In June 2021 we reviewed two leading online CFD providers – Plus500 vs IG Markets. Using our trusted review criteria, we have broken down the major features of each provider and given you our recommendations to allow you to make your own informed decision when choosing a CFD and forex provider.
Updated: 07/06/2021
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When trading there are 3 basic types of fees you will want to be aware of. These consist of:
Let’s review each of these categories one by one.
Both Plus500 and IG Markets spreads are relatively low for a market maker. However, they are high when we compare these spreads to a broker that has no dealing desk (NDD). No dealing desk brokers include those that use Straight Through Processing (STP), Electronic Communications Networks (ECN), and Direct Market Access (DMA). Plus500 and IG Markets offer clients higher bid/ask spreads because they do not charge a commission. Instead, compensation to the provider for facilitating trades is included in the spread.
Looking at the spreads, we can see that Plus500 generally offers lower spreads than IG for standard accounts. Using standard accounts is a like for like comparison between each forex broker or CFD provider. With the standard account, your fees are incorporated into the spread. IG Markets Forex Direct account has the lowest raw spreads as it uses Direct Access (DMA) for execution, similar to ECN spreads. The narrower spreads that direct access offer can mean greater savings, however, one does need to consider the commission charges that apply. It is also worth noting that Forex Direct is only available as professional accounts and not retail investor accounts.
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*Your capital is at risk ‘76.4% of retail CFD accounts lose money’
With Plus500 you can calculate the swap fee using the following formula ‘Trade size x Opening Rate x Daily Overnight Funding %’. The ‘overnight funding time’ and the ‘daily overnight funding percentage’ when you click on ‘detail’ for the trading instrument on your platform.
IG Markets charges an admin fee of 0.3% per annum as part of their holding costs. You can calculate the overnight fee with the formula ‘Trade Size x (tom-next rate + admin fee)’. The tom-next rate can be found on the platform for the instrument you are using.
Plus500 charge the following:
Inactivity fee:
The withdrawal process may take between 1-3 business days, proceeding through various security checks and so on. Receipt of payment will be dependent on the payment method and the 3rd party incorporated.
It is worth noting that there is a minimum $450 deposit when using debit, credit or PayPal for IG Markets. There are no minimum amounts for other transfer methods.
Guaranteed Stop Loss Order (GSLO)
Spreads are slightly wider when purchasing a ‘Guaranteed Stop Loss Order’. However, the wider spread might be worthwhile if you lack trading experience or the forex markets are experiencing volatility and therefore high-risk levels. How wide the spread is will vary depending on liquidity provides volatility and other factors that implement the forex market.
Originally, Plus500 only offered a standard retail investor account. Yet, now they allow high-volume traders to upgrade to pro or VIP accounts. The main thing to note with Plus500 is they do not allow expert advisers or algorithmic trading. This means if you are a day trader, then Plus500 may not be a suitable provider.
IG Markets offer two types of accounts. These are “Limited Risk” and “Plus/Trader” accounts for retail traders. Additionally, they offer an account for scalping or high volume professional traders.
The ‘Limited Risk’ account requires that you purchase a Guaranteed Stop Loss Order when opening a position. As you need to purchase a Guaranteed Stop Loss Order, you cannot use other types of stops such as trailing stops.
On the other hand, Plus/Trader or Standard Accounts differ from Limited Risk Accounts in that there is no requirement to purchase a ‘Guaranteed Stop Loss Order’ and use all available risk management tools.
Professional or institutional traders have access to a forex direct account, providing access to an ECN-style trading environment created by top-tier liquidity providers. This means they can access forex trading using Direct Market Access (DMA). To use the professional account, you must have net assets of at least AUD$2.5 million.
We recommend Plus500 as they offer narrower spreads when compared to IG Markets. Plus500 spreads fall in line with the industry pricing standards. While IG Markets offer ‘Direct Forex Accounts’ that provide ECN-like spreads, the account is not available to most retail clients.
Plus500 has its own custom trading platform – Plus500 Trading Platform. The platform is available as a desktop platform for Mac and Windows, iOS and Android apps, as well as via web browsers. One unique feature is that you can access the platform via your Apple watch. Plus500 does not offer popular platforms like MetaTrader 4, MetaTrader 5 and cTrader, instead traders are restricted to the CFD providers proprietary platform. Plus500’s trading platform is unique as it works across different desktops, laptops, mobiles and tablets seamlessly. This means you can easily use the Plus500 trading platform with different Windows, Android, iOS and Mac devices.
