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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: Friday, January 17th, 2020
If you’re a Muslim who’s looking for a swap-free solution, the best Islamic forex broker accounts are:
IC Markets – Best Islamic Forex Broker AccountIf you’re a Muslim looking for the best Islamic forex broker account, then you need to look no further than IC Markets.
As in Islamic customs, Muslims are unable to receive or charge interest. To cater to the massive global demand for Islamic finance where interest is not part of the broker’s business model, IC Markets offer Islamic trading accounts with a swap-free option. Islamic, swap-free accounts at IC Markets, ensure that instead of paying interest, clients are billed a flat rate financing charge. Whether you’re trading forex, commodities or indices markets, you can be assured that you’ll never pay interest on an IC Markets Islamic account.
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:
Please keep in mind that the rates & holding periods are subject to change, reflecting high-risk market conditions at the time. IC Markets Raw Spread and Standard Account commissions and spreads apply.
IC Markets have some of the best trading conditions of any ASIC or FCA (Financial Conduct Authority) regulated forex broker and clients can be assured that their trades are being executed through the broker’s state of the art trading infrastructure setup. By running a network of strategically placed servers, forex traders of the Islamic faith can be confident that the execution speeds on their trades mean they’re afforded the same competitive advantage as the rest of the broker’s client book.
To open an Islamic forex account with IC Markets, simply apply for a Raw Spread account with the broker’s swap-free option. This means that no interest fees will ever be credited or debited to your account, no matter how long you hold trades.
Pepperstone – Best ECN forex brokerPepperstone is an ECN forex broker from Australia, that specialises in the trading of forex, commodities, and indices.
While Pepperstone has been recognised as one of the most trusted ECN forex brokers on the planet, they’re interesting here because they choose to not actively market their Islamic forex account. 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. As a result, Pepperstone doesn’t publicly advertise their swap-free, Islamic trading options. If you’re a Muslim who specifically wants to trade forex with Pepperstone on an Islamic account, then the account change is at the sole discretion of the broker.
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. While we’ve never come across any Muslims having their account change request denied, this is something to keep in mind so you’re not shocked by the process.
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:
AxiTrader – Handy MetaTrader 4 add-onsOne of the other most popular Australian forex brokers, AxiTrader, also has an Islamic forex broker account option. Like Pepperstone, AxiTrader doesn’t actively advertise their Islamic account option on their website with a dedicated landing page.
They instead have a similar process where after you’ve opened an AxiTrader Standard or Pro account, you are then required to sign a form from your client login portal to indicate that you wish for your account to become swap-free.
When trading on an Islamic account via the AxiTrader MT4 or MT5 platforms, you’ll notice in the market view that FX majors, minors and metals will all now display the .swf suffix. For example, if you’re trading EUR/USD on a swap-free account, the market will be displayed at EURUSD.swf.
All of AxiTrader’s MT4 NexGen add ons work seamlessly under swap-free trading conditions. Whether you’re after advanced trade management tools, further order placement options, or want to see where the current AxiTrader forex market sentiment is sitting, then you will face no problems on an Islamic account.
AxiTrader’s Islamic forex broker accounts are not subject to any type of interest (riba) in the form of swaps or rollovers, rather they have an administration fee applied to any positions held open for 5 consecutive days or more. 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.
FXTM – CySEC regulated brokerThe CySEC regulated broker, FXTM, is another popular choice of forex traders looking for a swap-free option to trade. 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 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. Even if you’re trading on the MT4 platform, then Islamic trading conditions still don’t apply to exotic currency pairs. Make sure you don’t get caught out by this.
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.
ThinkMarkets – Best CFDs trading accountKnown 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. Another of the global brokers with a presence in the Middle East, ThinkMarkets understands the needs of Muslims and that they must be governed by the principles of the Islamic Shari’ah. By choosing to trade with ThinkMarkets, you can be assured that you’ll remain in full compliance with Sharia law.
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. It’s worth noting that this is a weekly charge and not a daily charge like some of the other Islamic forex broker accounts highlighted in this review.
The administrative fee is made in 7-day increments, with the following rates being charged in $USD, per 1 full lot, per day:
EasyMarkets – Guaranteed stop loss and take profitEasyMarkets 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 makes EasyMarkets 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 all EasyMarkets Islamic trading accounts, when traders extend their strategy to hold a position overnight, no rollover fees will be charged the following day. This ensures that traders of the Islamic faith don’t ever accrue interest on their positions and remain fully Sharia-compliant.
Accordingly, the maximum period that you’re able to hold a position on an EasyMarkets Islamic account is 2 weeks (or 14 days). After this period, open positions will automatically expire. While this may be an issue for traders implementing long term strategies, even many swing strategies don’t require 2-week holding periods.
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. As a result, whether you’re able to open an Islamic account with EasyMarkets is up to their sole discretion. 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.
Take a look at the EasyMarkets Islamic account checklist below:
AvaTrade – Trade on fixed spreadsAvaTrade is a global giant in the forex broker space and its Islamic trading account lives up to the company’s reputation. By offering clients the option to trade on fixed spreads, they’re always trying to make sure they cater to all types of strategies.
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. t’s an important company ethos of AvaTrade to respect their Islamic clients’ beliefs and ensure the correct following of rules in Islam. With over 10 years of experience as a global forex broker, Muslims can feel safe that AvaTrade delivers on its promises.
To set up an Islamic account with AvaTrade, you must first open any of the broker’s regular account types and then contact your account manager before placing any trades. Your account manager will make the change to a swap-free account, ensuring that your trading is always fully compliant with Sharia law.
From there, requests for Islamic accounts are usually processed within 1-2 business days, with the process being moved faster if a customer support request is submitted.
eToro – Social trading without interest chargesAt 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. This means that there’ll never be rollover interest applied to your account. 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!
To open an eToro Islamic account, clients must first register for a live account and fund it with a minimum of $1,000 USD. 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. 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.
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.
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.
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.
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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