In Sharia law it is not allowed to have any interest applied for an overnight position. This is important for Muslim traders because Sharia law forbids Muslims from charging and paying interest on a loan. Fortunately, swap free accounts are considered acceptable due to the fact that there is no interest applied, and commerce and trading has always been an activity that has been encouraged by Islam. So, how is it that a swap free trading account can work without overnight interest?
Normally, for positions held overnight the Forex broker will retain a portion of the interest swap as handling charges. The trader will then not be charged any interest or get to earn any interest on his trade, and since no swaps were involved, this type of trading account is called a swap free account.
The following are a list of great brokers that offer a swap free or Islamic account. They are not listed in any particular order or ranking but is just a list of the top 17 brokers with these types of accounts. Alpari was established in and relaunched in Alpari gives their traders access to more than markets in Forex, Stocks, Indices, Metals and Cryptocurrencies. Both beginner and experienced traders will find a good fit with Alpari with demo accounts and educational resources as well as boasting more than US Dollar 1.
They also boast an impressive list of awards. FXTM offers tight spreads, trading in all currency pairs as well as a wide range of other financial products and derivatives. They off over 55 currency pairs for Forex trading. XM offers 2 trading platforms which are accessible from both real and demo accounts; both MetaTrader 4 and MetaTrader 5, the most widely used platforms in trading. GO Markets , established, in , is one of the leading and trusted Australian regulated brokers and was established in AvaTrade was founded in with headquarters in Dublin, Ireland.
The Exness Group, founded in , is a St. Petersburg, Russia based brokerage firm. They offer access to more than financial instruments to trade across which include Forex, Crypto, Stocks and Indices. In Forex they offer currency pairs to choose from.
The Exness Group has a monthly trading volume of more than US Dollar billion, as well as 15, new accounts opened each month, with more than 80, active traders. HotForex is a Cyprus based broker that was founded in It has several global satellite offices in Dubai, South Africa and offshore entities in St Vincent and the Grenadines. The company was listed as on the Top Companies by World Finance Magazine and they received the award for Business Excellence in Commission-free trading for Forex pairs is offered on every account.
Plus , founded in , based in Israel offers a wide range of financial markets with relatively low spreads and no commissions. They are a no-frills CFD provider, not offering a lot of extra services but are solid in what they do offer. Plus offers over instruments and their platforms are both very easy to use and user intuitive while offering good advanced tools. The firm started off as a broker that only offered Forex trading and has since expanded its product offerings to include Cryptocurrencies, Commodities, Stocks and Market Indices and now boast more than 10 million users in countries worldwide.
XTB has a great range of financial instruments for both its standard and pro account types. AxiTrader is an Australian based company founded in They also have offices in London, which were opened in They offer more than 40, registered traders in over countries and boasts a monthly client trading volume of around US Dollar billion.
International Capital Markets Pty Ltd IC Markets was founded in with a team of financial professionals who had the vision to bridge the gap existing between retail and institutional clients. One of the ways they do this is by being an ECN broker, which means that there is a no-dealing-desk. FXCM was founded in , and it has grown to be one of the leading providers of online trading and is known for fast trade executions and advanced and innovative technology.
FxPro offer incredible execution speeds, with an average execution time of less than ThinkMarkets keep the funds of clients in segregated accounts with top-tier banks such as Barclays, National Australia Bank as well as the Commonwealth Bank of Australia which prohibits the use of client funds for any reason. Enter the volatile oil trading markets with AvaTrade. Stock market indices directly linked to global stock markets without accumulation of swaps.
Pay only the bid-ask spreads on your AvaTrade Islamic trading account. AvaTrade has introduced its Islamic trading account, fully in line with Islamic rules. Customers with an Islamic trading account will not be charged daily swaps. The swap fees are fully transferred within the MT4 platform into daily administration fees on all Forex trading products. We offer our clients a solid, secure product, which respects their principles and follows the rules of Islam.
AvaTrade is not a legislative institution; therefore do not take this Islamic Account definition as permission to trade. Please verify all trading is in accordance with your beliefs. Obviously the main attraction of the Islamic account is that it allows those who follow Sharia Law to trade on the markets without breaking with their faith. It also allows traders to stay true to their morals and ethics.
Islamic accounts are founded on the principles of fairness and transparency in financial markets. While these accounts are based on Sharia Law that is followed by Muslims, these Islamic accounts are also available to non-Muslims.
Islamic accounts at AvaTrade ensure that there is financial inclusion for all. AvaTrade does not offer cryptocurrency trading in their Islamic accounts, however they do offer traditional fiat currency, or forex, trading. It has been determined by Muslim scholars that forex trading is halal, as long as the trading adheres to several principles, all of which are included in the conditions of our Islamic accounts.
