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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, but because they will not charge interest, some Islamic accounts will charge commission or offer wider spreads than a traditional Forex account.
To test these brokers, we opened a live trading account, and contacted customer service to evaluate the process of removing interest related adjustments. While Islamic Forex accounts ordinarily have the same trading terms as a regular Forex account, our test looked for limitations on trading opportunities, charging additional fees, as well as widened spreads to compensate for the missed revenue that would otherwise have been generated by collecting interest. Each of these brokers are FCA regulated. These are the best Islamic Forex accounts for 2022, according to our testing and our research.
Most brokers will have an Islamic account option for clients of the Muslim faith. While these account types are simply an adaptation of the live account, trading conditions at the broker and specific modifications to the Islamic account trading conditions can potentially influence trading costs. In comparing Islamic accounts, it is important to consider:
Regulation: Regulation is the security of funds for traders. Without regulation, the broker is free to make decisions about your trading funds.
Your broker should be governed by your local regulator or a combination of other well-respected international regulators like ASIC, the FCA and MAS, who have processes in place to protect your funds.
Free swap rates: Swap fees are charged every 24 hours a position is held open. For a trading account to be considered swap-free or Shari’ah-compliant, the broker must never charge a swap fee. Select brokers will restrict swap-free trading to a period of time – usually up to 14 days after the trade was opened – and would make the account swap-free for this period. As you compare Islamic accounts, always ask the broker if there is a time-limited swap-free period for trades.
Not offered on all account types: A majority of brokers offer various live accounts, but not all of these accounts can have the swap fees removed. Always ask your broker which of the live accounts have a swap-free option. The broker can also restrict leverage for Islamic accounts.
Minimum deposit: A live account will always have a minimum deposit requirement, but occasionally brokers will increase this minimum deposit for Islamic accounts. Always check the minimum deposit for this account type before signing up.
Instrument restrictions: Brokers often restrict the trading instruments an Islamic client can trade. At AvaTrade, Islamic accounts are subject to an increased spread on all Forex pairs, and Islamic accounts can not trade cryptocurrency. Tickmill charges an Islamic account fee on exotic FX pairs.
Additional Fees: Brokers occasionally make money from the swap, and to replace lost income, the broker may take steps to increase spreads or introduce additional commissions. Here are some examples of additional fees:
FP Markets charge an admin fee of 5 USD per lot on major currency pairs per night. However, fees are not charged for the first ten nights the position is open and will only be applicable from the eleventh night.
Admirals charge a flat commission after positions are held open for longer than three nights on Islamic accounts.
If a position at Axiory is open overnight, a commission is charged instead of a typical swap. The commissions and holding period are subject to change according to market conditions and when necessary.
Pepperstone – Best ECN Islamic Account
A well-regulated pure ECN broker, Pepperstone only offers swap-free accounts in countries with a large population of people of the Islamic faith. Like all Pepperstone accounts, the Islamic account features fast ECN market execution with deep liquidity and variable spreads. The Islamic account also offers decent trading conditions and a low minimum deposit of 200 AUD (or equivalent). Spreads average 1-1.2 pips on the EUR/USD and no commission is charged. Unfortunately, Pepperstone’s Razor Account, with spreads down to 0 pips and commission of 6 AUD per lot traded, is not available as an Islamic account.
Islamic accounts can be opened in AUD, EUR, GBP, and USD and all three major trading platforms are supported (MT4, MT5 and cTrader). While no swaps are charged on this account any position that is held for more than 10 days will be charged an admin fee of 50 USD per lot.
Accepts UK Clients. Average spread EUR/USD 0.69 pips with 0.0 USD commission round turn on the trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4, MT5 & cTrader platforms supported. Pepperstone is regulated by the FCA, ASIC, and the DFSA. 79.3% of traders lose money with this provider.
XM – Lowest Cost Islamic Account
XM is unusual in the Forex industry in that it does not apply any extra charges for Islamic accounts. Most other brokers apply a commission or widen the spread to cover the cost of the lost swap fees. XM does neither, meaning its Islamic account has exactly the same trading conditions as a normal trading account, minus the swap fee. In addition, opening an Islamic account with XM is relatively straightforward: First, a trader must open and validate a standard account and then file a request for an Islamic account with the XM back office. Approval usually takes a matter of minutes.
XM is one of the most regulated market makers in the Forex industry and stands out for leading trading conditions, account choice, execution speed and a wide range of CFD assets available on both the MT4 and MT5 platforms. With a minimum deposit of 50 USD, traders can open the XM Ultra Low Account, where spreads start at 0.6 pips with no commission charged.
