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75-90% of retail traders lose money trading Forex and CFDs. You should consider whether you understand how CFDs and leveraged trading work and if you can afford the high risk of losing your money. We may receive compensation when you click on links to products we review. Please read our advertising disclosure. By using this website, you agree to our Terms of Service.

AuthorAuthor: Alison HeyerdahlPublished: September 4, 2019
EditorEditor: Ida HermansenUpdated: February 28, 2024

Last Updated On February 28, 2024

Alison Heyerdahl

Most traders want an Islamic Forex account because they comply with the Shari’ah prohibition on Riba or the accumulation of interest. Some brokers try to compensate for the missed revenue that would otherwise have been generated by collecting interest, so we always look for limitations on trading opportunities, additional fees, and widened spreads. Otherwise, we focused on finding the best Islamic accounts for all types of traders, including a range of platforms, excellent trading tools, and good education for beginners.

These are the best Islamic Forex accounts for 2024, according to our testing and our research.

1

IC Markets

Best Raw Spread Islamic Account

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2

Octa

Islamic Accounts with No Additional Fees

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3

Tickmill

Best Islamic Account for Trading Majors

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4

AvaTrade

Best Mobile Trading Experience

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5

Pepperstone

Best ECN Islamic Account

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6

XM

Lowest Cost Islamic Account

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7

Admirals

Most Transparent Islamic Account

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8

XTB

Best Proprietary Platform for Islamic Traders

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9

HFM

Best Micro Account

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10

markets.com

900+ CFD:s, no commissions

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These are brokers with the best Islamic accounts

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Broker
Broker Score
Official Site
Islamic Account
Min. Deposit
Max. Leverage (Forex)
Currency Pairs
MetaTrader 4 (MT4)
MetaTrader 5 (MT5)
cTrader
Proprietary Platform
Regulators
Compare
IC Markets
4.56 /5
Read Review
Visit Site >
70.81% of retail CFD accounts lose money
USD 200500:164 CySEC Regulated BrokersASIC BrokersThe Seychelles Financial Services AuthoritySecurities Commission of the Bahamas
Octa
4.37 /5
Read Review
Visit Site >
67.65% of retail CFD accounts lose money
USD 25500:152 CySEC Regulated BrokersFinancial Services Conduct AuthorityMwali International Services Authority
Tickmill
4.58 /5
Read Review
Visit Site >
71% of retail CFD accounts lose money
USD 100500:162 CySEC Regulated BrokersFCA Regulated Forex BrokersLabuan Financial Services AuthorityFinancial Services Conduct AuthorityThe Seychelles Financial Services AuthorityDFSA Regulated Forex Brokers
AvaTrade
4.59 /5
Read Review
Visit Site >
76% of retail CFD accounts lose money
USD 100400:155 ASIC BrokersFinancial Services Conduct AuthorityCySEC Regulated BrokersFinancial Services AgencyCentral Bank of IrelandFinancial Regulatory Services Authority
Pepperstone
4.61 /5
Read Review
Visit Site >
89%74- of retail CFD accounts lose money
USD 0200:1100 FCA Regulated Forex BrokersASIC BrokersCySEC Regulated BrokersDFSA Regulated Forex BrokersBundesanstalt für FinanzdienstleistungsaufsichtSecurities Commission of the BahamasCapital Markets Authority
XM
4.45 /5
Read Review
Visit Site >
75.33% of retail CFD accounts lose money
USD 51000:157 CySEC Regulated BrokersASIC BrokersDFSA Regulated Forex BrokersInternational Financial Services CommissionFinancial Services Conduct Authority
Admiral Markets
4.28 /5
Read Review
Visit Site >
76% of retail CFD accounts lose money
USD 251000:182 ASIC BrokersCySEC Regulated BrokersFCA Regulated Forex BrokersFinancial Services Conduct AuthorityJordan Securities Commission
XTB
4.39 /5
Read Review
Visit Site >
78% of retail CFD accounts lose money
USD 0500:157 CySEC Regulated BrokersFCA Regulated Forex BrokersDFSA Regulated Forex BrokersInternational Financial Services CommissionKomisja Nadzoru Finansowego
HFM
4.53 /5
Read Review
Visit Site >
72.90% of retail CFD accounts lose money
USD 01000:153 CySEC Regulated BrokersFCA Regulated Forex BrokersFinancial Services Conduct AuthorityDFSA Regulated Forex BrokersFinancial Services CommissionThe Seychelles Financial Services Authority
Markets.com
4.68 /5
Read Review
Visit Site >
70.3% of retail CFD accounts lose money
USD 100300:156 FCA Regulated Forex BrokersCySEC Regulated BrokersASIC BrokersFinancial Services Conduct AuthorityBritish Virgin Islands Financial Services Commission

How to compare Islamic accounts

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.


