AuthorBy Chris CammackAuthor InformationUpdated: October 29, 2020

While there is no such thing as an Islamic Forex Broker, there are many brokers who offer Islamic Forex accounts. An Islamic Forex account is a halal Forex account which complies with the Shari’ah prohibition on Riba, or the accumulation of interest.

Islamic Forex accounts will not charge interest on open positions held overnight; this charge is also called the swap fee, so Islamic Forex accounts are sometimes called swap-free accounts. As they will not charge interest, some Islamic Forex accounts will charge commission or have wider spreads than a traditional Forex account.

Best Islamic Broker

English

Forex brokers with the best Islamic accounts

Last updated on 29 Oct 2020
Updated 29 Oct 2020
by Editorial Director Chris Cammackby Chris Cammack
Chris Cammack
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All Brokers Regulated
by Trusted Authoritiesby Trusted Authorities
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1
AvaTrade
Min. Deposit
GBP 100
4.184.18
Min. Spread
0.9 pips
Islamic Account
Yes
REGULATED BY
11110.54.18/ 5
AlertAccepts UK Clients. Average spread EUR/USD 0.9 pips on trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4 & MT5 platforms supported. AvaTrade Group regulated by ASIC, FSCA, B.V.I FSC & FSA. 79% of retail investor accounts lose money when trading CFDs with this provider of retail investor accounts lose money when trading CFDs with this provider.
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Good value, beginner-friendly and hugely respected all over the world, AvaTrade is one of the most reputable brokers in the industry. With support for the leading trading platforms and top-quality multilingual support, AvaTrade has built a brand on a solid reputation and continues to add to that reputation with the recent addition of AvaProtect – an automated loss-protection tool – to its product lineup.

AvaTrade offers trading in Forex, commodities, cryptocurrencies, exchange-traded funds, options, bonds, and equities and is a good choice for any type of forex trader ranging from beginners to scalpers and intraday traders to long-term traders.

Pros
  • Good for beginners
  • Well regulated
  • Low minimum deposit
Cons
  • Dealing desk
  • Limited education
Read More About AvaTrade
2
Pepperstone
Min. Deposit
GBP 200
4.514.51
Min. Spread
Variable pips
Islamic Account
Yes
REGULATED BY
11110.54.51/ 5
AlertMost retail CFD accounts lose money. Your capital is at risk.
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Founded in 2010, Pepperstone is an Australian ECN broker known for tight spreads, ultra-fast trade execution and broad platform support. Pepperstone’s award-winning, 24-hour support provides the foundation for its excellent customer service, where personalised assistance is available via several methods.

As our highest rated pure ECN broker, if you want to pay a small commission for tighter spreads, you won’t find a better broker than Pepperstone.

Pros
  • Well regulated
  • Tight spreads
  • Great platform choice
  • Wide range of assets
Cons
  • High minimum deposit
  • Limited market analysis
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3
IC Markets
Min. Deposit
GBP 200
4.264.26
Min. Spread
0.1 pips
Islamic Account
Yes
REGULATED BY
11110.54.26/ 5
AlertMost retail CFD accounts lose money. Your capital is at risk.
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IC Markets presents itself as the best and largest true ECN broker. It is ASIC and CySEC regulated and offers the MetaTrader4, MetaTrader5 and cTrader platforms. IC Markets is highly recommended to both new and experienced traders looking for faster execution and tighter spreads.

Beginner traders will find the IC Markets account structure welcoming and simple to understand. IC Markets understands customer retention involves a combination of tighter spreads, cutting edge technology, fast trade execution and top quality customer service.

Pros
  • Well regulated
  • Tight spreads
  • Wide range of assets
  • Great platform choice
Cons
  • High minimum deposit
  • Limited market analysis
Read More About IC Markets
4
FxPro
Min. Deposit
GBP 100
4.214.21
Min. Spread
0.6 pips
Islamic Account
Yes
REGULATED BY
11110.54.21/ 5
AlertMost retail CFD accounts lose money. Your capital is at risk.
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One of the most respected Forex brokers in the industry, well regulated by the FCA and CySEC, and with over 870,000 client accounts in 173 countries. FxPro is a powerhouse in the industry and very well respected among traditional brokers.

With MT4, MT5, cTrader and a browser-based platform, a reasonable 100 USD opening deposit and outstanding customer service, FxPro also offers competitive spreads – often as low as 0.6 pips – to match profitability with security.

