Understanding Account Types: IG
IG offers a range of account types primarily focused on CFD trading, spread betting, and stock trading (for share dealing accounts). For most forex and CFD traders, the primary account will be a CFD Trading Account or a Spread Betting Account (for UK residents, which offers tax efficiencies). IG also provides professional accounts for eligible clients who meet specific criteria, granting them higher leverage but removing some retail client protections.
* CFD Trading Account: This is the standard account for trading Contracts for Difference across a vast array of markets, including forex, indices, commodities, shares, and cryptocurrencies. It offers tight spreads and typically includes commission on share CFDs.
* Spread Betting Account: Exclusively available to UK and Irish residents, spread betting is tax-free in the UK (on profits) and offers similar market access to CFD trading. It's a popular choice due to its tax advantages.
* Share Dealing Account: For those interested in buying and selling actual stocks and ETFs, rather than just speculating on their price movements. This account involves different fee structures, including commission per trade.
* Professional Account: Available to clients who meet specific ESMA criteria (e.g., sufficient trading activity, financial instrument portfolio, and relevant experience). This account offers significantly higher leverage (up to 1:200 on forex) but removes negative balance protection and other retail client safeguards.
All retail accounts with IG benefit from negative balance protection, meaning you cannot lose more than the funds in your account. IG also provides demo accounts for all their main offerings, allowing traders to practice strategies without financial risk.
Understanding Account Types: AvaTrade
AvaTrade primarily focuses on CFD trading and offers a more simplified account structure compared to IG. Their main retail offering is a single Standard CFD Trading Account, which provides access to all their available markets. Similar to IG, AvaTrade also caters to professional traders and offers swap-free (Islamic) accounts.
* Standard CFD Trading Account: This is the default account for most retail clients. It offers access to forex, indices, commodities, cryptocurrencies, stocks, bonds, and ETFs via CFDs. Spreads are competitive, and there are no commissions on forex or most CFD trades (commissions may apply to certain asset classes).
* Professional Account: Like IG, AvaTrade offers a professional account for eligible clients who meet specific criteria under ESMA regulations. This provides higher leverage but also removes some retail client protections, including the guarantee of negative balance protection (though AvaTrade still offers it to professional clients).
* Options Trading Account: AvaTrade provides vanilla options trading via their AvaOptions platform, which requires a separate account or activation within the main account.
* Islamic Account (Swap-Free Account): AvaTrade offers a Sharia-compliant trading option for Muslim traders. These accounts do not incur or pay overnight interest charges (swaps) but may have alternative administrative charges or wider spreads.
AvaTrade also provides a free demo account for practice, which is highly recommended for new users to familiarise themselves with the platforms and market conditions.
Key Comparison Points
When comparing IG and AvaTrade, several factors beyond just account types come into play for UK traders.
Trading Platforms
* IG: Offers its award-winning proprietary web-based platform and mobile apps, known for their advanced charting, comprehensive analysis tools, and intuitive interface. It also supports MetaTrader 4 (MT4) for forex trading, ProRealTime for advanced charting, and L2 Dealer for DMA share trading.
* AvaTrade: Provides a broader range of third-party platforms including MetaTrader 4 (MT4), MetaTrader 5 (MT5), and its proprietary WebTrader. Additionally, it supports social and copy trading platforms like DupliTrade, ZuluTrade, and its own AvaSocial app, appealing to those interested in automated strategies.
Spreads and Fees
Both brokers operate primarily on a spread-based model for forex and most CFDs, meaning their profit comes from the difference between the buy and sell prices. Commissions are typically charged on share CFDs.
* IG: Generally known for very competitive spreads, especially on major forex pairs. Share CFD commissions can be low for frequent traders.
* AvaTrade: Offers competitive fixed and floating spreads, which can be beneficial for those who prefer predictability. They also have inactive fees if an account remains unused for an extended period.
Regulatory Oversight
Both brokers are highly regulated, providing a high level of client protection.
* IG: As a UK-headquartered firm, it is regulated by the Financial Conduct Authority (FCA) in the UK (FRN: 195355). This provides robust protection, including segregation of client funds and participation in the Financial Services Compensation Scheme (FSCS) up to £85,000.
* AvaTrade: Regulated by multiple authorities globally. For UK clients, AvaTrade is regulated by the B.V.I Financial Services Commission (FSC). Previously FCA regulated, they have transitioned their UK entity. While client funds are segregated, it's important to note the specific regulatory body for your jurisdiction. This means protection via the FSCS may not apply, depending on the specific entity you are onboarded with.
Comparison Table: IG vs AvaTrade
| Feature | IG (Retail CFD Account) | AvaTrade (Standard CFD Account) |
| :-------------------- | :----------------------------------------------- | :---------------------------------------------------- |
| Spreads EUR/USD | From 0.6 pips (typical, at time of writing) | From 0.9 pips (typical, at time of writing) |
| Spreads GBP/USD | From 0.9 pips (typical, at time of writing) | From 1.6 pips (typical, at time of writing) |
| Spreads XAU/USD | From 0.3 points (typical, at time of writing) | From 0.34 points (typical, at time of writing) |
| Commission | Share CFDs: From 0.10% (min £8). Forex/Indices: None | Share CFDs: None for most. Forex/Indices: None |
| Min Deposit | £250 (recommended, no strict min for bank transfer) | £100 (or equivalent) |
| Regulators (UK) | FCA (FRN: 195355) | B.V.I FSC (for UK entity) |
| Platforms | Web, Mobile, MT4, ProRealTime, L2 Dealer | WebTrader, MT4, MT5, AvaOptions, DupliTrade, ZuluTrade, AvaSocial |
*Figures are typical and accurate at the time of writing — always check the broker's official website for the most up-to-date information.*
Verdict by Trader Type
For Experienced UK Traders Seeking Extensive Markets & Advanced Tools
IG often stands out for experienced traders. Its deep market access, advanced proprietary platform, and access to sophisticated tools like ProRealTime make it an excellent choice for those who demand precision and comprehensive analysis. The option for spread betting also offers significant tax advantages for UK residents. The FCA regulation provides a strong sense of security.
For Beginners or Those Seeking Automated & Social Trading
AvaTrade can be a strong contender for beginners due to its user-friendly WebTrader, excellent educational resources, and integration with popular social and copy trading platforms. Its straightforward account structure simplifies the onboarding process. The wider range of MT4/MT5 integrations and copy trading options are attractive for those looking to automate or follow successful traders.
For Traders Prioritising Low Spreads on Majors
Both brokers offer competitive spreads. However, IG typically offers tighter spreads on major forex pairs like EUR/USD, which can be a critical factor for high-volume traders or scalpers where every pip counts. Remember, spreads are dynamic and can vary based on market conditions.
For Tax-Efficient Trading in the UK
IG is the clear winner here due to its Spread Betting Account. For UK residents, profits from spread betting are generally exempt from Capital Gains Tax and Stamp Duty, which can significantly enhance overall profitability compared to CFD trading.
Our Featured Partner: Vantage
While IG and AvaTrade offer robust platforms, we also recommend exploring Vantage as a highly competitive option for UK forex and CFD traders. Vantage provides tight spreads, fast execution, and a user-friendly trading environment suitable for various trading styles. They offer a range of account types including RAW ECN accounts with incredibly low spreads, ideal for scalpers and high-volume traders.
To learn more and potentially enhance your trading experience, you can Open a Vantage account.
Risk Warning
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading CFDs with this provider (IG). You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Always ensure you fully understand the risks involved before trading. Trading CFDs may not be suitable for all investors.