Understanding Inactivity Fees: IG vs AvaTrade
Inactivity fees, sometimes known as dormant account fees, are charged by brokers when a trading account shows no activity (such as opening or closing trades) over a specified period. These fees are designed to cover the administrative costs associated with maintaining an account that isn't actively generating revenue for the broker. They can significantly impact your overall trading costs, especially if you're a long-term investor or a less frequent trader.
IG Inactivity Fees
IG, a well-established and highly regulated broker, takes a relatively straightforward approach to inactivity fees. As of the time of writing, IG Group assesses an inactivity fee of £12 per month (or currency equivalent) if there has been no trading activity on your account for 24 months (two years). This fee is charged only if there are funds in the account. If your account balance falls to zero, or below the £12 threshold, no further fee will be deducted. It's a relatively long period of dormancy before the fee kicks in, which is generally favourable for traders who might have occasional breaks from the market.
AvaTrade Inactivity Fees
AvaTrade's policy on inactivity is generally more stringent than IG's. AvaTrade typically charges an inactivity fee of €50 per month (or currency equivalent) if there has been no trading activity for three consecutive months. Additionally, after 12 months of inactivity, AvaTrade applies an administration fee of €100 (or currency equivalent). This means that not only is the monthly inactivity fee higher, but it also begins much sooner, and an additional administration fee is levied after a year of dormancy. This structure could be a significant consideration for traders who anticipate periods of low or no trading activity.
Beyond Inactivity: A Broader Broker Comparison
While inactivity fees are an important factor, they are just one piece of the puzzle. A holistic view requires comparing other crucial aspects such as spreads, commissions, minimum deposits, regulatory oversight, and available trading platforms.
Comparison Table: IG vs AvaTrade (CFD Trading)
| Feature | IG | AvaTrade | Vantage (Featured Partner) |
| :-------------------- | :--------------------------------- | :----------------------------------- | :----------------------------------- |
| Inactivity Fee | £12/month after 24 months dormancy | €50/month after 3 months dormancy + €100 admin fee after 12 months | £15/month after 3 months dormancy |
| Spreads EUR/USD | From 0.6 pips (typical) | From 0.9 pips (typical) | From 0.0 pips (Raw ECN) / 1.0 (Standard)|
| Spreads GBP/USD | From 1.0 pips (typical) | From 1.7 pips (typical) | From 0.0 pips (Raw ECN) / 1.5 (Standard)|
| Spreads XAU/USD | From 0.3 points (typical) | From 0.29 points (typical) | From 0.1 points (typical) |
| Commission (Forex)| Usually spread-only (CFDs) | Usually spread-only (CFDs) | Raw ECN: $3.0/lot per side; Standard: spread-only |
| Min. Deposit | £250 (CFD account) | £100 (or currency equivalent) | £50 |
| Regulators (UK) | FCA, BaFin, ASIC, MAS, etc. | CBI, ASIC, FSA, B.V.I FSC, etc. | FCA, ASIC, VFSC, etc. |
| Platforms | Proprietary, MT4, ProRealTime | MT4, MT5, WebTrader, AvaTradeGO | MT4, MT5, WebTrader, cTrader |
*Figures are typical at the time of writing — always check the broker's official website for the most up-to-date information.*
Regulation and Security
Both IG and AvaTrade are well-regulated brokers. IG is authorised and regulated by the Financial Conduct Authority (FCA) in the UK, which is one of the strictest regulatory bodies globally. This provides a high level of protection for UK clients, including access to the Financial Services Compensation Scheme (FSCS) up to £85,000 in the event the firm fails. AvaTrade is regulated by multiple authorities globally, including the Central Bank of Ireland (CBI) for its European operations. While not directly FCA-regulated for its international entity, it maintains a strong regulatory framework across various jurisdictions. For UK clients, ensuring you are onboarded with the appropriate regulated entity is paramount.
Trading Platforms
IG offers a robust proprietary platform known for its advanced charting tools, customisable layouts, and sophisticated order types. It also supports MetaTrader 4 (MT4) and ProRealTime, catering to both novice and experienced traders looking for advanced analysis capabilities.
AvaTrade provides a broader suite of platforms, including MetaTrader 4 (MT4) and MetaTrader 5 (MT5), its own WebTrader, and the mobile-optimised AvaTradeGO app. This variety ensures traders can choose a platform that best fits their trading style and device preference, with MT4 and MT5 being industry standards.
Verdict by Trader Type
For the Infrequent or Long-Term Trader
If you anticipate long periods of inactivity or prefer a buy-and-hold strategy for certain assets, IG might be the more appealing option. Its 24-month inactivity period before fees are applied is significantly more forgiving than AvaTrade's 3-month window and subsequent additional administration fee. This provides greater flexibility without the constant worry of incurring charges for dormant accounts.
For the Active or Frequent Trader
For active day traders, swing traders, or those who consistently engage with the markets, inactivity fees are less likely to be a concern, as their trading volume will naturally avoid these charges. In this scenario, factors like raw spreads, commission structures, and platform features become more dominant. Both brokers offer competitive environments, but AvaTrade's slightly higher spreads on major forex pairs for their standard accounts might be a consideration. Active traders should also consider the tools and charting capabilities of each platform.
For Cost-Conscious Traders (Beyond Inactivity)
While this comparison focused on inactivity fees, overall trading costs are paramount. Traders should always factor in typical spreads, overnight financing charges (swaps), and any commission fees. Both brokers offer competitive pricing models, often with spread-only accounts for CFDs. For those seeking even tighter spreads and potentially lower overall costs on an active basis, exploring brokers like Vantage, our featured partner, which offers competitive Raw ECN accounts, could be beneficial. Consider opening a Vantage account to explore competitive trading conditions.
Remember, CFD trading carries significant risk and can result in losses. It is not suitable for everyone and you should ensure you understand the risks involved.
Frequently Asked Questions (FAQs)
## What is an inactivity fee and why do brokers charge it?
An inactivity fee is a charge levied by a broker on a trading account that has shown no activity (such as opening or closing trades) for a specified period. Brokers charge these fees to cover the administrative and maintenance costs associated with keeping dormant accounts open and operational.
## How can I avoid inactivity fees with IG and AvaTrade?
The easiest way to avoid inactivity fees is to ensure you place at least one trade (open or close a position) within the broker's specified inactivity period. For IG, this is within 24 months, and for AvaTrade, it's within 3 months. Even a small trade can reset the clock on inactivity.
## Are inactivity fees the only extra cost to consider?
No, inactivity fees are just one potential cost. Other significant costs include spreads (the difference between the buy and sell price), commissions (if applicable), overnight financing charges (swap rates for holding positions overnight), and withdrawal fees. Always review a broker's full fee schedule.
## Is one broker
Next step
Open a Vantage account. CFDs carry a high risk of losing money.