Pros
  • Well regulated
  • Great platform choice
  • Tight spreads
Cons
  • Limited education
Read More About FxPro
5
MarketsX
Min. Deposit
GBP 250
4.394.39
Min. Spread
0.6 pips
Islamic Account
Yes
REGULATED BY
11110.54.39/ 5
AlertMost retail CFD accounts lose money. Your capital is at risk.
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Marketsx is a premium trading platform. It’s operated by Markets.com and offers traders fast, low-cost trading on over 2,200 financial instruments. Marketsx provides CFD trading on global stock, forex, commodity, indices, cryptocurrency, ETF and bond markets. Clients in the UK can also use spread bets on applicable instruments.

The proprietary Marketx trading platform is packed full of features and trading tools and is optimised for lightning execution. As well as in-depth charting and asset comparison tools, Marketsx also gives traders a wealth of decision-supporting data with sentiment tools, tutorials, and regular live-streamed, expert analysis.

Pros
  • Well regulated
  • Tight spreads
  • Wide range of assets
  • Fast and free withdrawals
Cons
  • High minimum deposit
Read More About MarketsX
6
XM
Min. Deposit
GBP 5
4.384.38
Min. Spread
0.6 pips
Islamic Account
Yes
REGULATED BY
11110.54.38/ 5
AlertMost retail CFD accounts lose money. Your capital is at risk.
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XM Group has achieved substantial growth since opening in 2009, earning 1.5 million clients in 196 countries. XM’s operational philosophy is aimed at client satisfaction and low client turnover; they earn client loyalty through award-winning 24/5 personal customer service, varied account types and competitive trading conditions.

Regulated the FCA, CySEC and ASIC and the recipient of many industry awards, XM Group stands out from a crowded field of market maker brokers for their customer service and educational support.

Pros
  • Well regulated
  • Excellent education
  • Wide range of assets
  • Fast and free withdrawals
Cons
  • Dealing desk
Read More About XM
7
Axitrader
Min. Deposit
GBP 5
4.434.43
Min. Spread
0.1 pips
Islamic Account
Yes
REGULATED BY
11110.54.43/ 5
AlertMost retail CFD accounts lose money. Your capital is at risk.
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AxiTrader is an ASIC and FCA regulated ECN broker for serious traders. While the trading platform choice is limited to MT4, Axitrader has received industry recognition for their setup including Best MT4 Broker 2018 (Compare Forex Brokers Australia) and Best MT4 Provider 2018 (UK Forex Awards).

Both accounts at AxiTrader require no minimum deposit, though a minimum of 200 USD is recommended. Spreads are tight, commission on the Pro Account is competitive, and educational and analytical support is good for beginners.

Pros
  • Low minimum deposit
  • Wide range of assets
  • Well regulated
  • Tight spreads
Cons
  • Poor customer service
  • Limited demo account
Read More About Axitrader
8
IG Markets
Min. Deposit
GBP 250
4.534.53
Min. Spread
0.6 pips
Islamic Account
Yes
REGULATED BY
11110.54.53/ 5
AlertMost retail CFD accounts lose money. Your capital is at risk.
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One of our highest rated brokers, IG Markets is a market-maker with only the single account for Forex trading, but spreads are tight and educational and analytical materials are excellent. A wide choice of platform (including MT4) is also available and customer service is world-class.

With regulation from the FCA and ASIC, and winner of the Broker of the Year 2018 (UK Forex Awards) and Best CFD Provider 2017 (Investment and Wealth Management Awards), IG Markets is an attractive choice for both beginner and experienced traders.

Pros
  • Well regulated
  • Tight spreads
  • Great platform choice
  • Excellent education
  • Excellent market analysis
Cons
  • High minimum deposit
Read More About IG Markets
9
Admiral Markets
Min. Deposit
GBP 100
4.184.18
Min. Spread
0.1 pips
Islamic Account
Yes
REGULATED BY
11110.54.18/ 5
AlertMost retail CFD accounts lose money. Your capital is at risk.
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Founded in 2001, Admiral Markets is home to the MetaTrader Supreme Edition and offers reliability, market leadership and modern trading. A global presence, peerless trading education, varied account types and competitive trading conditions have attracted both beginner and experienced traders to the brand.