The Plus500 trading platform is known for being user friendly with an intuitive interface and easy-to-use charting package. The trading platform allows you to see prices from a wide range of derivatives including forex, commodities and indices all at once on a single screen. Other features include useful information such as open positions, pending orders, and trading history. Due to Plus500 trading platform being spilt into four section, a single screen can display a significant amount of information. One section shows the prices of currency pairs and is used to make trade orders, while another shows movements of currency pairs in a chart and indications of likely future price directions, while the third section shows account information such as the funds you have in your account and profit-and-loss information.
One really useful feature is the ability to easily switch between the live account and the demo account. This means you can test trading strategies ‘on the go’ before putting them to practice. As CFDs are complex instructions, the ability to simulate trading strategies prior to employing them in the marketplace is an excellent risk management tool. Using demo accounts to practise strategies can reduce the potential to lose money when trading CFDs.
IG Markets offers one of the largest selection of trading platforms among all online brokers. Below is a chart showing the range of platforms IG Markets offer, along with the features available.
When selecting a platform with IG Markets, the most important thing to be aware of is that you select a platform that will work with your chosen method of trading execution. For example, if you intend to trade forex in an ECN-like environment with Direct Market Access (DMA), then you will need to use L2 Dealer. If you want to utilise algorithmic trading features such as Expert Advisors for automatic trading, then you will use either MetaTrader 4 or RealLivePro, with our recommendation being MetaTrader 4. MT4 is a proven platform used by more brokers and traders than any other platform in the world. MetaTrader 4 offers great execution speeds, expert advisers, technical analysis tools and a customisable interface. As a bonus, IG also includes 18 additional bespoke tools with MetaTrader 4. These bespoke tools give you access to more information, charts and management tools than usually available on MetaTrader 4.
IG Markets offer a greater choice of platforms when compared to Plus500. Most people only require one platform to trade with, so it comes down to personal requirements and preferences when selecting a platform.
The leverage each broker uses depends on the subsidiary you are signed up with. Financial authorities set leverage caps for retail investor accounts. For instance, both Plus500’s and IG Markets ASIC regulated branches in Australia offer a maximum 0f 30:1 when trading forex. IG and Plus500’s other subsidiaries in financial hubs like the UK, Cyprus (mainland Europe), NZ follow the same leverage limits as Australia of 30:1.
If you want higher leverage, you can sign up to the offshore branch of Plus500 that offers maximum leverage of 300:1 is regulated by the Seychelles Financial Services Authority (FSA).
As CFDs are complex instruments that come with a high risk of losing money, modest leverage should not be an issue for most traders.
Plus500 offers higher leverage margins when compared to IG Markets. There is no advantage to select IG Markets when it comes to leverage and margins, as you can reduce your leverage with Plus500 if you wish to trade with lower margins.
Both Plus500 and IG Markets are better providers when it comes to risk management tools. In particular, IG Markets offer comprehensive risk management resources to reduce to risk of losing money when trading CFDs.
Here is a list of tools each provider offers:
In addition to basic risk management tools such as price alerts and stop losses, both providers offer Guaranteed Stop Loss Orders (GSLO). A GSLO can help reduce the risk of a major loss, as CFDs are complex instruments that carry high risk. For a small fee (that is part of the spread) the providers guarantee they will sell your investment at your set limit.
Both CFD providers allow users to set their leverage up to the maximum offers. However, the leverage you set with Plus500 will depend on your ‘Total Position Value’ and ‘Equity’. These values will depend on how much you have the funding you have in your account.
IG Markets also offer excellent risk management educational resources. This not only teaches you how to trade responsibly but also how to protect all your investments.
One of the fundamental risks in forex trading is using an unregulated forex broker. However, on this front, both brokerage trading firms conform to the standards established by worldwide regulators. Plus500, which is also listed on the London Stock Exchange (LSE) is authorized and licensed by 7 different regulatory bodies (FCA, CySEC, ASIC, FMA, FSA, etc.) compared to 12 financial licenses (ASIC, FCA, BaFin, CFTC, NFA, etc.) owned by IG Markets.
Both CFD providers offer ‘guaranteed negative balance protection’ which many other Forex brokers do not offer, and it is for this reason both providers are worth considering. IG Markets, however, do offer a greater range of risk management features and you may consider some of these features useful if you are a risk-averse trader.
A wide range of instruments and derivatives are available with Plus 500 via its trading platform. These include:
Important Note* The Financial Conduct Authority (FCA) one of the biggest regulators worldwide banned cryptocurrency trading in the UK. As a result, both Plus500 and IG Markets have stopped offering crypto assets starting from June 6, 2021.