Accepts UK Clients. Average spread EUR/USD 1.60 pips on trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4 & MT5 platforms supported. XM Group regulated by CySEC, ASIC, and the IFSC. 77.19% of traders lose money with this provider.
AvaTrade – Best Mobile Trading Experience
AvaTrade offers Islamic accounts on MT4, MT5, Webtrader and the excellent and newly designed AvaTradeGo mobile app. The AvaTradeGo app offers forex traders an intuitive and sophisticated trading experience, with spreads as low as 0.9 pips on the EUR/USD for Islamic accounts. AvaTradeGo features an advanced dashboard, with intuitive management tools, clear charts, zoom for details, and a Market Trends feature to monitor trading trends within the AvaTrade community. The AvaProtect tool is also available in the mobile app, allowing traders to purchase loss protection for a time.
Islamic accounts at AvaTrade do require a little more setup than with other brokers. First, a normal account must be opened and funded, once this step is complete an application for an Islamic account must be made and approved. Applications are usually processed within 1-2 business days. Islamic accounts at AvaTrade are not charged swap fees or a commission, as is common with other Islamic accounts, but instead, the spread will be marked up to cover overnight fees.
Accepts UK Clients. Average spread EUR/USD 0.90 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. 71% of traders lose money with this provider.
FxPro – Largest Account Variety
A respected FCA-regulated broker with no dealing desk intervention, FxPro offers excellent trade execution on a variety of platforms and account choices. Islamic swap-free options are available on the MT4, cTrader and FxPro Edge account types, which feature a minimum deposit of 100 USD and leverage of up to 30:1. Spreads are relatively wide on its MT4 and FxPro Edge account types, averaging at around 1.84 pips on the EUR/USD. Spreads tighten on the cTrader Account, down to 0.31 pips, in exchange for a commission of 4.5 USD per lot. Most trades are executed in under 14 milliseconds, with 80.48% of market orders executed at the requested price, and 9.6% at a better price, known as positive slippage.
In lieu of the interest charged on overnight positions, Islamic traders will be charged a commission of 7.50 USD per lot, but this only applies after the 8th night of trading. FxPro only offers Swap-free accounts for religious purposes as per the Shariah law. In order to open an account, traders will need to provide an official document such as a Birth or Marriage certificate or an official letter from the leader of their local Muslim community.
Accepts UK Clients. Average spread EUR/USD 1.40 pips on trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4, MT5, cTrader and FxPro proprietary trading platform supported. FxPro Group is regulated by FCA, CySEC, FSCA, and the SCB. 71.58% of traders lose money with this provider.
Axi – Best MT4 Islamic Swap-Free Account
Axi is a well-regulated ECN broker offering a trading account tailored to Islamic traders on the MT4 platform. Axi does not charge any extra fees on the Islamic account, which is unusual as most brokers apply a commission or widen the spreads to make up for the lost swap fees, making Axi a good choice for traders of the Islamic faith.
Packed full of advanced features, the MT4 platform offers excellent customisation and is enhanced by world-class trading tools, including the MT4 NexGen plugin. NexGen offers a sentiment indicator, a correlation trader, an intuitive window, and an automated trade journal. Axi also offers a range of tools, including AutoChartist, a powerful automated technical analysis tool, PsyQuation, an AI diagnostic tool that tracks your trading style, VPS hosting, and other trading algorithms to install on the platform.
Opening an Islamic Account is a simple process. Traders are required to open a Standard Account and request approval from Axi’s customer support, which usually takes a few minutes.
Accepts UK Clients. Average spread EUR/USD 1.20 pips on trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4 & MT5 platforms supported. Axi Group is regulated by the FCA, ASIC and the DFSA. 75.6% of traders lose money with this provider.
XTB – Best Proprietary Platform for Islamic Traders
Founded in 2002, XTB is a well-regulated market maker offering trading on its award-winning platform on two market execution account types: The Standard Account and the Islamic Account. Islamic Account-holders are charged both a spread mark-up and a commission per lot. Spreads start at 0.5 pips (EUR/USD) on the Standard Account, and 0.7 pips (EUR/USD) on the Islamic Account, which is still tighter than other market makers. Islamic account holders are also charged a commission of 10 USD/lot, while Standard Account-holders are charged a commission starting at 0.08% but only on stocks and ETFs.