Additionally, most Admiral Markets customers have free access to Trading Central – providing independent market insight and technical analysis – and the company has one of the best cryptocurrency offerings on the market.

Pros
  • Well regulated
  • Excellent education
  • Wide range of assets
Cons
  • Expensive withdrawals
Read More About Admiral Markets
10
XTB
Min. Deposit
GBP 5
4.384.38
Min. Spread
0.1 pips
Islamic Account
Yes
REGULATED BY
11110.54.38/ 5
AlertMost retail CFD accounts lose money. Your capital is at risk.
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Well-regulated, safe and award-winning, XTB is a true leader in the Forex trading industry.

Joining other leading ECN/STP brokers with unbeatable trading conditions, excellent trader education and rock-solid analysis, XTB has also developed an award-winning proprietary trading platform that goes beyond MT4 to offer clients easy-to-use functionality with fast execution speeds.

Pros
  • Well regulated
  • Tight spreads
  • Low minimum deposit
  • Good for beginners
Cons
  • Limited platform choice
Read More About XTB
11
eToro
Min. Deposit
GBP 200
3.333.33
Min. Spread
1.0 pips
Islamic Account
Yes
REGULATED BY
1110.503.33/ 5
AlertMost retail CFD accounts lose money. Your capital is at risk.
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eToro pioneered social trading in 2012 and has been widely recognised for making the social trading experience as smooth and engaging as possible. It has since grown to become one of the largest Forex brokers in the world, and its success has made it clear that many traders view an active and helpful community as an essential part of their trading strategy.

eToro has won multiple awards for innovation, and as cryptocurrencies have become more popular, has introduced a wide variety of cryptocurrency CFDs to traders.

eToro’s trading model is quite different from most other brokers and may take some time to get accustomed to, but if you are looking for a fun and simple social trading experience, then eToro is the broker for you.

Pros
  • Well regulated
  • Good for beginners
  • Innovative trading tools
Cons
  • Limited education
  • Wide spreads
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12
BDSwiss
Min. Deposit
GBP 100
4.224.22
Min. Spread
1.0 pips
Islamic Account
Yes
REGULATED BY
11110.54.22/ 5
AlertMost retail CFD accounts lose money. Your capital is at risk.
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BDSwiss is a popular and well-regulated broker, based in Cyprus and founded in 2012. It offers a wide range of account types, including a new subscription-based Raw Spread Account, which features very tight spreads and no commission in return for a monthly payment.

MT4 and MT5 are both supported and educational and analytical material are both excellent. More experienced traders will also find a lot to like with the Black Account, including free AutoChartist and one-on-one support.

Overall, BDSwiss is a good choice for all traders and we are curious to see if the low-spread subscription model catches on.

Pros
  • Tight spreads
  • Good for beginners
  • Wide range of assets
Cons
  • Expensive withdrawals
  • Limited market analysis
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13
Tickmill
Min. Deposit
GBP 100
4.344.34
Min. Spread
0.0 pips
Islamic Account
Yes
REGULATED BY
11110.54.34/ 5
AlertMost retail CFD accounts lose money. Your capital is at risk.
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Tickmill offers low spreads and commission, fast STP execution on the MT4 platform and has an excellent reputation in the CFD trading industry.

Regulated by the FCA in the UK, CySEC in Europe, and the Seychelles FSA internationally – and a regular winner of trade execution and trading conditions awards – Tickmill has the reputation, and the performance, traders should look for in a broker.

Pros
  • Tight spreads
  • Well regulated
  • Fast and free withdrawals
  • Wide range of assets
Cons
  • MT4 only
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14
Amana Capital
Min. Deposit
GBP 200
4.054.05
Min. Spread
0.1 pips
Islamic Account
Yes
REGULATED BY
11110.54.05/ 5
AlertMost retail CFD accounts lose money. Your capital is at risk.
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Amana Capital is a very well-regulated broker with a strong focus on new traders; beginners will find a helpful and well-structured education section and relatively tight spreads on its cheapest account – though trading conditions do improve substantially on the more expensive accounts.

We also like that both MT4 and MT5 are supported and that traders have free access to both AutoChartist and Trade Captain – two excellent third-party analysis applications. 