Currency exchange and profiting from currency exchange is allowed under Sharia Law because any individual has the right to pursue activities that allow them to improve their financial condition. This is because when you purchase a CFD you are not actually purchasing anything tangible. Instead you are speculating on the price rising or falling. In CFD the trader is leveraging the value of the stock in order to make profits. By opening a no-swap Islamic account the trader is avoiding the issue of taking or giving riba.
AvaTrade makes Islamic accounts available to any trader who wishes to abide by Sharia Law and remain halal in their trading practice. Still don't have an Account? Sign Up Now. Islamic Account.
If you would like to choose one of the best Islamic Forex accounts, there are some important elements to keep in mind. We have added below some of the essentials to consider. Regulations are important for all traders when choosing from a list of the best Islamic Forex brokers. Regulations will guide, restrict, and instruct brokers on how to administer accounts. The relevant regulatory bodies will protect traders from fraud or any other illegal misconduct. It is common that the top Islamic Forex brokers are compliant with more than one regulatory body.
Also, there are certifications for Forex Islamic accounts in Halal. A swap is a fee that is charged to those who leave a position open for more than 24 hours. It is a type of interest and therefore, it is not allowed for those who comply with Sharia. The solution for most brokers is to apply fixed fees or commissions on Islamic trading accounts that maintain longer-term overnight positions.
Some brokers will only allow you a limited amount of time in which you can trade swap free. This is known as no-swap or swap free periods. Only the better Islamic Forex brokers will allow unlimited swap free trading. It is always important to read the terms and conditions published by any Islamic Forex broker because that is where the small print is. For example, the broker may not charge an interest rate, but there will most likely be a commission instead, so it is important to be sure of all such terms as these will probably affect your cost of trading when you open an Islamic trading account.
According to Sharia law, there are a number of prohibitions applicable to Islamic traders. These reflect Islamic guidelines aimed at ensuring a prosperous and peaceful community. The major prohibitions are outlined below:. Overnight rollover is the interest that a trader is charged or sometimes paid for holding a position overnight. As an Islamic trader you will probably be charged a fixed commission per trade instead to make up for not being charged a commission.
It is important to note that in most cases, each currency will have a different interest rate and therefore most likely differential commission rates, so it might be a good idea to look at the applicable fee before opening a position in a particular Forex currency pair or cross. A margin deposit is an interest based on the cash deposit made with a Forex broker, which a few brokers offer to larger clients.
Since margin trading involves a higher risk, the trader must present an initial amount before opening a leveraged position. Those who are compliant with Sharia law may not receive or give loans with interest. The Riba principle is broken by any trading on margin because margin involves the loan of money at interest given out by a lender who seeks benefit.
Short sales in the sense of shorting an equity go against the Gharar principle because a true short seller is selling something they do not own. A forward sale is an agreement between two parties to buy or sell an asset at a specified price at a future date.
Again, it is contrary to the Gharar principle. In order to open an Islamic Forex account, you might be asked by the broker to present a few documents, such as your ID and a document as proof of your faith. An Islamic trading account attempts to apply Islamic Sharia law to online Forex trading.
Therefore, it is for Muslims; those who wish to follow the teachings of the holy Quran. The Quran prescribes a religious law known as the Sharia that has certain rules on how humans should live in society. It includes principles of behavior on finance, family matters, nutrition, and more. Both Halal and Haram are terms that are applied by Islamic doctrine to all aspects of life. Haram means anything that is forbidden by the Islamic law. Halal, on the other hand, are all the practices that are allowed by the Sharia.
We have examined this question elsewhere in detail. Islamic accounts can offer any markets for trading if the asset itself is compliant with Sharia law, as long as the basic principles against Riba etc. However, some assets are not. For example, an Islamic account could not offer trading in the shares of a company which manufactures alcoholic beverages as such beverages are forbidden in Sharia and no Muslim should profit from them.
One of the best advantages of Islamic accounts is that those who are Sharia compliant can trade without going against their beliefs. Also, without any swap fees, traders can go a long time without being required to make any interest payment.
Another benefit is the Mudarabah Agreement where both parts will share profit and loss. A potential disadvantage of an Islamic account is that you may sometimes need to pay quite a lot in commission in place of overnight swap fees. Malaysia is an emerging Asian economy, and Forex trading is gaining popularity there.
The SCM maintains a Public Register of License Holders on its website, and traders may check the Malaysian website of their preferred international broker and cross-reference the given license number with the SCM database. It is legal for Malaysians to trade with offshore brokers, as long as they are compliant with domestic laws.
