When looking for the best broker in Israel for US stocks, ETFs, or options strategies, your biggest cost usually isn’t commissions - it’s what adds up quietly in the background: currency conversion, dividend withholding, spreads, and how a broker handles idle cash. Small differences here can cost hundreds to thousands of dollars a year, and they rarely show up on a fee schedule’s headline number.
This comparison covers the three platforms most commonly searched by Israeli investors: Interactive Brokers, Saxo Bank, and eToro.
⚠️ Important Disclaimer: Tax treatment depends on your personal situation and may vary by broker structure and jurisdiction. Always verify details with a qualified tax advisor.
Interactive Brokers (IBKR): Best Overall for Israeli Investors
Best for: active investors, options traders, portfolios above roughly $10K-$25K
Key advantages:
- Currency conversion: IBKR’s manual conversion route (IDEALPRO) runs at roughly 0.002% - effectively the interbank rate, with a $2 minimum. This is the rate to use for any conversion above a few hundred dollars. IBKR’s automatic conversion (triggered when you buy an asset in a currency you don’t already hold) adds a separate markup of roughly 0.03% - still cheap relative to most brokers, but noticeably worse than the manual route for larger amounts. Convert manually via IDEALPRO before a large purchase rather than letting the platform convert automatically.
- Full access to US markets: stocks, ETFs, options, and futures - the same access American investors get.
- Options trading support: multi-leg strategies, real-time Greeks, low commissions. If you’re using strategies like covered calls, TQQQ positions, or cash-secured puts, this matters directly.
Estate tax note: non-US investors holding US-domiciled ETFs like TQQQ may be exposed to US estate tax on assets above roughly $60,000 - a real consideration for long-term holders, independent of which broker is used. Confirm the current threshold and your specific exposure with a tax advisor before building large positions.
Downsides: the Trader Workstation (TWS) platform has a real learning curve and isn’t the easiest entry point for a complete beginner.
Saxo Bank: Premium Alternative
Best for: large portfolios, investors prioritizing stability and institutional infrastructure
Strengths: a regulated European bank (Denmark), strong custody and infrastructure, and access to global markets beyond just the US.
Weaknesses: higher commissions than IBKR, roughly 0.25% FX conversion cost - meaningfully higher than IBKR’s manual rate - and less competitive for active or frequent trading.
Saxo is positioned closer to a wealth management platform than an active trading one. It suits investors who prioritize institutional stability over minimizing cost.
eToro: Entry-Level Platform
Best for: beginners, small accounts, passive investors
Strengths: simple interface, copy trading features, easy onboarding.
Limitations: no options trading, wider spreads (a hidden cost per trade), and less control over execution than a platform like IBKR.
Tax handling - an important nuance: for Israeli investors, eToro applies the W-8BEN treaty rate (25%, per the US-Israel treaty - not 15%, a figure sometimes seen in outdated guides) on dividends from shares held directly. eToro offers both real shares and CFDs - if you hold a CFD, you don’t own the underlying security, and the tax treatment differs. Always confirm which product type a given position actually is before assuming the 25% treaty rate applies to it.
“Zero commission” doesn’t mean free - the cost shows up in spreads and pricing. Suitable for getting started, less so for advanced strategies.
Comparison Table (Israel-Focused)
| Feature | IBKR | Saxo Bank | eToro |
|---|---|---|---|
| US Dividend Tax | 25% | 25% | 25% (real shares only)* |
| FX Conversion | ~0.002% manual / ~0.03% auto | ~0.25% | Spread-based |
| Options Trading | Full | Limited | None |
| UCITS Access | Yes | Yes | No |
| Platform Level | Advanced | Advanced | Beginner |
| Best For | All-around | Stability | Entry-level |
eToro’s 25% applies to real shares only - CFD positions are taxed differently since you don’t own the underlying security.
The Hidden Cost Categories, By the Numbers
Currency conversion: IBKR (~0.002% manual, ~0.03% automatic) < Saxo (~0.25%) < eToro (spread-based, often the highest of the three).
Dividends: 25% US withholding applies across all three platforms for Israeli investors with a valid W-8BEN - this is a function of the US-Israel treaty, not something any broker can improve on. It’s unavoidable on dividend-paying positions, more impactful on high-yield ETFs than on low-yield holdings like TQQQ.
Spreads: matter most on eToro, where they substitute for a visible commission and increase the effective cost per trade.
Cash and interest: brokers handle uninvested cash differently - some pay meaningful interest on idle balances, others don’t. This affects total return on cash sitting in the account and is worth checking directly with each platform, since policies change.
Which Is the Best Broker in Israel for US Stocks?
Choose Interactive Brokers if: you trade options, want to minimize FX and commission costs, and want full control over execution.
Choose Saxo if: you have a large portfolio, want an institutional-level environment, and cost efficiency matters less to you than infrastructure and stability.
Choose eToro if: you’re just starting out, want simplicity above all, and don’t need options or advanced strategies.
Compare Before You Commit
- Broker Finder - Answer a few questions about your situation and get matched to the right broker.
- Broker Fee Calculator - Compare IBKR vs Saxo vs eToro on total cost - FX, commissions, and custody combined.
- Tax Map - See how Israeli investors are taxed on US dividends and capital gains, including the treaty rates that apply.
Final Verdict
For Israeli investors trading TQQQ or using options strategies, Interactive Brokers remains the most cost-efficient and capable platform overall: the lowest FX costs of the three (when converted manually via IDEALPRO), the best execution, and full strategy support.
Saxo and eToro are valid choices for different priorities - institutional stability in Saxo’s case, simplicity in eToro’s - but both involve real trade-offs against IBKR: higher costs on one side, fewer tools and no options access on the other.
A broad look at broker choice, offered without professional recommendation. Broker fees, FX rates, and platform features change - verify current terms directly with each broker before opening an account. The 25% US dividend withholding rate reflects the US-Israel tax treaty’s individual portfolio rate; see the US-Israel tax treaty guide for the full breakdown. IBKR FX rates confirmed via Interactive Brokers’ own commission and currency conversion documentation (2026).