Pros
  • Well regulated
  • Tight spreads
  • Great customer support
Cons
  • High minimum deposit
  • Limited education
Read More About Amana Capital
15
FP Markets
Min. Deposit
GBP 100
4.074.07
Min. Spread
0.0 pips
Islamic Account
Yes
REGULATED BY
11110.54.07/ 5
AlertMost retail CFD accounts lose money. Your capital is at risk.
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FP Markets is an ASIC-regulated, STP broker with simple account options and an exciting set of tools for traders with higher minimum deposits. Spreads are tight, even on the Standard Account, and the lack of dealing desk intervention for all accounts removes any concern over conflict of interest.

Both the MT4 and MT5 platforms are supported and trader education and market analysis are well-presented, structured and useful. Overall, FP Markets is an excellent choice for beginner and more experienced traders alike.

Pros
  • Well regulated
  • Tight spreads
  • Good range of accounts
  • Great customer support
Cons
  • Expensive withdrawals
Read More About FP Markets
16
CityIndex
Min. Deposit
GBP 50
4.184.18
Min. Spread
0.7 pips
Islamic Account
Yes
REGULATED BY
11110.54.18/ 5
AlertMost retail CFD accounts lose money. Your capital is at risk.
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Founded in 1983, City Index is a traditional market maker now owned by the NYSE listed financial group, GAIN Capital. It has tight spreads and a varied platform choice, including MT4 and AT Pro; an advanced automated trading platform allowing for full customisation with powerful back-testing.

City Index’ education section is perfect at beginners who want to get up to speed quickly and customer service is open 24/5. Overall, a good market maker and competitive with traditional brokers of its size and type.

Pros
  • Well regulated
  • Wide range of assets
  • Excellent market analysis
Cons
  • Slow withdrawals
  • Limited demo account
  • Limited education
Read More About CityIndex
17
easyMarkets
Min. Deposit
GBP 100
4.244.24
Min. Spread
0.9 pips
Islamic Account
Yes
REGULATED BY
11110.54.24/ 5
AlertMost retail CFD accounts lose money. Your capital is at risk.
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Founded in 2001, easyMarkets has always innovated, introducing tools like negative balance protection and guaranteed stop-loss before anyone else. This innovation has continued with its unique easyTrade, Freeze Rate and dealCancellation tools, all intended to assist new traders and keep trading transparent and simple.

easyMarkets still provides the strong basic services expected from a broker while constantly innovating to meet the greater expectations of the client base.  With simple account types, a strong variety of platforms to support traders, and a 50% deposit bonus for new traders, easyMarkets is easy to recommend.

Pros
  • Well regulated
  • Wide range of assets
  • Innovative trading tools
Cons
  • Limited platform choice
  • Limited account options
Read More About easyMarkets
18
Exness
Min. Deposit
GBP 1
4.124.12
Min. Spread
0.1 pips
Islamic Account
Yes
REGULATED BY
11110.54.12/ 5
AlertMost retail CFD accounts lose money. Your capital is at risk.
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Founded in 2008, Exness is a well-regulated broker with tight spreads and unlimited leverage on a specialist zero account.  With both market and instant execution methods and full support for both MT4 and MT5, there is little to find fault with here – including its well-publicised sponsorship of Real Madrid.

Exceptionally, customer service is available 24/7 and most traders will find something to like from the wide range of account types.

Pros
  • Well regulated
  • Tight spreads
  • Wide range of assets
  • 24/7 customer service
Cons
  • Limited education
  • Limited market analysis
  • Unavailable in Europe
Read More About Exness
19
FBS
Min. Deposit
GBP 1
3.773.77
Min. Spread
0.0 pips
Islamic Account
Yes
REGULATED BY
1110.503.77/ 5
AlertMost retail CFD accounts lose money. Your capital is at risk.
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FBS offers tight spreads, a simple account structure and support for both iterations of MetaTrader; education and market analysis are both excellent and 24/7 customer service is always welcome for beginner traders.

The trading conditions on the Cent Account are exceptional for such a low minimum deposit and should ensure a steady influx of new traders, other accounts are equally impressive – with negative spreads on the ECN account for instance.

Pros
  • Tight spreads
  • Low minimum deposit
  • Excellent education
  • Excellent market analysis
Cons
  • Limited range of assets
  • Extreme leverage
Read More About FBS
20
IronFX
Min. Deposit
GBP 100
4.194.19
Min. Spread
0.0 pips
Islamic Account
Yes
REGULATED BY
11110.54.19/ 5
AlertMost retail CFD accounts lose money. Your capital is at risk.
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With a huge range of account types, a good micro account and over 80 tradeable currency pairs, IronFX has something for everyone. A globally recognised Forex broker with award-winning education and market analysis, IronFX has also recently introduced market execution accounts with ultra-low spreads.