IC Markets – Best Raw Spread Islamic Account

Broker Score
4.564.56 / 5
🏦  Min. DepositUSD 200
🛡️  Regulated By
💵  Trading Cost 
USD 8
⚖️  Max. Leverage500:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

Unlike many other brokers, IC Markets does not charge any extra fees or commission for an Islamic account. In addition, IC Markets is one of the very few brokers that offers Islamic accounts on both the Raw Spread and commission-free account types on the MT4, MT5 and cTrader platforms.

Islamic account holders will have access to leverage of 1:500, 90 tradeable instruments and spreads as low as 0 pips on the EUR/USD. Commissions start at 5 USD per lot traded on the Raw Spread account. Opening an Islamic account is a simple process and can be done directly from IC Market’s website, though customer service may ask for proof of Islamic faith before registering the trading account.

Pros
  • Well regulated
  • Tight spreads
  • Wide range of assets
  • Great platform choice
Cons
  • High minimum deposit
  • Limited market analysis
AlertAccepts Malaysian Clients. Average spread EUR/USD 0.10 pips on trading account with lowest minimum deposit. Max leverage 500:1. Islamic account available. MT4, MT5 & cTrader platforms supported. IC Markets is regulated by CySEC and ASIC.

Octa – Islamic Accounts with No Additional Fees

Broker Score
4.374.37 / 5
🏦  Min. DepositUSD 25
🛡️  Regulated By
💵  Trading Cost 
USD 6
⚖️  Max. Leverage500:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

Most brokers will charge an additional commission or spread markup for Islamic trading accounts; this is to make up for the lack of the overnight swap fee. Octa is one of the very few brokers to charge no extra commission at all. In addition, Islamic accounts are available on all three of Octa’s trading platforms: MT4, MT5 and OctaTrader. Opening an Islamic account is a simple affair at Octa, requiring a single click, with no additional forms or proof of religious status necessary.

All Islamic accounts are market execution and offer commission-free trading with spreads as low as 0.6 pips. Leverage is 500:1 for Forex pairs on all three accounts and the minimum deposit is 100 USD. All Octa clients are afforded negative balance protection and customer support is available 24/7 in English and Bahasa Melayu.

Pros
  • Fast and free withdrawals
  • Low minimum deposit
  • Tight spreads
Cons
  • Limited range of assets
  • Poorly regulated
AlertAccepts Malaysian Clients. Average spread EUR/USD 0.60 pips on trading account with lowest minimum deposit. Max leverage 500:1. Islamic account available. MT4, MT5 and Octatrader platforms supported. Octa is regulated by CySEC, FSCA, MISA, and is registered in St Lucia.

Tickmill – Best Islamic Account for Trading Majors

Broker Score
4.584.58 / 5
🏦  Min. DepositUSD 100
🛡️  Regulated By
💵  Trading Cost 
USD 6
⚖️  Max. Leverage500:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

Tickmill’s Islamic account is especially attractive because no additional charges are made for trades on most of the major currency pairs (such as EUR/USD or USD/JPY). Be aware that trading on most minor and exotic pairs will be charged a minimum of 5 USD after a trade has been held open for three days.

Minimum deposits are also the same as traditional trading accounts (100 USD) and opening an Islamic account is a simple affair: After opening a traditional account (either Classic, Pro or VIP) a request to client support will ensure that your account is converted to an Islamic account in 1 business day.

The Tickmill Islamic account is available on MT4 and MT5 and all three of Tickmill’s account types, so Islamic traders can take advantage of the tight spreads and low commissions on the Pro and VIP Accounts.