There are three things Malaysian traders should seek from their broker. Primarily, an Islamic account compliant with Sharia law. It is essential to read the terms and conditions carefully, as sometimes the minimum deposit is increased, or the swap-free offer is time-limited. Local bank transfers in the Malaysian Ringgit will ensure easy money management to and from the broker, while mobile trading remains a fast-growing trend across the Malaysian retail sector.
An Islamic trading account is a trading account which operates in compliance with Islamic Sharia law. On this platform, Muslim traders cannot receive or charge interest. Thus, the broker charges a flat rate for most of the services it offers to Muslim traders on its platform. Similar to the other account type, Islamic forex accounts enjoy numerous features such as the MetaTrader platforms, trading tools, indicators, EAs, and more.
IC Markets wants to provide its clients with Islamic accounts that offer state of the art trading infrastructure and execution speeds. Thus, giving Muslim traders a competitive edge in the marketplace. Pepperstone Islamic accounts are available after a client opens a standard ECN account, where they will be given the option to operate an Islamic forex account.
For Islamic accounts on Pepperstone, traders are not charged swaps or rollovers on overnight positions. Rather, the broker charges administrative fees, which is legal according to the Islamic Shariah law. The Islamic forex account operators enjoy all the benefits of regular accounts such as trading platforms, tools, indicators, news, technical analysis, and more.
The trading account is interest-free, enabling traders to take advantage of the cutting-edge trading technology and deep liquidity provided by Pepperstone. FXTM is another leading Islamic broker. However, those running Islamic accounts have a limited number of currency pairs they can trade. The traders have access to the trading platforms and all the features that comes with them. Forex Islamic accounts are the swap-free accounts as they have no swap or rollover fees for overnight positions.
Since interest is against the Shariah law, Muslims are prohibited from taking or giving interest in their business activities. Because of this rule, most forex brokers have separate Islamic accounts for Muslims that are in line with the Sharia law. When it comes to Islamic accounts, there are no fees paid in the form of interests. The fee for rolling over a position overnight in the forex market is an example of an interest payment.
The payment is made when a trader is carrying over a trading position to the next trading day. Since it is against the Islamic law, rollover fees and other interest-based fees are not charged on Islamic forex accounts. A swap-free account is the same as an Islamic forex account. The two terms are used interchangeably, but they represent the same term.
In both of them, interests are not paid for trading forex and other financial instruments. There are not many differences between the Islamic forex account and the basic accounts. The only major difference is the absence of swap commissions. The lack of swap fees can be a huge advantage for traders as it allows them to open long-term trading positions without running the risk of reducing their profits because of the swap commissions. One of the most important features to check in a forex broker is to see if it has good customer service.
As an Islamic forex trader, your needs are different from those of regular traders, and a good broker should have a support team that is readily available to help you whenever you have a problem with your swap-free account. You should check the regulatory status of a broker before you open an Islamic forex account with them.
The regulated brokers can be held responsible for any misgivings, or they can play a role in solving any issue that affects their customers. Such brokers also provide adequate security measures to ensure the safety of your personal data and funds. The best Islamic forex brokers are those that offer a wide range of deposit and withdrawal options for clients. They also process the payments instantly.
Choose brokers that process payments within 1 to 2 days. This is important when withdrawing your earnings. Check to see if the forex broker has a presence on the international stage. Those available in multiple countries usually offer personalized services based on the needs of the traders in a certain country. If they have an international presence, they might offer local seminar presentations and training to help aspiring and active traders.
The international brokers also hire customer support staff from various countries, which makes it easy for you to communicate with them in your local language. Look at the commissions and fees for an Islamic account. Keep in mind that there are no interest-based fees and commissions like rollover fees when trading with an Islamic forex account.
According to the Islamic faith, interest leads to negative growth. While it may increase money quantitatively, there is no progression in social wealth. Islamic law stipulates that interest corrupts the society. Swap-free is another term for interest-free. A crucial part of forex trading is paying various interests like Rollover fees.
With Islamic forex accounts, there are no such interest fees. Thus, the reason why it is called the swap-free forex account. Similar to stocks and other financial markets, there is an ongoing debate amongst Islamic scholars regarding forex trading.
Forex is referred to as foreign exchange, FX and currency trading as well. It is regarded as a decentralized global The idea of giving the margin bonus came from the A quarterly report was issued by the ATFX broker in order to provide the latest trends in the market. Why you should choose swap free forex brokers? What are the important facts to be considered before choosing a swap free account forex broker?
