want control rather than simplicity. Our broker cost comparison covers what separates the mainstream options in that case.

Frequently asked questions

Does Interactive Brokers charge fees for overnight trading?

For IBKR Pro the commission in the overnight session is the same as during regular hours. For IBKR Lite it is not free: IBKR's commissions page lists overnight trading among the categories subject to Fixed Pricing, which is 0.005 dollars per share with a 1 dollar minimum per order. Separately, holding a margin position overnight accrues interest daily at the margin rate, which is a different charge from the trading commission and applies regardless of the hour you traded.

How much interest does Interactive Brokers pay on cash?

Up to 3.13% on USD for IBKR Pro clients, as of 7 August 2026, but four conditions apply at once. No interest is paid on the first USD 10,000. The full rate requires a net asset value of USD 100,000 or more, and below that you receive a proportion of it. IBKR Lite is paid a full percentage point less. And several currencies pay nothing at all, with the Swiss franc charging a negative rate. IBKR's own examples show an account of USD 20,000 holding USD 5,000 in cash earning 0.000%.

What are IBKR margin rates?

For IBKR Pro in USD, 5.130% on the first USD 100,000, falling to 4.630% between 100,000 and 1 million and 4.380% above that, blended across the tiers. IBKR Lite pays 6.130% at every size and the rate never falls. Interest accrues daily and is posted monthly on the third business day of the following month. Rates as of 7 August 2026 and subject to change.

Is IBKR Lite actually free?

Commission on US stocks and ETFs is zero on Lite, but the plan carries trade-offs that Pro does not: less favourable order routing, lower interest paid on cash, and higher margin rates. Lite is also restricted to US residents. Everyone else is on Pro.

What does IBKR charge per share on Pro?

On the Pro Fixed plan the published rate is 0.005 dollars per share with a 1 dollar minimum per order. The Tiered plan goes as low as 0.0035 dollars per share and adds exchange, regulatory and clearing fees separately, so it favours higher volume.

How much does IBKR charge to convert currency?

Two methods with different pricing. On automatic conversion IBKR states it will typically apply, at its discretion, a 0.03 percent adjustment to the exchange rate with no separate commission. A manual spot FX order is priced at 0.20 basis points of trade value with a 2 dollar minimum, and the underlying quote is interbank with no markup.

When is manual FX cheaper than automatic conversion at IBKR?

Around 6,667 dollars. Below that the 2 dollar minimum on a manual order costs more than the 0.03 percent adjustment on automatic conversion. Above it the percentage charge overtakes the fixed minimum. On a 10,000 dollar conversion the estimated cost is about 2 dollars manual against 3 dollars automatic.

Does Interactive Brokers charge an inactivity fee?

No. IBKR publishes no inactivity fee, no account maintenance fee and no deposit fee, which is unusual among brokers offering direct market access.

What options commission does IBKR charge?

On the fixed plan the rate is 0.65 dollars per contract, and tiered pricing ranges from 0.15 to 0.65 depending on volume. IBKR states that Lite accounts are charged a fixed rate on the first 1,000 US option contracts each month, and that volume above that moves onto the Pro tiered model.

Is Interactive Brokers cheaper than a zero commission broker?

For a US investor trading only US stocks, the commission difference is small and other factors matter more. For anyone converting currency, IBKR is usually far cheaper, because a 0.03 percent conversion charge against a typical retail rate of half a percent or more is the largest single saving available.