Pros
  • Tight spreads
  • Well regulated
  • Fast and free withdrawals
Cons
  • Limited base currencies
AlertAccepts Malaysian Clients. Average spread EUR/USD 0.00 pips with 6 USD commission round turn on the trading account with lowest minimum deposit. Max leverage 500:1. Islamic account available. MT4 and MT5 platforms supported. Tickmill is regulated by CySEC, FCA, FSCA, DFSA, and the FSA-Seychelles.

AvaTrade – Best Mobile Trading Experience

Broker Score
4.594.59 / 5
🏦  Min. DepositUSD 100
🛡️  Regulated By
💵  Trading Cost 
USD 9
⚖️  Max. Leverage400:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

AvaTrade offers Islamic accounts on MT4, MT5, Webtrader and the excellent and newly designed AvaTradeGo mobile app. The AvaTradeGo app offers Malaysian 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.

 

Pros
  • Top-tier regulation and security with licenses from ASIC and CBI among others
  • Accessible trading with a low minimum deposit of 100 USD
  • Award-winning mobile trading with the AvaTradeGO app with social trading features
  • Wide range of assets including unique instruments like vanilla options
  • Educational material to support trader development and strategy enhancement
Cons
  • Market analysis could be more extensive
  • Poor regulatory oversight outside of the UK and EU
  • Avatrade is a Market Maker and operate a dealing desk which might not align with all trading preferences
AlertAccepts Malaysian Clients. Spreads start at 0.90 pips on theEUR/USD on trading account with lowest minimum deposit. Max leverage 400:1. Islamic account available. MT4 & MT5 platforms supported. AvaTrade Group regulated by ASIC, FSCA, B.V.I FSC & FSA.

Pepperstone – Best ECN Islamic Account

Broker Score
4.614.61 / 5
🏦  Min. DepositUSD 0
🛡️  Regulated By
💵  Trading Cost 
USD 10
⚖️  Max. Leverage200:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

A well-regulated pure ECN broker, Pepperstone only offers swap-free accounts in countries with a large population of people of the Islamic faith, Malaysia included. 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.

Pros
  • Well regulated
  • Tight spreads
  • Great platform choice
  • Wide range of assets
Cons
  • Limited market analysis
AlertAccepts Malaysian Clients. Average spread EUR/USD 1.00 pips with 0.0 USD commission round turn on the trading account with lowest minimum deposit. Max leverage 200:1. Islamic account available. MT4, MT5 & cTrader platforms supported. Pepperstone is regulated by the FCA, ASIC, CySEC, SCB, CMA, BaFin and the DFSA.

XM – Lowest Cost Islamic Account

Broker Score
4.454.45 / 5
🏦  Min. DepositUSD 5
🛡️  Regulated By
💵  Trading Cost 
USD 6
⚖️  Max. Leverage1000:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

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.

Pros
  • Well regulated
  • Excellent education
  • Free deposits and withdrawals
Cons
  • Limited platform choice
AlertAccepts Malaysian Clients. Average spread EUR/USD 0.60 pips on trading account with lowest minimum deposit. Max leverage 1000:1. Islamic account available. MT4 & MT5 platforms supported. XM Group regulated by CySEC, ASIC, and the Belize FSC.

Admirals – Most Transparent Islamic Account

Broker Score
4.284.28 / 5
🏦  Min. DepositUSD 25
🛡️  Regulated By
💵  Trading Cost 
USD 8
⚖️  Max. Leverage500:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

A well-regulated broker, Admirals offers trading on multiple instruments, including Forex, shares, metals, commodities, ETFs, bonds, and indices.  Unlike many other brokers, Admirals publishes all information about the Islamic accounts on its website, and caters to Muslim traders with its Islamic Forex Account.  The swap-free account option is available on the Trade.MT5 account, and ensures Islamic traders do not pay or earn swaps or interest on CFDs on currency pairs, indices, commodities, shares, ETFs and bonds.

The Islamic Standard Account requires a minimum opening balance of 25 USD. Admirals does not widen spreads on Islamic Accounts, keeping them at 0.8 pips on the EUR/USD, and no commissions are charged on the trades.  Traders can access all other trading account benefits, including fast execution, and cutting-edge trading technology. Note that Admirals only charges administration fees on its Islamic account, if a trade is open for more than 3 days (1 day for digital currencies and exotic currency pairs), which vary depending on the instrument traded. 