For beginners who want to learn to trade on the MT4 platform, and experienced traders looking for strong international regulation, IronFX is an excellent choice in a broker.

Pros
  • Well regulated
  • Tight spreads
  • Wide range of assets
Cons
  • Expensive withdrawals
Read More About IronFX
21
FXCM
Min. Deposit
GBP 50
4.134.13
Min. Spread
Variable pips
Islamic Account
Yes
REGULATED BY
11110.54.13/ 5
AlertMost retail CFD accounts lose money. Your capital is at risk.
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Founded in 1999, FXCM is an FCA-regulated market marker with tight spreads and support for the MT4 platform.

Though it has a strong focus on educating new traders, FXCM also offers innovative trading tools and a wide range of specialty platforms for experienced traders. Customer support is excellent and FXCM’s flagship platform, Trading Station, has won multiple awards for its intuitive layout and customisability. Traders will also benefit from FXCM’s enhanced execution model across all popular currency pairs and CFDs.

Pros
  • Well regulated
  • Great platform choice
  • Excellent education
  • Innovative trading tools
Cons
  • Limited demo account
Read More About FXCM
22
GKFX Prime
Min. Deposit
GBP 5
3.533.53
Min. Spread
0.0 pips
Islamic Account
Yes
REGULATED BY
1110.503.53/ 5
AlertMost retail CFD accounts lose money. Your capital is at risk.
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GKFX Prime was founded by GKG, a Malta-based Fintech company, in 2012 and is regulated by the BVI’s Financial Services Committee. With, no required minimum deposit, a good range of account types – including fixed spread, variable spread and commission-based ECN – and a decent education section, GXFX Prime are a good choice for new traders.

A number of useful tools are also available, including AutoChartist and Trading Central – alongside ZuluTrade and Autotrade for those who prefer social trading – though support is only offered for MT4.

Pros
  • Innovative trading tools
  • Wide range of assets
  • Low minimum deposit
Cons
  • Expensive withdrawals
  • Limited education
Read More About GKFX Prime
23
HF Markets
Min. Deposit
GBP 100
4.034.03
Min. Spread
0.0 pips
Islamic Account
Yes
REGULATED BY
11110.54.03/ 5
AlertMost retail CFD accounts lose money. Your capital is at risk.
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An ECN/STP broker regulated by multiple major authorities including the FCA and CySEC, HF Markets has built a reputation among traders for its stable, fair, secure and transparent trading environment. Excellent educational and analytical material is available for both visitors and clients, and customer service is world-class.

Listed as one the Top 100 Companies by World Finance Magazine and with an award for Business Excellence 2015 (World Confederation of Businesses), HF Markets is not just celebrated by their industry peers, but also by the financial industry as a whole.

Pros
  • Well regulated
  • Excellent market analysis
  • Copy trading accounts
Cons
  • Limited base currencies
Read More About HF Markets
24
HYCM
Min. Deposit
GBP 100
3.893.89
Min. Spread
0.2 pips
Islamic Account
Yes
REGULATED BY
1110.503.89/ 5
AlertMost retail CFD accounts lose money. Your capital is at risk.
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HYCM’s parent company has been involved in asset trading for over 40 years and its various subsidiaries are regulated by the FCA, CySEC and the DFIC. Primarily a market-maker broker, HYCM still offers attractive trading conditions, and has a market-execution account for those who prefer commission over wider spreads.  Support for both MT4 and MT5 is offered alongside a comprehensive market education suite that will be beneficial for all traders.

HYCM offers its clients an opportunity to trade on more than 300 financial instruments including a number of currency pairs, commodities, stocks and cryptocurrencies.

Pros
  • Well regulated
  • Wide range of assets
  • Good range of accounts
  • Fast and free withdrawals
Cons
  • Limited currency pairs
Read More About HYCM
25
OctaFX
Min. Deposit
GBP 50
4.104.10
Min. Spread
0.0 pips
Islamic Account
Yes
REGULATED BY
11110.54.10/ 5
AlertMost retail CFD accounts lose money. Your capital is at risk.
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Please note that OctaFX offers a restricted service to residents of the EU or the United Kingdom

OctaFX is an STP broker founded in 2011 that will appeal to all Forex traders, both beginners and professionals.  They have an excellent analytical section and offer a range of useful trading tools such as AutoChartist, copy trading, and an account monitoring service so you can learn anonymously from other successful traders.

