Finding the Best Broker in Israel for US Stocks (2026 Comparison)
When looking for the best broker in Israel for US stocks, ETFs, or options strategies, your biggest cost isn’t commissions.
It’s what I call “Hidden Tax Drag.”
This includes:
- Dividend withholding
- Currency conversion costs
- Spreads
- How your broker handles cash and interest
Small differences here can easily cost hundreds to thousands of dollars per year.
This comparison focuses on three popular platforms among Israeli investors:
- Interactive Brokers (IBKR) 👉 Explore IBKR here (affiliate link)
- Saxo Bank
- 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.
1. Interactive Brokers (IBKR): Best Overall for Israeli Investors
Best for: Active investors, options traders, portfolios above ~$10K–$25K
Key Advantages
Low currency conversion costs:
- ~0.002% (near interbank rate)
- Significantly cheaper than banks or most brokers
Full access to US markets:
- Stocks, ETFs, options, futures
- Same access as US investors
Options trading support:
- Multi-leg strategies
- Real-time Greeks
- Low commissions
If you’re using strategies like covered calls or cash-secured puts, this matters significantly.
Estate Tax — Important Note
⚠️ Non-US investors holding US-domiciled ETFs like TQQQ may be exposed to US estate tax on assets above ~$60,000. This is a real risk for long-term holders. The right approach depends on your individual situation — consult a tax advisor before building large positions.
Downsides
- Platform complexity (TWS has steep learning curve)
- Not ideal for complete beginners
👉 Open an IBKR account here (affiliate link)
2. Saxo Bank: Premium Alternative
Best for: Large portfolios, investors prioritizing stability and institutional infrastructure
Strengths
- Regulated European bank (Denmark)
- Strong custody and infrastructure
- Access to global markets — US, Europe, Asia
Weaknesses
- Higher commissions than IBKR
- ~0.25% FX conversion cost — significantly higher than IBKR
- Less competitive for active or frequent trading
Saxo is positioned more as a wealth management platform than an active trading platform. Suitable if you prioritize stability over cost efficiency.
3. 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
- Limited control over execution
Tax Handling — Important Nuance
For Israeli investors, eToro applies W-8BEN treaty rates (typically 25%) on dividends from shares held directly.
⚠️ Important: eToro offers both real shares and CFDs. If you hold CFDs, you do not own the underlying security — the tax treatment is different and the 25% withholding may not apply in the same way. Always verify which product type you are holding.
“Zero commission” does not mean free — you pay through spreads and pricing differences. Suitable for getting started, not for advanced strategies.
Comparison Table (Israel-Focused)
Feature | IBKR | Saxo Bank | eToro |
|---|---|---|---|
US Dividend Tax | 25% | 25% | 25% (shares)* |
FX Conversion | ~0.002% | ~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 25% applies to real shares only — see CFD note above.
The “Hidden Tax Drag” Explained
This is where most investors lose money without noticing.
1. Currency Conversion
- IBKR → ~0.002% (near interbank)
- Saxo → ~0.25%
- eToro → spread-based, often higher
2. Dividends
- 25% US withholding for Israeli investors (via W-8BEN treaty)
- Unavoidable on dividend-paying ETFs — but more impactful on high-yield ETFs than on TQQQ
3. Spreads
- Especially relevant on platforms like eToro
- Increases the effective cost per trade
4. Cash and Interest
Different brokers handle uninvested cash differently — some pay interest, others do not. This affects your total return on idle capital. Check your broker’s specific policy.
Which is the Best Broker in Israel for US Stocks?
Choose IBKR if:
- You trade options
- You care about minimizing costs
- You want full control over execution
Choose Saxo if:
- You have a large portfolio
- You want an institutional-level environment
- Cost efficiency is less important than infrastructure
Choose eToro if:
- You are just starting out
- You want simplicity above all
- You don’t use options or advanced strategies
Final Verdict
For Israeli investors trading TQQQ or using options strategies: Interactive Brokers is the most cost-efficient and capable platform overall.
Lowest FX costs, best execution, full strategy support.
Other platforms are valid — but involve trade-offs: higher costs, limited tools, or less flexibility.
👉 Start with IBKR here (affiliate link)