Pros
  • Well regulated
  • Excellent education
  • Wide range of assets
Cons
  • Expensive withdrawals
AlertAccepts Malaysian Clients. Average spread EUR/USD 0.80 pips on trading account with lowest minimum deposit. Max leverage 500:1. Islamic account available. MT4, MT5 & MT4 Supreme Edition platforms supported. Admiral Markets is regulated by the FCA, ASIC, CySEC, and the JSC.

XTB – Best Proprietary Platform for Islamic Traders

Broker Score
4.394.39 / 5
🏦  Min. DepositUSD 0
🛡️  Regulated By
💵  Trading Cost 
USD 7
⚖️  Max. Leverage500:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 


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.

Pros
  • Well regulated
  • Tight spreads
  • Low minimum deposit
  • Good for beginners
Cons
  • Limited platform choice
AlertAccepts Malaysian Clients. Minimum spread EUR/USD 0.70 pips on trading account with lowest minimum deposit. Max leverage 500:1. Islamic account available. xStation5 platforms supported. XTB Group is regulated by CySEC, FSCA, DFSA, FCA and the IFSC.

HFM (HotForex) – Best Micro Account

Broker Score
4.534.53 / 5
🏦  Min. DepositUSD 0
🛡️  Regulated By
💵  Trading Cost 
USD 10
⚖️  Max. Leverage1000:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

HFM offers Islamic accounts for all customers of Muslim faith all accounts. Trading conditions are especially good on the Micro Account, with spreads starting at 1 pip, a low minimum deposit of 5 USD, and hedging, scalping, and copy-trading all available. While spreads are slightly wider than normal to cover the cost of removing the swap fee and MT5 is not supported, trading conditions are broadly similar to traditional trading accounts. 

Islamic accounts incur an additional carry charge on any position held overnight for more than 7 days. While this is not a significant cost, it does make positional trading more costly over the long term. All Islamic accounts feature market execution and maximum leverage of 1:500.

Pros
  • Low minimum deposit
  • Tight spreads
  • Well regulated
  • Good range of accounts
Cons
  • Limited base currencies
AlertAccepts Malaysian Clients. Average spread EUR/USD 1.00 pips on trading account with lowest minimum deposit. Max leverage 1000:1. Islamic account available. MT4 & MT5 platforms supported. HF Markets Group regulated by the FSCA, FCA, FSC, CySEC and the DFSA.

Markets.com – 900+ CFD:s, no commissions

Broker Score
4.684.68 / 5
🏦  Min. DepositUSD 100
🛡️  Regulated By
💵  Trading Cost 
USD 7
⚖️  Max. Leverage300:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

A market maker broker, Markets.com offers trading and investing on over 1500 instruments on a broad range of platform choices, including MT4, MT5, and its own proprietary platform. Markets.com offers one live commission-free account that can be converted into an Islamic Account. Markets.com does not apply a commission or spread markup to its Islamic swap-free account, making it a good choice for Islamic traders.

The Markets.com platform is an advanced multi-asset trading platform packed full of features and is available as an app for both Android and iOS. Islamic account-holders can access a range of fundamental, technical and sentiment-based trading tools and expert analysis, in addition to in-depth charting and comparison tools. Lastly, Islamic account-holders should be aware that some instruments are not available for swap-free trading.

Pros
  • Regulation by top-tier authorities
  • Hassle-free withdrawal process without any fees
  • Its proprietary trading platform is praised for its user-friendly interface catering to both beginners and experienced traders
  • Competitive spreads starting from 0.6 pips
Cons
  • The maximum leverage of 300:1 could pose a risk for uninformed traders warranting cautious utilization
AlertAccepts Malaysian Clients. Average spread EUR/USD 0.70 pips on trading account with lowest minimum deposit. Max leverage 300:1. Islamic account available. MT4 & MT5 platforms supported. MarketsX is regulated by the FCA, CySEC, ASIC, and the BVI FSC.

What is 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.

Islamic Finance in Malaysia

Malaysia is widely regarded as a pioneer of the Islamic financial system and the Islamic interbank market, but it is only relatively recently that Islamic banking truly emerged in Malaysia. For decades, conventional banks were the only way to access the banking system.

In 1983 Bank Negara Malaysia (BNM) launched Bank Islam Malaysia Bhd (BIMB) to handle the financial needs of the country’s Muslim population.