Trader education for beginners is well-presented and platform support is almost unbeatable, with MT4, MT5 and cTrader all offered – but platforms are linked to account type and trading conditions.

Pros
  • Great platform choice
  • Fast and free withdrawals
  • Copy trading accounts
Cons
  • Limited education
  • Restrictive account types
Read More About OctaFX
26
FXTM
Min. Deposit
GBP 10
4.234.23
Min. Spread
0.1 pips
Islamic Account
Yes
REGULATED BY
11110.54.23/ 5
AlertAccepts UK Clients. Average spread EUR/USD 0.1 pips on trading account with lowest minimum deposit. Max leverage Flexible. Islamic account available. MT4 & MT5 platforms supported. FXTM Group regulated by CySEC, FCA, FSCA and FSC. 83% of retail investor accounts lose money when trading CFDs with this provider of retail investor accounts lose money when trading CFDs with this provider.
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By keeping the focus on beginners looking for reasonable trading conditions, the FXTM team of educators and analysts have succeeded in creating a welcoming environment for new traders. Additionally, FXTM is one of the few brokers with 24/7 support, allowing new traders to get set up on weekends or holidays. 

All five FXTM accounts are available as demo accounts and, for the absolute beginner, FXTM has a great deal of training material to help new traders get started. Once you are ready to trade, the Standard Account has a minimum deposit of 100 USD and spreads start at 1.3 pips. FXTM also offers a Cent Account where the minimum deposit if only 10 USD but the spreads will be wider. 

Pros
  • Good for beginners
  • Excellent education
  • Well regulated
  • Low minimum deposit
Cons
  • Expensive withdrawals
Read More About FXTM
27
Trade360
Min. Deposit
GBP 500
3.243.24
Min. Spread
1.8 pips
Islamic Account
Yes
REGULATED BY
1110.503.24/ 5
AlertMost retail CFD accounts lose money. Your capital is at risk.
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For a minimum deposit of 500 USD, you can try the innovative CrowdTrading trading platform built by Trade360. The CrowdTrading algorithm constantly examines Trade360 client activity, spots changes in price action and highlights these changes to help traders make better decisions.

A market-maker broker regulated by CySEC in Europe, Trade360 also lets clients try out this inventive new way to trade on a broad range of asset choices, not just Forex.

Pros
  • Good range of accounts
  • Wide range of assets
Cons
  • Wide spreads
  • Limited education
  • Limited market analysis
  • High minimum deposit
Read More About Trade360
28
InstaForex
Min. Deposit
GBP 150
3.323.32
Min. Spread
0.0 pips
Islamic Account
Yes
REGULATED BY
1110.503.32/ 5
AlertMost retail CFD accounts lose money. Your capital is at risk.
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InstaForex is an award-winning and well-regulated broker offering a wide variety of account types with good trading conditions and a copy-trading service. With three market execution accounts, one of which is specifically built for scalping, and two instant execution accounts with no minimum deposit, InstaForex will appeal to a wide range of traders.

The market analysis and education sections feature regularly updated content for traders of all experience levels and MT4 is fully supported via download and webtrader.

Pros
  • Wide range of assets
  • Copy trading accounts
Cons
  • Limited market analysis
  • Limited education
  • Wide spreads
Read More About InstaForex

Islamic Forex Trading

There are three articles of the Islamic Mua’malat that are relevant to Forex trading:

  • Riba: Prohibition of payment and receipt of interest
  • Gharar: Prohibition on gambling
  • Shared Risk: Both profit and losses

The key element here is the elimination of Riba – or interest on loans or assets.

Riba is central to conventional Forex trading, but according to Islamic law, or Shari’ah law, Muslims are banned from earning interest on loans. Some scholars believe that the practice of removing Riba, as brokers do on their Islamic Forex accounts, legitimises Forex trading under Shariʻah.

Islam also emphasises that when conducting business transactions, elements of uncertainty, excessive speculation and gambling should also be avoided, so it could be argued that hedging trades with Forex is also legitimate under Shari’ah. It is also widely agreed that conventional Forex transactions – if used carefully – are a very effective means of protecting banks from exposure to international risk.

