Saxo Bank Vs Interactive Brokers

We are about to compare two giants and leaders in the industry. They are similar in many ways, target the same customers, unique services, and have the widest instruments range a broker can offer. It would be hard to pick a general winner, but a better understanding of what fits you is the goal of this review. Also, expect different information about these brokers than what you usually read.

Is Saxo Bank better than Interactive Brokers? Read the best comparison and recommendation.

Introduction

Before the 2000s, the best way to try and keep the value of your hard-earned cash was to invest in housing, government bills, precious coins, or small businesses. Each would carry its risk, return, and liquidity level. The CFD changed all that and today we see a boom of a completely new fintech industry that allows us to participate in many capital markets with almost instant liquidity. Also, trade with more capital than you have, hedge, automate, diversify, and build portfolios. This is what a modern broker can do for us, common people. Be sure you learn about the industry and each broker before you trade with them.

The brokers we compare now are Market Makers and also liquidity providers. This type of broker matches your sell or buy orders with other clients willing to buy/sell. Also, the broker can take your offer. This would mean they make money if you lose, a conflict of interest some would say. They can also hedge your positions. In practice, they mix and would like you to keep trading.

Other types of brokers just pass your order to liquidity providers, like Saxo Bank and other major houses in the market. These are ECN brokers that have a commission on your trades since they usually offer the best spreads. These are favorite conditions for EAs and scalpers.

Saxo Bank Vs Interactive Brokers

EU giant versus US giant. Saxo Bank, a Danish broker that is also a bank, is one of the largest brokerages in Europe. Is the bigger the better? Well, for some it certainly is but we have mixed feeling about Saxo Bank in the end.

Interactive Brokers come from the US, a market that is very hard on brokers, be it competition, requirements, laws, or regulations. But IBKR manages to keep the business up since 1978 and continues to set benchmarks for other brokerages. Of course, it does not mean this broker is the best for you, especially if you aim for small accounts.

Platforms

Interactive Brokers or IBKR, are keeping their now long-lasting relationship with the Trader Workstation platform. We can say this platform is more powerful than MetaTrader 4 and maybe even MT5 since it has more features specific to this broker. This is a proprietary platform made for the most demanding traders. However, in our experience and other clients agree, it feels a bit clunky compared to MetaTrader or cTrader. The design also requires more clicks for certain actions. If we compare TWS with the more popular MetaTrader, it is evident there are more indicators and scripts made for the MetaTrader, thus bringing and customizing the platform to unimaginable levels. If you are familiar with any previous platform, TWS will require adaptation and even a learning curve for advanced features. Beginners may have a harder time learning TWS than MetaTrader, but it is a platform with many features required for broad IBKR services.

There are a total of 6 platforms offered, all are proprietary and specialized in certain areas. Namely, IBKR Global trader is a go-to platform for mobile users with simplicity in mind. It mimics the abilities of the TWS for smaller screens. Trade global stocks, options, ETFs, mutual funds, and crypto.

Another proprietary platform for mobiles but with more features is called IBKR Mobile. It is designed to manage your account and use specialty research and analysis tools.

Now what we liked about IBKR is their unique trading services called EventTrader and IMPACT. EventTrader is a web platform designed for IBKR’s new trading product that reminds of binary options. Here, traders predict if the price will fall or rise for certain assets for a specified time and “bet” on it. Beginners would certainly have fun considering the simplicity and auto-solving money management.

IBKR IMPACT is another specialized service aimed to bring you closer and find companies that match your preferences. Your portfolio can be aligned with pure water, gender equality, reforesting, and other thematics you consider important for the world. Evidently, this is IBKR’s effort in ESG investing trends.

Saxo Bank used to have MetaTrader interest but dropped it and remained a proprietary platform broker. Market Maker brokers like Saxo direct customers to platforms that promote their house abilities to the fullest. Another reason is that these brokers are often more expensive and would not be competitive with smaller brokerages that rely on MetaTrader, small accounts, and low spreads. Saxo Bank operates on a higher volume, and it shows in their account types too.

Saxo offers two proprietary platforms, like IBKR, and very good integration with other, third-party tools. Saxo Trader Go is a great platform that will satisfy most traders except for the most technical geeks. The platform is responsive, has a professional feel, informative panels, and is packed with great tools. We also like that you can experience the platform without opening an account. It is directly possible from the Platforms webpage with a click. The Research tab of Saxo Trader Go is one of the best we have seen. It holds all the good stuff about the markets that could captivate you all day.

Saxo Trader Pro is a beefed-up version of the platform above. It is truly setting the ladder high when it comes to technology and features in modern trading. MetaTrader platforms look like child toys compared to this proprietary platform. The best part we think about Saxo Trader Pro is its modularity, the platform is divided into modules you can adjust for each screen and set up to your liking.

If you have some other platforms or tools, both brokers have third party connection packages. Saxo Bank and IBKR support TradingView for all those community scripts and indicators in case you miss them in proprietary platforms. Additionally, you can find Multicharts, FIX and Open API, Excel trading, and more connectivity solutions.