XTB only offers trading on its award-winning trading platform, xStation 5. Intuitive, powerful, and fast, xStation 5 introduces sentiment data directly into the platform, so traders can view the percentage of clients who are long or short, and on which instruments. It also offers powerful charting tools, one-click trading, and real-time performance statistics. Mobile versions of the platform are available on both iOS and Android and seamlessly connect to the desktop versions of the app.
Accepts UK Clients. Average spread EUR/USD 1.40 pips on trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. xStation5 platform supported. XTB Group is regulated by CySEC, DFSA, FCA and the IFSC. 82% of traders lose money with this provider.
Tickmill – Lowest Commission ECN/STP Broker
Tickmill is an ECN/STP broker with three different account options that are all available as Islamic swap-free accounts. It has won numerous awards for its excellent trading conditions, including its low commissions. Spreads start at 1.6 pips (EUR/USD) on its commission-free Classic Account, which is wider than other similar brokers, but tighten to an average of 0.1 pips (EUR/USD) on its Pro Account in exchange for a low commission of 2 USD per side per lot traded. Conditions improve further on the VIP Account, with spreads down to 0 pips (EUR/USD), commissions of 1 USD per side per lot traded, but requires a minimum starting balance of 50,000 USD.
Swap-free trading accounts are only available to those clients who cannot use ‘swaps’ owing to religious beliefs. Accordingly, Tickmill requires adequate justification that the trader follows the Muslim faith. Islamic accounts have the same trading conditions as Tickmill’s regular trading account types, but it charges a handling fee of between 5 – 10 USD only on exotic currency pairs that are held for longer than three consecutive nights. All requests for Islamic account status are processed within one business day, and traders will receive a confirmation email once it is set up.
Accepts UK Clients. Average spread EUR/USD 0.00 pips with 4 USD commission round turn on the trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4 platform support. Tickmill is regulated by CySEC, FCA, FSCA, and the FSA-Seychelles. 73% of traders lose money with this provider.
IronFX – ECN Broker with Over 80 FX Pairs
A well-regulated global broker, IronFX offers trading on multiple assets, including metals, indices, commodities, futures, shares, and over 80 forex pairs. With a wide variety of account and execution choices, traders can choose the spread/commission combination that bests suits their strategy. Islamic swap-free accounts are available on all account options, and unlike most other brokers, no extra fees are charged. Opening an Islamic swap-free account is a simple process, and traders only need to produce a copy of a valid identification document proving that they are of the Muslim faith.
Trading conditions for Islamic account-holders are the same as for regular traders: Spreads start at 0 pips on the EUR/USD on the absolute zero accounts in exchange for a high commission of 18 USD per lot traded. Traders can also choose the Fixed Spread accounts, which offer spreads starting at 2.2 pips on the EUR/USD, which is relatively wide, but with no commissions. Leverage is up to 30:1, and trading is offered on IronFX’s large range of currency pairs.
Accepts UK Clients. Average spread EUR/USD 1.10 pips on trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. Only MT4 platform supported. IronFX is regulated by CySEC, FCA, ASIC, and the FSCA. 75.35% of traders lose money with this provider.
FXCM – Broadest Range of Trading Platforms
FXCM is an ASIC and FCA-regulated broker offering a wide range of trading platform choices for Islamic traders, including MT4, Ninja Trader, and Trading Station, its award-winning proprietary platform, on one live commission-free account. Interest-free accounts are offered as a courtesy to clients who, for religious reasons cannot pay or earn interest. Opening an Islamic Account is a simple process: Traders must first open a Standard Account and fill out a registration form to have it converted to an Islamic Account. Islamic account-holders are charged a spread mark-up of 0.4 pips on all currency pairs.
Trading Station is FXCM’s proprietary platform with powerful analytical tools for advanced charting and an intuitive interface for ease of use. Other features of Trading Station include micro-lot trading, custom indicators, strategy optimisation, and strategy backtesting. Ninja Trader is aimed at more experienced traders, and is popular among traders who want to engage in auto trading. FXCM also offers support for several specialty platforms that allow algorithmic trading.
Accepts UK Clients. Average spread EUR/USD 1.30 pips on trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4, Trade Station, & Ninja Trader platforms supported. FXCM is regulated by FCA, ASIC, CySEC, BMA, and the FSCA. 76.31% of traders lose money with this provider.
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.
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.
Accepts UK Clients. Average spread EUR/USD 0.69 pips with 0.0 USD commission round turn on the trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4, MT5 & cTrader platforms supported. Pepperstone is regulated by the FCA, ASIC, and the DFSA. 79.3% of traders lose money with this provider.