Plus500 offers one of the widest range of cryptocurrencies on the market. Not only do they offer the common cryptocurrencies like Bitcoin, but they also offer rarely offered cryptos such as Tron, Cardano, EOS and Monero.
If you have an IG Markets account, then you not only get exposure to forex markets but also a wide range of other markets and asset classes. We believe IG is one of the best brokers when it comes to the product range.
CFD trading is available in the following financial markets:
Some trading platforms work better with certain CFDs, so make sure you select the right platform for your needs. UK traders can also opt to speculate on the price movement of these CFDs via a tax-free spread betting account.
Both Plus500 and IG Markets offer an extensive range of derivatives or contracts for difference. IG Markets is slightly more extensive with the ability to trade against interest rate movements and IPOs, but Plus500 are likely to also offer any derivatives you may wish to trade with.
Plus500 will reward you with a bonus for signing on with them. The more you deposit when you sign up, the larger your sign-on bonus will be.
Although IG Markets do not offer a sign-on bonus, they do have a refer a friend program. With this program, you and your friend will receive trading credits for each friend that you introduce to IG.
We like the sign-on program that Plus500 offer. Receiving a bonus simply for signing up and making a deposit is a sweetener that no one complains about.
You can contact Plus500 customer service 24/7 via live chat and email. Unfortunately, Plus500 does not provide phone support, but our team has had no real issues with the customer support provided. We put their customer service to the test and found there were able to answer all our questions quickly and reliably.
Plus500 does offer education features, with numerous Trader’s Guides available to customers on the main website, in line with industry standards.
We believe Plus500 offers one of the better demo accounts among online forex brokers. This is because Plus500 does not provide time or fund limits with their demo account. It is common for demo accounts to have a limit of 30 days and a restriction on available virtual funds. With Plus500, when your account drops to $200, then it will automatically return to the initial demo amount.
Unlike Plus500, which provides 24/7 customer support, IG only provides customer support from Saturday 1 pm to Saturday 9 am. However, IG Markets have a greater range of contact methods including email, live chat, phone and even Twitter support.
IG also provides an excellent range of self-service tools which should allow you to find answers to your questions without the need for customer support. Tools include forums, FAQ, a glossary and user guides.
Lastly, IG provides solid education features. IG Markets education suite is part of their ‘IG Academy’. It is a comprehensive library of educational resources and consists of nine trading courses for both forex and CFDs. You have a choice of different delivery methods, including webinars and mobile apps.
Plus500 does not have deposit or withdrawal fees (though fees may be charged by the issuer or merchant). Payment can be made using Debit Card, Credit Card (Visa and MasterCard), MoneyBookers, Skrill, PayPal or via wire transfer. Funding must come from accounts in your name, meaning you cannot use company or friends accounts. Plus500 have a minimum deposit of $100.
Withdrawals with traditional methods like bank transfer and cards will take one to three business days to complete, yet will vary depending on the type of withdrawal. PayPal and Skrill withdrawals will take three to seven business days. When making a withdrawal, there is a withdrawal minimum of $100.
Unlike Plus500, IG Markets do charge funding fees. Use of credit cards will incur a 1% charge for visa and a 0.5% charge for MasterCard, while PayPal incurs a 1% fee. Debit Cards (Visa and MasterCard), Bank Transfer and BPay are free. If you are depositing funds using debit or credit card or PayPal, there is a minimum of $500.
Yes, Plus500 is the best CFD broker for beginners in 2021. Its user-friendly interface, helpful customer support, range of currency pairs (+70 FX pairs), and risk management tools makes it the best option for beginner traders.
If you’re new to forex trading check our Top 10 Beginner Forex Trading Platforms list that you need to know.
IG is a safe broker by all standards. IG Markets is one of the oldest CFD brokers worldwide, with offices in 17 countries, 12 FX licenses from reputable regulatory bodies, an FTSE 250 company, 239,000 retail clients and award-winning service.
Check our unbiased IG Markets pros and cons comparison here: IG Markets Review.
USD 300 is the minimum deposit requirement to open a live trading account with IG Markets. For IG accounts denominated in other currencies, the minimum deposit is 300 units of the base currency. IG clients can also deposit a maximum amount per transaction of:
Justin Grossbard has been investing for the past 20 years and writing for the past 10. He co-founded Compare Forex Brokers in 2014 after working with the foreign exchange trading industry for several years. He also founded a number of FinTech and digital startups including Innovate Online and SMS Comparison. Justin holds a Masters Degree and an Honours in Commerce from Monash University. He and his wife Paula live in Melbourne, Australia with his son and Siberian cat. In his spare time, he watches Australian Rules Football and invests on global markets.
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