What is an Islamic Trading Account?
Also known as a "swap-free" account, Islamic accounts have some differences from regular trading accounts. Traditional Forex trading can pose problems for religious Muslims because it often involves some interest. Sharia Law forbids the accrual of interest on funds deposited in a trading account, so traders with Islamic Trading Accounts do not incur or receive rollover swap points on positions open for longer than 24 hours. They earn no interest in deposited funds.
Also, Islamic Forex Account trades must be made with no delay, so that currencies are transferred immediately from one account to another, with transaction costs paid simultaneously.
Who is for an Islamic trading account?
Regular forex trading accounts charge interest on specific trades, which can be a problem for some traders. Riba, or making money from money, is not permissible under Sharia Law. Furthermore, Gharar, or gambling, is also not permitted in Islam. Gharar can refer to the market's volatile conditions, making it challenging to be sure what is likely to happen and, therefore, be considered gambling.
What types of trades are forbidden in Islamic trading accounts?
These forex trends are generally not permitted with Islamic accounts:
- Riba: interest that is charged from the buyer under different conditions.
- Rahn (pledge): a signed commitment to pay back a loan within an agreed time, with the agent allowed to sell out the contract and recover the loan if the customer cannot reach the specific percentage of the margin.
- Loans: money given by an agent (bank) to the customer on some settled terms of interest.
- Short selling: borrowing and selling an asset the trader does not own for profit.
- Margin trading: borrowing money from a broker to purchase stock.
- Forwards sales: an agreement to buy or sell an asset at a future time on a price agreed today.
Are there any disadvantages to Islamic Accounts?
If you are opening an Islamic account to avoid interest, think again. Most brokers will ask you to provide evidence of your faith if you request a Sharia compliant account. The broker can close your account altogether if it has ground to believe that you are trying to abuse the system.
Interest-free does not necessarily mean that you will be at an advantage, as some brokers will try alternative sources of revenue if they cannot charge interest. That is why Islamic accounts can have marginally wider spreads than conventional trading accounts. Other brokers may require higher minimum deposits.
However, this isn't always the case. Some brokers offer Forex and commodity trading accounts in Islamic format to all clients of the Muslim faith. Besides, you can keep your open positions overnight for up to 2 days at no additional cost. Other brokers tend to apply a carry charge after seven days.
How can I open an Islamic account?
Opening an Islamic trading account is now easier than ever. With the Islamic banking sector growing by an average of 19.7% a year, more and more brokers offer Islamic forex account services. The accounts are designed in support of all the Islamic rulings on business and investments.
The following list shows the best Forex brokers with Islamic accounts. It would be best to tell your account manager that you want to open an Islamic trading account before placing your first trade.
The best Forex brokers with Islamic accounts in 2021
>>> LiteForex <<<
LiteForex Review on WiBestBroker.com Click Here.
Broker name: LiteForex
Operating since: 2005.
Offices in: Marshall Island
Regulated by: Marshall Island's Business Corporation Act
Website: www.liteforex.com
Trading platforms: MetaTrader 4, MetaTrader 5
Minimum deposit: $50
Depositing options: N/A
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>>> XTB <<<
XTB Review on WiBestBroker.com Click Here.
Broker name: N/A
Operating since: 2005.
Offices in: Belize
Regulated by: FCA
Website: www.xtb.com
Minimum deposit: N/A
Depositing options: N/A
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>>> IC Markets <<<
IC Markets Review on WiBestBroker.com Click Here.
Broker name: International Capital Markets Pty Ltd
Offices in: Australia
Operating since: 2007.
Regulated by: ASIC
Trading platforms: MetaTrader 4, Metatrader 5, cTrader, Web Trader
Website: www.icmarkets.com
Minimum deposit: N/A
Depositing options: Credit and debit cards, PayPal, Skrill, Bpay, Union Pay, Neteller, FasaPay, Broker to Broker, POLI, Thai Internet Banking, Rapidpay, Klarna, Bitcoin Wallet, UnionPay, Wire Transfer, and many more.
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>>> ROinvesting <<<
ROinvesting Review on WiBestBroker.com Click Here.
Broker name: ROinvesting
Operating since: 2017.
Offices in: Cyprus
Regulated by: CySEC
Website: www.roinvesting.com
Minimum deposit: 250$
Depositing options: Visa, Maestro, MasterCard, Skrill, Neteller, PayPal, SafeCharge, MIR Limited, Wirecard, Decta, etc.
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>>> ETFinance <<<
ETFinance Review on WiBestBroker.com Click Here.
Broker name: ETFinance
Operating since: 2019.
Offices in: Cyprus
Regulated by: CySEC
Website: www.etfinance.eu
Minimum deposit: $250
Depositing options: N/A
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>>> Fundiza <<<
Fundiza Review on WiBestBroker.com Click Here.
Broker name: Fundiza
Operating since: 2019.
Offices in: St. Vincent and Grenadines
Regulated by: N/A
Website: www.fundiza.com
Trading platforms: MetaTrader 5
Minimum deposit: $5,000
Depositing options: N/A
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>>> InvestiGram <<<
InvestiGram Review on WiBestBroker.com Click Here.
Broker name: InvestiGram
Operating since: 2019.
Offices in: St. Vincent & Grenadines
Regulated by: N/A
Website: N/A
Trading platforms: MetaTrader 5
Minimum deposit: $100
Depositing options: N/A
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>>> Kiexo <<<
Kiexo Review on WiBestBroker.com Click Here.
Broker name: Kiexo
Operating since: 2020.
Offices in: Saint Vincent
Regulated by: St. Vincent and the Grenadines
Website: www.kiexo.com
Trading platforms: MetaTrader 5
Minimum deposit: $100
Depositing options: N/A
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>>> Nixse <<<
Nixse Review on WiBestBroker.com Click Here.
Broker name: Nixse
Operating since: 2020.
Offices in: Saint Vincent and the Grenadines
Regulated by: N/A
Website: www.nixse.com
Trading platforms: MetaTrader 5
Minimum deposit: $250
Depositing options: N/A
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>>> T1Markets <<<
T1Markets Review on WiBestBroker.com Click Here.
Broker name: T1Markets
Operating since: 2020.
Offices in: Cyprus
Regulated by: CySec
Website: www.t1markets.com
Trading platforms: Meta Trader 4, WebTrader, MobileTrader
Minimum deposit: $250
Depositing options: N/A
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>>> Forex.com <<<
Forex.com Review on WiBestBroker.com Click Here.
Broker name: Forex.com
Operating since: N/A
Offices in: USA
Regulated by: N/A
Website: www.forex.com
Trading platforms: MetaTrader 4
Minimum deposit: 50
Depositing options: N/A
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>>> Uptos <<<
Uptos Review on WiBestBroker.com Click Here.
Broker name: Uptos
Operating since: N/A
Offices in: St. Vincent
Regulated by: N/A
Website: www.uptos.com
Trading platforms: MetaTrader 5
Minimum deposit: N/A
Depositing options: N/A
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>>> Vlom <<<
Vlom Review on WiBestBroker.com Click Here.
Broker name: Vlom
Operating since: N/A
Offices in: Saint Vincent and the Grenadines
Regulated by: N/A
Website: www.vlom.com
Trading platforms: MetaTrader 5
Minimum deposit: $150
Depositing options: N/A