But it wasn’t until 1993, when the Ministry of Finance introduced the Skim Perbankan Tanpa Faedah SPTF or the Interest-Free Banking Scheme, that Islamic banking became widely available as a consumer product.

The Interest-Free Banking Scheme made it a legal obligation for all conventional banks to offer Islamic banking options alongside more traditional methods. Banks quickly developed Shari’ah-compliant subsidiaries to handle the huge demand for Islamic banking and by 1994 the BNM had approved a total of 21 Islamic financial products for domestic financial institutions.

This rapid increase in both the supply of and demand for Islamic banking products was simultaneous with the development of the Islamic interbank system, which only further boosted growth of the Islamic money market. This explosive growth is visible in the increase of total assets of the Islamic banking sector from MYR21.6 billion in 1998 to MYR35.7 billion in 1999, an incredible growth rate of 65.8%.

Today, the nation is in the curious state of having two parallel banking systems, one conventional and the other Islamic, but both well developed and hugely profitable.

Islamic Forex Trading in Malaysia

The key article of Islamic Mua’malat on Forex is the elimination of Riba – or interest on loans or assets.

Riba is central to conventional Forex trading, but some scholars believe that Islamic Forex transactions are not premised on the same philosophy as conventional practices, and are therefore legitimate 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.

In Malaysia, several 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.

What is an Islamic Forex Account?

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 have 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 some Forex brokers, you will need to open a real trading account which can then be converted into an Islamic account.  Very few brokers have a registration page specifically for Islamic accounts, but many brokers taking clients from predominantly Muslim countries automatically create accounts as Islamic accounts.

If you are in doubt, do not make any deposits before discussing with your account manager.

Forex Rollovers & 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 the Sharia 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, 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.  A majority of Forex brokers can accommodate followers of the Islamic faith by offering swap-free trading accounts that are compliant with Sharia 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: Leverage, market volatility, slippage arising from a lack of liquidity, inadequate trading knowledge or experience, and a lack of regulatory protection. Traders should not deposit any money that is not considered disposable income. 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 about these risks from the UK’s regulator, the FCA, or the Australian regulator, ASIC).

Our Rating & Review Methodology

Our State of the Market Report and Directory of CFD Brokers to Avoid are the result of extensive research on over 180 Forex brokers. These resources help traders find the best Forex brokers – and steer them away from the worst ones. These resources have been compiled using over 200 data points on each broker and over 3000 hours of research. Our team conducts all research independently: Testing brokers, gathering information from broker representatives and sifting through legal documents. Learn more about how we rank brokers

Editorial Team

 

Chris Cammack
Head of Content

Chris joined the company in 2019 after ten years experience in research, editorial and design for political and financial publications. His background has given him a deep knowledge of international financial markets and the geopolitics that affects them. Chris has a keen eye for editing and a voracious appetite for financial and political current affairs. He ensures that our content across all sites meets the standards of quality and transparency that our readers expect.

 

Alison Heyerdahl
Senior Financial Writer

Alison joined the team as a writer in 2021. She has a medical degree with a focus on physiotherapy and a bachelor’s in psychology. However, her interest in forex trading and her love for writing led her to switch careers, and she now has over eight years experience in research and content development. She has tested and reviewed 100+ brokers and has a great understanding of the Forex trading world.

 

Ida Hermansen
Financial Writer

Ida joined our team as a financial writer in 2023. She has a degree in Digital Marketing and a background in content writing and SEO. In addition to her marketing and writing skills, Ida also has an interest in cryptocurrencies and blockchain networks. Her interest in crypto trading led to a wider fascination with Forex technical analysis and price movement. She continues to develop her skills and knowledge in Forex trading and keeps a close eye on which Forex brokers offer the best trading environments for new traders.

 

Vanessa Marcos
Financial Writer

Vanessa joined the team in 2023. Born and raised in southern Portugal, she has a BA in Journalism and a Master’s in Literary Theory, both from Lisbon University. Since 2011, she has worked in social media, copywriting, content management, ghost-writing, and SEO. Vanessa loves to write, and although she is a generalist in digital marketing, she always draws on her creativity in her work. She is constantly researching new subjects and finds the analytical depth of Forex trading fascinating.

 

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