As a final note, we would give an advantage to IBKR platforms for mobiles, especially those for beginners and specialty products like IMPACT and IBKR EventTrader. Seems IBKR is now noticeably more oriented to non-experts with smaller capital. On the other hand, Saxo Bank Trader Pro and Trader Go are for now our favorites.

IBKR platforms

Pros

• Proprietary platforms for trading on all levels
• Great range of tools and features
• Integrated News, Calendar, Analysis, and other tools.
• Well-organized and designed for mobile devices, web, and desktop
• Good customization level
• Connectivity suites like API FIX, Excel, MultiCharts, TradingView, etc
• Specialty IMPACT and EventTrader platforms
• Possibility to have MetaTrader copier

Cons

• The TraderWorkstation platform feels a bit clunky and complex
• TWS requires learning even for established MetaTrader users

Saxo Bank platforms

Pros

• Quality top-notch platform
• Well-designed, beginner-friendly layout for mobile smart devices
• Great Research section
• Full customization
• Connectivity to TradingView and others via API
• Algorithmic trading
• One-click demo

Cons

• No simple solutions like IBKR has
• Fewer service specialties than IBKR
• Limited demo
• Requires a bit of learning

Instruments Range

Interactive Brokers are probably the best broker for its asset range, maybe slightly better than Saxo Bank for it is supporting more crypto 24/7. Also because IBKR has its Event Contracts and IMPACT products. If we compare the sheer number of tradeable instruments Saxo Bank is the winner with more than 55000 instruments vs 8500+ on IBKR. There is a possibility to ask for an asset if it is not available with IBKR.

Interactive Brokers have Stocks, ETFs, Options trading, Futures, Forex, Cryptocurrencies, Metals, Bonds, Mutual Funds, Hedge Funds, and specialty Event Contracts. These are non-CFD, if you want CFD or Margin trading, the range depends on your residence and where you want to trade. Generally, CFDs are available on Forex, Stocks, Indices, and Commodities.

Saxo Bank instrument range is probably top 5 in the industry. They also have CFDs and non-CFD instruments. You can choose from Stocks, Bonds, ETFs, Mutual Funds, Crypto ETPs, and managed portfolios (service as a product). Leveraged categories are Options, Futures, Forex, Crypto, CFDs (+Indices and Index options), commodities, and Forex options.

Trading Costs

Short answer, Saxo Bank is a more expensive broker. However, the point here is that with more trading turnover you have fewer fees. So Saxo is made for larger accounts, you will probably be disappointed that the minimum account deposit is $10000 for some countries. But starts from $2000. For example, Israel has $10000 but Bulgaria is set at $2000. IBKR on the other side does not have a minimum. You will still have to consider what is your optimal amount once you understand the minimum trading sizes for the instruments you trade.

Saxo Bank charges a general 0.75% conversion fee but provides interest on your account. Then there is a custody fee of 0.15% or a minimum of 5 EUR per month (for ETFs, and bonds) +VAT, $100 inactivity fee for 6 months of no trading, $1 commission on US stocks, 0.05% for Bonds, and so on. Guess all that quality platform development has to be covered somehow.

IBKR fees are actually very competitive considering the usual practice of massive brokers. There are no account fees, inactivity fees, minimum deposits, and even stock commissions for the IBKR Lite are $0. IBKR Pro has commissions although they are competitive, starting from $1 minimum up to 1% maximum. Crypto fees are up to 0.18% per $100000 trade value.

Education and Tools

Interactive Brokers could be considered a trading college. The amount of information is library level. The broker invested a lot to arrange several educational sections and related services. These are Traders Academy – quality organized courses for beginners, webinars, insights, podcasts, IBKR Quant for programming, and Student Trading Lab.

Saxo Bank also has good educational material in the form of videos and webinars, but it is not as good as IBKR’s. Beginner traders might want to look at the “How to become a better trader” series and not much else is there. There are good reads and other videos featuring knowledgeable people. The complete section is above average in quality and quantity.

Regulation and Reputation

Both brokerages hold so many licenses that it would be shorter to mention what they do not have. Know you are dealing with brokers that are supervised and any deviance or fines would be in the news. And not that they didn’t happen. Saxo Bank was fined in 2018 $320,000 for discrepancies during the SNB black swan event (CHF peg). Now, know that this amount is very affordable for such a broker.

Saxo Bank may be one of the most regulated entities in the industry, but it does not enjoy praise according to client reviews. Common complaints are terrible support, connection drops during events, unethical behavior, and too many fees. This broker has below-average ratings in the industry.

IBKR stands better than Saxo Bank and it feels more value-oriented broker than Saxo Bank in the sense it delivers rather than sells. The broker still has average ratings among the community. The majority of complaints come from bad support, auto liquidation, and complex trading platform.

Conclusion and Summary

You should be aware these brokers are great but are more for institutional and higher capital accounts. IBKR looks more friendly now toward small retail traders with interesting specialty IMPACT service but this cannot be said for Saxo Bank. Saxo still has not penetrated the US market, their steep requirements and fees are likely too much for beginners. If you are not an advanced investor requiring many different asset classes, try other brokers with better ratings and simpler services.