Therefore before choosing these merchants there is a certain criteria you should always check for: The broker should have a complete access to the funds that are compel for trading It should not charge any of the interest for the overnight position He should not charge any of the extra fees Always keep an eye that all of the position are already closed a second before the completion of the 24 th hour of the day.
Top Online Forex Brokers. Featured Forex Broker. Latest Forex Brokers News. Read More. How to become a forex broker? What is a Currency Chart in Forex? What is Margin in Forex? Islamic, swap-free accounts at IC Markets, ensure that instead of paying interest, clients are billed a flat rate financing charge. Below are some of the financing charges for holding trades overnight on some exotic trading pairs. Keep this in mind when executing your trading strategy on an IC Markets Islamic trading account:.
IC Markets makes swap-free trading simple for clients, allowing you to change both Raw Spread and Standard account types to swap-free. This means that no interest fees will ever be credited or debited to your account, no matter how long you hold trades. Pepperstone is an ECN forex broker from Australia, that specialises in the trading of forex, commodities, and indices. To open an Islamic account with Pepperstone, you must first open a Standard ECN account and then via your secure client log-in, request that the account be altered to swap-free.
The Pepperstone Islamic account is only available to clients who practice Islam, and not for anyone who wants to try a swap-free trading strategy. Some Muslims may find this process of having to prove to their forex broker that they are Muslims and not just looking to implement a trading strategy without daily rollovers, quite intimidating. If your Pepperstone account is changed to an Islamic account, then instead of paying interest in the form of swaps or rollovers on overnight positions, you will instead pay an administration fee that is acceptable in Shariah law.
You will trade under STP conditions and see the type of tight spreads and choice of trading platforms that Pepperstone is famous for:. One of the other most popular Australian forex brokers, AxiTrader, also has an Islamic forex broker account option. This distinction is a common practice in Islamic finance, something that the company knows all too well after having set up a major Middle Eastern arm of their business called AxiTrader ME. With a major customer hub operating out of the Middle East, AxiTrader can truly be called an Islamic forex broker, employing the expertise required to ensure the delicate balance between respecting faith and having the ability to professionally trade forex.
While FXTM does offer Islamic forex broker accounts, there are a few conditions that Muslim traders have to be aware of before they make a final decision on where to open an account. The swap-free option at FXTM is available on all of their trading account types, but traders are unable to log into them on the MT5 trading platform. The other condition that Muslims looking to open a swap-free account at FXTM need to be aware of, is that there are limitations on which currency pairs you can trade without accruing swaps.
With Islamic trading accounts only available for clients in selected countries, FXTM requires you to first apply for a standard trading account, then apply for a swap-free addition to your account through your MyFXTM client back end and then finally to select swap-free markets from the markets navigator in the sidebar of MT4. Known as a premium, multi-asset online brokerage, ThinkMarkets are much more than a forex broker. A fact that is reflected in the full suite of CFDs that they offer to the Islamic trading community.
ThinkMarkets offers traders the option to trade swap-free on positions held overnight, with a fully Sharia-compliant account. A ThinkMarkets Islamic account is completely swap-free. What this means is that Muslims can be assured that their positions held overnight in their trading account will never accrue interest riba. Instead, clients are charged a simple, weekly administrative fee for positions held for seven days or more.
To open an Islamic trading account with ThinkMarkets, traders must follow 3 simple steps. EasyMarkets are another broker who is known as specialists in the field of trading CFDs, but offer a guaranteed stop loss and take profit to all clients. Their reputation as a simple, yet honest broker makeseasyMarkets a popular choice for traders looking to open a swap-free or Islamic forex broker account.
Yes,easyMarkets offer trading accounts that adhere to Islamic laws Sharia. On alleasyMarkets Islamic trading accounts, when traders extend their strategy to hold a position overnight, no rollover fees will be charged the following day. After this period, open positions will automatically expire.
EasyMarkets Islamic accounts with a swap-free option are only offered to clients who are following Islamic laws and are once again, not for regular traders who simply want to avoid swaps in their trading strategy. Like we spoke about in the Pepperstone Islamic account section above, please keep this in mind when making an application so as not to run into any unintended offense.
All AvaTrade Islamic accounts opened by Muslim clients are managed according to Sharia law and as a result, forex traders of the Islamic faith can feel confident trading with AvaTrade. With over 10 years of experience as a global forex broker, Muslims can feel safe that AvaTrade delivers on its promises. Your account manager will make the change to a swap-free account, ensuring that your trading is always fully compliant with Sharia law.
