Best Islamic Forex Broker Accounts

The best Islamic forex broker accounts reviewed on this page are all swap-free accounts, for use by Muslims who want to trade forex. Most of the largest and most respected forex brokers offer Islamic trading accounts, including IC Markets, Pepperstone, AxiTrader and FXTM.

You can find our opinion on the best Islamic forex broker accounts below.

By Justin Grossbard / Updated: Tuesday, February 18th, 2020

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Top 8 Islamic Forex Broker Accounts

If you’re a Muslim who’s looking for a swap-free solution, the best Islamic forex broker accounts are:

  1. IC Markets – Best Islamic forex broker account
  2. Pepperstone – Best ECN forex broker
  3. AxiTrader – Handy MetaTrader 4 add-ons
  4. FXTM – CySEC regulated broker
  5. ThinkMarkets – Best CFDs trading account
  6. EasyMarkets – Guaranteed stop loss and take profit
  7. AvaTrade – Trade on fixed spreads
  8. eToro – Social trading without interest charges

Islamic Account FAQs

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. It’s an act that could be described as a sin, or simply indecent for yourself and society as a whole.

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. If you’re going to trade in a halal manner, then you must do so on an interest free account with a trusted Islamic forex broker and do so in a professional manner with the intent to make a consistent income.

We must stress that those of us at Compare Forex Brokers are not Islamic scholars, we’re simply industry experts who’ve done our research on the topic. 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). In place of overnight interest, the broker will either charge a flat rate financing charge, or simply rely on the spread to make money from each trade opened and closed by you.

If your trading strategy relies on certain exotic pairs, check with each individual broker that your particular pair is covered, before opening an account.

When trading forex, if you leave a position open overnight, then depending on the interest rates of the currency pair being traded, you’ll either accrue or pay interest known as swap. In Sharia law, interest is called riba and is forbidden. This means that Muslims who want to trade forex with a regular forex broker run into some real moral dilemmas, torn between trading profitably and their faith.

This is because unlike the financial systems that govern most of today’s developed economies where the end-game is to profit, Islamic finance take a more ethical approach. In Islam, interest is seen as unethical because it only rewards the lender, while the borrower incurs all risk.

Social and economic activity according to Islam, should promote happiness just like anything else in this life. Responsible lending without interest is just one aspect of this.

Financial regulations are implemented at the broker level, rather than the account level. This means that for example, IC Markets are both an ASIC and FCA regulated forex broker, rather than only the IC Markets Raw Spread account being regulated. If the forex broker is regulated, then every account that they offer is also regulated, including Islamic forex broker accounts.

The broker we have rated the best Islamic forex broker account is IC Markets. IC Markets is authorised and regulated by the Australian Securities and Investments Commission (ASIC), as well as the Financial Conduct Authority (FCA). Both ASIC and the FCA have a reputation as being two of the strongest financial regulatory bodies in the world. If there’s an issue with your funds, knowing you have an independent mediator to turn to for help, gives you piece of mind.

Each forex broker will have a section of their website dedicated to regulations. Check for ASIC, FCA or CYSEC regulations.

Whether spreads are wider on an Islamic forex broker account depends on the specific broker you choose. When making a decision on where to open an Islamic trading account, checking that individual broker’s trading conditions, including spreads, is key.

Spreads on some Islamic trading accounts are often slightly higher than those seen on a broker’s regular trading accounts. Islamic accounts are subjected to an increased spread across the forex market, commodities and indices. This is because the broker has to offset the cost of interest charges that are no longer being accrued when a position is held overnight.

If your forex broker offers fixed spreads on other accounts, then they will remain fixed on an Islamic account. It’s also not wise to compare spreads on a demo account to those on a live account.

Leverage in forex trading, is the ratio of your funds to the size of your broker’s credit. This means that leverage is borrowed capital that traders can use to increase your potential returns. While this is usually a huge advantage when it comes to trading accounts, this is not the case for Islamic forex traders who are unable to use borrowed credit that accrues interest.

Leverage is based on a loan from the broker and therefore a real Islamic trading account must provide for no-interest leverage. This affects the levels of leverage that each broker offers on their Islamic account and again must be determined on a case by case basis when you go to open an account with any specific broker.

While leverage allows traders to trade much bigger volumes that they would normally be able to if they were just using their own trading capital, the loan aspect of it has implications for Islamic forex traders.

Markets for traders using an Islamic account to consider

Below are some of the most frequently watched markets that can be traded using an Islamic online trading account. Choose one of the best forex brokers for you and your faith.

Islamic forex trading

Ensure you Trade forex on an Islamic trading account that is fully acceptable in the eyes of Islamic laws. By using a swap-free account from one of the brokers reviewed here, you’re able to take advantage of a massive number of forex trading pairs such as EUR/USD, GBP/USD and GBP/JPY.

If you’re trading forex on an Islamic account, some brokers limit trading on exotic currency pairs and pairs featuring cryptocurrencies such as bitcoin (BTC). If your trading strategy relies on having the ability to trade exotics and some of the riskier crosses, then make sure you consult the full list of available pairs from your Islamic forex broker of choice.

Currency trading on forex trading accounts is fully Sharia-compliant if you’re not charged daily interest known as swaps. Interest is replaced by daily administration fees or the like, charged at the broker’s discretion.

Islamic gold trading

Trading gold is one of the oldest exchanges on the planet. Throughout history, gold has been traded by Islamic businessmen in full Sharia-compliance. Alongside gold, other commodities such as silver and oil have been similarly exchanged for money, goods, and services for as long as man has walked the Earth.

Truly Sharia-compliant gold and silver trading must have a physical backing of the commodity held by the broker, so partnerships with exchanges and vaults are a must. Likewise, when it comes to other commodities such as oil, physical backing must be present. Ensure your broker ties their prices to the major futures exchanges which monitor the supply flows in global reserves.

Trading gold and other commodities on an Islamic account is permissible in Islam so long as you are not accruing positive or negative interest on your positions. Just like our ancestors traded commodities before us, ensure your trading is executed like a business and not for a gambling thrill.

Islamic indices trading

Trading all stock market indexes through CFDs can be fully Sharia-compliant if done correctly through an Islamic forex broker account. Traders of the Muslim faith can trade some of the world’s most liquid stock market indices such as the S&P500 or the DAX30.

Instead of collecting rollover interest at the end of each trading day like normal, trading indices on an Islamic trading account ensures that you’re trading in an interest-free environment. Instead, the broker charges their Islamic traders administration fees depending on the size and duration that the trade is held.

Traders are encouraged to try out their new indices trading strategy on a demo account, before going live. This goes for any financial instruments that you’re trying out for the first time as there is no risk warning required.

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