In the world of long-term forex trading, one of the issues that Muslim traders have to deal with is the interest that they could be charged or the profit that they could gain when they leave trades open overnight. This is prohibited in the Islam religion under the Sharia law. Thus, in order to allow Muslim traders to continue trading, the swap free account was created and swap free account brokers came into existence. Find out the best swap-free account brokers here.
In This Guide
FCA, ASIC, CIMA, SIBL
up to 50% bonus
ASIC, CBI, BVI, FSCA, IIROC, FFAJ, JFSA, ADGM FRSA
up to 40% bonus
VFSC, FSC, IBFC
$10 000 demo
Unlike regular brokers, swap free account brokers do not credit swaps. In other words, they do not charge interest or grant profit on long-term trade positions, thus allowing Muslims to trade without violating the Sharia law. Swap free accounts are also known as Islamic accounts.
Islamic or swap free accounts come in different types, depending on what is offered by the swap free account brokers. There are accounts that do not have any premiums, rollover and interest. There are others that may come with special fees for making certain trades. Also, in the opening of a swap free account, brokers might vary as well. Some allow any trader to open an account while others only give this option to verified Muslim traders.
There has been an increasing number of swap free account brokers in the last few years so it has become easier to find one that matches your trading style. According to our research, these are the top 5 that you should consider signing up with.
Based in Ireland, this broker is one of the most highly regulated swap free brokers today, with strict supervision from the Central Bank of Ireland, the FSC of the British Virgin Islands, ASIC, FSA, FSCA, FFAJ, and ADGM-FSRA. Opening an account with AvaTrade is completely hassle-free and they do not charge fees for fund transfers or for inactivity. They have 5 base currencies and 55 currency pairs to choose from.
For forex trading, AvaTrade offers the use of MetaTrader 4 and 5, as well as their own WebTrader, which is very easy to use and is available in more than 15 languages, including English and Arabic. Possibly the best area that AvaTrade really excels in is their research tools, which are user-friendly but quite powerful and include highly interactive charts.
HYCM stands out for their very competitive forex fees and superior educational content. They are regulated in several countries, including the UK, Cyprus, Dubai and the Cayman Islands. The process for opening an account with HYCM is fully digital and can be completed in just a few hours. They only require a minimum deposit of $100 so it is very easy for even a beginning trader to set up an account. There is also no fee for making withdrawals or deposits.
This broker does not have its own proprietary trading platform and instead uses the popular MetaTrader 4 and 5. Their MT4 offering is available in more than 40 different languages and includes many advanced features that are useful for seasoned traders.
Established and based in Melbourne, Australia, this broker is regulated by the top-tier authority Australian Securities and Investment Commission or ASIC. They have been around since 2006 and have since gained the reputation of being a really good broker for newcomers to the forex trading business.
Aside from offering swap free accounts, GO Markets also has a really good social trading platform, as well as an unlimited Demo account that you can use to get a feel of the platform and hone your trading skills. They offer competitive spreads and excellent market research tools with detailed analysis and precise data.
Dukascopy is based in Geneva, Switzerland and is regulated by the FINMA JFSA and DFSA. They are one of the most highly preferred swap free account brokers for forex trading because for one thing, they are a regulated Swiss bank. They also offer high leverage, advanced trading tools, fast trade execution and stellar customer support.
The one drawback would probably be the $1000 minimum deposit requirement, which might not make it very suitable for new traders. They offer very competitive spreads, and their fees are also minimal.
When it comes to swap free account brokers, OctaFX should definitely be in the list. This broker is regulated by FSA SVG and CySEC and is a very popular STP and ECN broker.
Their forte lies in the powerful trading platforms that give a high amount of versatility and control to the traders. They also have the OctaFX copy trading app for social trading. OctaFX allows hedging and scalping and they also offer negative balance protection.
Whether you are a Muslim trader who must abide by the Sharia law or a non-Muslim who simply wants to avoid suffering potential losses from long-term trade positions, swap accounts are certainly the ones to open. The list of swap free account brokers that we have recommended are currently among the best in the world today, as can be seen from the feedback of their many traders. Be sure to compare their individual features carefully so that you can make the best pick.
Here are some common questions and answers about swap free account brokers that can help you grasp the idea better and have a better understanding of this trading practice.
For positions that stay open for 10 days or less, no fees are charged at all. However, if your position exceeds this duration, most swap free account brokers might charge a fee.
Yes, an Islamic account or Muslim account is the same as a swap free account and it is called such as these accounts were originally made for Muslims who abide by the Sharia law.
This Muslim law states that in any business deal, the transfer of funds due to interest or profit on any financial services is not allowed. This includes forex trading.
Although swap accounts were originally meant only for Muslim traders, anyone can now open a swap free account, particularly those traders who engage in long-term strategies.