Is there a downside to buying VTI and VOO from Interactive Brokers (i.e. potentially too high fees)?

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zirkel
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Joined: Thu Jan 13, 2022 8:54 pm

Is there a downside to buying VTI and VOO from Interactive Brokers (i.e. potentially too high fees)?

Post by zirkel »

Is there a downside to buying VTI and VOO from Interactive Brokers (i.e. potentially too high fees)?
I am not from the US so I don't have the option to create a Vanguard account.
AlohaJoe
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Re: Is there a downside to buying VTI and VOO from Interactive Brokers (i.e. potentially too high fees)?

Post by AlohaJoe »

zirkel wrote: Thu Jan 13, 2022 8:57 pm Is there a downside to buying VTI and VOO from Interactive Brokers (i.e. potentially too high fees)?
What fees are you talking about?
muffins14
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Re: Is there a downside to buying VTI and VOO from Interactive Brokers (i.e. potentially too high fees)?

Post by muffins14 »

AlohaJoe wrote: Thu Jan 13, 2022 9:44 pm
zirkel wrote: Thu Jan 13, 2022 8:57 pm Is there a downside to buying VTI and VOO from Interactive Brokers (i.e. potentially too high fees)?
What fees are you talking about?
I think IBKR Pro is $0.0035 per share, IBKR Lite is free. Is that right?
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gougou
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Re: Is there a downside to buying VTI and VOO from Interactive Brokers (i.e. potentially too high fees)?

Post by gougou »

30% withholding tax on dividends unless reduced by treaty.

Technically 40% estate tax over $60K but I’m not sure how that’s implemented in reality.

This isn’t specific to IBKR. You’ll pay these taxes regardless what broker you use.
AlohaJoe
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Re: Is there a downside to buying VTI and VOO from Interactive Brokers (i.e. potentially too high fees)?

Post by AlohaJoe »

muffins14 wrote: Thu Jan 13, 2022 9:47 pm
AlohaJoe wrote: Thu Jan 13, 2022 9:44 pm
zirkel wrote: Thu Jan 13, 2022 8:57 pm Is there a downside to buying VTI and VOO from Interactive Brokers (i.e. potentially too high fees)?
What fees are you talking about?
I think IBKR Pro is $0.0035 per share, IBKR Lite is free. Is that right?
So you're worried that if you buy $1,000,000 of VTI you have to pay $15 in fees?
typical.investor
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Re: Is there a downside to buying VTI and VOO from Interactive Brokers (i.e. potentially too high fees)?

Post by typical.investor »

AlohaJoe wrote: Fri Jan 14, 2022 2:39 am
muffins14 wrote: Thu Jan 13, 2022 9:47 pm
AlohaJoe wrote: Thu Jan 13, 2022 9:44 pm
zirkel wrote: Thu Jan 13, 2022 8:57 pm Is there a downside to buying VTI and VOO from Interactive Brokers (i.e. potentially too high fees)?
What fees are you talking about?
I think IBKR Pro is $0.0035 per share, IBKR Lite is free. Is that right?
So you're worried that if you buy $1,000,000 of VTI you have to pay $15 in fees?
Yeah but you'd likely get a better price on IBKR Pro wouldn't you? Exchanges are paying IBKR to direct traffic their way with Lite. But yeah, I get your point ... it's not so much.
tomsense76
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Re: Is there a downside to buying VTI and VOO from Interactive Brokers (i.e. potentially too high fees)?

Post by tomsense76 »

typical.investor wrote: Fri Jan 14, 2022 2:43 am
AlohaJoe wrote: Fri Jan 14, 2022 2:39 am
muffins14 wrote: Thu Jan 13, 2022 9:47 pm
AlohaJoe wrote: Thu Jan 13, 2022 9:44 pm
zirkel wrote: Thu Jan 13, 2022 8:57 pm Is there a downside to buying VTI and VOO from Interactive Brokers (i.e. potentially too high fees)?
What fees are you talking about?
I think IBKR Pro is $0.0035 per share, IBKR Lite is free. Is that right?
So you're worried that if you buy $1,000,000 of VTI you have to pay $15 in fees?
Yeah but you'd likely get a better price on IBKR Pro wouldn't you? Exchanges are paying IBKR to direct traffic their way with Lite. But yeah, I get your point ... it's not so much.
Would think so. Though this seems tricky to measure.

Right you are referring to payment for order flow. This isn't unique to IBKR Lite though. Other brokerages use this as well.

Think this helps explain the pricing plans.

Personally just buy VTI there. If I look at the fees I paid in the last year, it is less than 1bps. Though if the price I'm able to get is lower than other brokerages, this is likely recoverable. So negligible.
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Hyperborea
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Re: Is there a downside to buying VTI and VOO from Interactive Brokers (i.e. potentially too high fees)?

Post by Hyperborea »

Why not just buy VWRD (Vanguard World ETF) or VWRA (accumulating version) as appropriate? Both are Irish domiciled and sold on a number of exchanges in a number of currencies. That way you save the US taxation hassles and estate tax issues. Is there some special reason to take that cost?
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JohnWild
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Re: Is there a downside to buying VTI and VOO from Interactive Brokers (i.e. potentially too high fees)?

Post by JohnWild »

For those that are IBKR Pro users, do you all reinvest dividends automatically? I thought I had read the (minor) fees are assessed on reinvestment of dividends. Wonder if long term that would drag the return down significantly.
Loandapper
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Re: Is there a downside to buying VTI and VOO from Interactive Brokers (i.e. potentially too high fees)?

Post by Loandapper »

JohnWild wrote: Fri Jan 14, 2022 7:15 am For those that are IBKR Pro users, do you all reinvest dividends automatically? I thought I had read the (minor) fees are assessed on reinvestment of dividends. Wonder if long term that would drag the return down significantly.
IB Pro user here with a high six-figure balance of VTI, ESGV, VGT and VHT set to automatically reinvest dividends. In 2021, I paid a total of $7.53 in commissions and $3.16 in "other fees." I think $2 of that was because I had more than one withdrawal in a couple of months. (Your first cash withdrawal from IB every month is free. Everything after that costs $1.)
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