For your account manager to give the green light on the swap-free option, your account must first be fully verified and already funded. If it just sits there unfunded, then it will never be changed to swap-free and a moral dilemma may be presented. From there, requests for Islamic accounts are usually processed within business days, with the process being moved faster if a customer support request is submitted. At the social trading broker eToro, while copy trading is a little different from making the decisions yourself, the same issues around accruing interest on positions apply.
At eToro, forex traders of the Muslim faith can copy trade on Islamic broker accounts that remain fully compliant with Sharia law. The benefits of an eToro Islamic account include zero interest on settlements of more than 24 hours. Furthermore, there will never be any additional commissions charged for trades held over 24 hours. This is a huge plus when compared to the other best broker accounts reviewed on this page. When copy trading on an eToro Islamic account, Muslim forex traders will never have charges, commissions or account management fees applied to their trading.
This means that the only revenues made by the broker off Islamic accounts come from the spreads. This is massive! Keep in mind that this also applies to all other fees and loans. With leveraged trading essentially relying on a loan from your broker, it is technically not permissible in Islam. To ensure full Sharia compliance on all Islamic trading accounts, eToro provides no interest leverage to clients. The application to trade swap-free is then made through your client account area, in consultation with support.
The question whether forex is halal or haram is one of the most common questions throughout the world. It is also one of the most complex and difficult questions to answer. Haram means something that Allah and the Prophet have completely and specifically forbidden. While forex trading itself is not haram, aspects of trading such as the accruing of interest or the reckless side of gambling without a trading strategy definitely are.
We highly encourage you to also continue to conduct your own research before making a decision on the forex broker that you in yourself are most comfortable with. An Islamic forex broker account, sometimes referred to as swap-free accounts, are trading accounts for Muslim clients who are unable to earn or pay interest due to their religious beliefs.
An Islamic forex account option is available from many of the best Islamic forex brokers that are listed in the review above. Swap-free trading accounts do not pay or earn swaps when overnight positions are held on most markets within the forex, commodities and indices categories keep in mind that cryptocurrencies such as bitcoin are different again.
Therefore, the difference between the interest rates can determine whether a trade ensures a positive or negative SWAP according to existing market conditions. Forex trading is a leveraged product that works on huge margin and significant volatility.
Unlike other exchanges, Forex is a 24 hours market that is open for five days a week covering most major economies in the world. Of course, the volatility and trading volumes fluctuate throughout the trading sessions, but a currency pair will experience some amount of activity in the market at any time of the day. The Forex trading market is home to different types of strategies that involve both short-term as well as long-term trading.
A majority of retail traders typically opt for short-term trades that are usually over within the matter of a few minutes or hours; however, long-term traders often hold on to positions that can run for days, weeks, and even months.
Therefore, long-term traders that hang on to overnight positions will be subjected to different SWAP rates that are calculated according to the prevailing interest rates and the amount of liquidity in the markets.
Sometimes, brokers may also charge interests on margin trading , which can be added on to the SWAP rates for overnight positions. Forex trading on margin involves the broker investing their money in the markets on behalf of the trader. Brokers might require their clients to pay daily interest on the amount invested in the market as overnight interest rates.
Therefore, traders should consult with their brokers on the interest rates applicable to Forex trading while using high amounts of leverage. Forex trading allows an investor to go long or go short on a currency pair, which essentially means that a trader can buy or sell a currency against another currency.
If a base currency of a currency pair has a higher interest rate than the quote currency, the trader earns a positive interest for going long, while all short positions on the currency pair will involve a negative interest or interest paid to the broker. Some traders use SWAP extensively to earn a significant amount of income through positive SWAP, without risking their money on the market fluctuations or speculating in the market.
Often, traders also use SWAP along with market speculation to increase their returns in the Forex markets. The ideal scenario for a positive SWAP is for the base currency to have a higher interest rate while the quote currency should have a lower interest rate. The forex market and the forex trading include many terms, and all these terms hold their separate importance in the The actual meaning of what is trade?
Forex is referred to as foreign exchange, FX and currency trading as well. It is regarded as a decentralized global The idea of giving the margin bonus came from the A quarterly report was issued by the ATFX broker in order to provide the latest trends in the market. Why you should choose swap free forex brokers?
What are the important facts to be considered before choosing a swap free account forex broker? Therefore before choosing these merchants there is a certain criteria you should always check for: The broker should have a complete access to the funds that are compel for trading It should not charge any of the interest for the overnight position He should not charge any of the extra fees Always keep an eye that all of the position are already closed a second before the completion of the 24 th hour of the day.
Top Online Forex Brokers. Featured Forex Broker. Latest Forex Brokers News. Read More. How to become a forex broker?