Shared Risk

Another concern about the Islamic nature of Forex trading is the element of shared risk. Luckily, with Forex trading, when you trade, you are investing in an asset – the currency purchased. If this asset increases in value, you will make a profit and if the asset loses value, you will make a loss. The result is a sharing of the benefits and losses of the currency exchange with your counterparty. From this point of view, Forex trading and Islam are compatible in terms of shared risk.

What is an Islamic Forex Account?

Across the Islamic world, many brokers offer Shari’ah compliant accounts to make sure that your trading is not haram – though this does mean that there are a few differences when compared to traditional Forex accounts.

Islamic Forex accounts have two underlying attributes:

Other than the above, Islamic Forex accounts usually have the same trading terms and conditions as a regular Forex account. However, some most Forex brokers change the commercial terms of trading with them and might limit the trader from trading cryptocurrencies. 

Some Forex brokers will widen their spreads on Islamic accounts to compensate for the missed revenue that would otherwise have been generated by collecting interest. Another practice, but is far rarer, is that some Forex brokers charge an up-front commission on trades instead of widening the spreads.

Forex Brokers with Islamic Swap-free Accounts

There are a variety of brokers that offer Islamic accounts tailored for Muslim traders. There are usually no limitations on this account type – this means you can trade Forex, commodities, CFDs contracts and every financial instrument that complies with the Islamic financial regulations.

An important note:  With most Forex brokers, you will need to open a real trading account which can then be converted into an Islamic account. Few brokers have a registration page specifically for Islamic accounts, and even fewer have Islamic demo accounts, but some brokers with clients from predominantly Muslim countries automatically create accounts as Islamic accounts.

If you are in doubt, make sure you discuss your concerns with your account manager or broker representative before you make a deposit.

Forex Rollovers and Swap Rates Explained

In the Forex market, any position held overnight generates a rollover which will be earned or paid out depending on the currency you are trading and the direction of the market. Rollover interest is a form of interest that can be credited or debited from your Forex trading account, and thus it is prohibited by Islamic financial regulations.  In the financial world, this rollover is also known as the swap rate.  So, Islamic Forex accounts are swap-free accounts where no overnight interest is credited or debited.

Islamic Financial Regulatory Bodies

The central financial regulatory bodies in the Islamic world are the following:

Forex brokers that are registered in Muslim majority countries often have to comply with many local regulations and are required to follow Shari’ah law, whereas Western Forex brokers have much more flexibility when it comes to the interest charged to their clients.  This is why only some of the brokers offer this account type.

Summary

An Islamic Forex account, or swap-free account, is an optional account type that is often selected after signing up with a broker.  They are intended for use by traders of the Islamic faith, which prohibits generating income from interest payments.  Most Forex brokers can accommodate followers of the Islamic faith by offering swap-free trading accounts that are compliant with Shari’ah law.

Forex Risk Disclaimer

Trading Forex and CFDs is not suitable for all investors as it carries a high degree of risk to your capital: 75-90% of retail investors lose money trading these products. 

Forex and CFD transactions involve high risk due to the following factors: Over-leveraging, unpredictable market volatility, slippage arising from a lack of liquidity, inadequate trading knowledge or experience, and a lack of regulatory protection for clients.

Traders should not deposit any money that is not disposable. Regardless of how much research you have done, or how confident you are in your trade, there is always a substantial risk of loss. (Learn more from the FCA or from ASIC)

Our Methodology

Our State of the Market Report and Broker Directory are the result of extensive research on over 100 Forex brokers. The explicit goal of these resources is to help traders find the best Forex brokers – and steer them away from the worst ones – with the benefit of accurate and up-to-date information.

With over 150 data points on each broker and over 3000 hours of research and review writing, we believe we have succeeded in our goal. 

In a world where trading conditions and customer support can vary based on where you live, our broker reviews focus on the local trader and give you information about these brokers from your perspective.

All research has been conducted by our in-house team of researchers and writers, gathering information from various company representatives, websites and by sifting through the fine print. Learn more about how we rank brokers.

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Trading Forex and CFDs is not suitable for all investors and comes with a high risk of losing money rapidly due to leverage. 75-90% of retail investors lose money trading these products. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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