Minimum Deposit

starting at USD 5

Welcome Bonus

up to Bonus Promotion

Sign up
CFD service. Your capital is at risk.
Remember that CFDs are a leveraged product and can result in the loss of your entire capital. Please ensure you fully understand the risks involved.

What is an Islamic account in forex?

In this article
5 stars from 881 ratings

Broker Verified

Bonus Promotion
Deriv offers competitive trading conditions such as STP execution, tight spreads, leverage of 1:1000 and a low minimum deposit.
CFD service. Your capital is at risk.
Remember that CFDs are a leveraged product and can result in the loss of your entire capital. Please ensure you fully understand the risks involved.

What are Islamic Forex Accounts? Islam Forex accounts are halal accounts offered to customers if they believe in the Quran or want investments in the Islamic stock market using Islamic finance practices.

Islamic Trade Accounts or Islamic Swap-free Accounts have different rules regarding how they compare with the normal Forex Accounts.

Because Sharia law prohibits the accumulation of interest, the trader has no way of paying interest on their Islamic accounts.

All accounts with Islamic financial services should be executed without delay, currency transfers must happen immediately, and the transaction costs must also take effect simultaneously.

When you look at the account types of most brokers, you’ll see an Islamic account.

But what is an Islamic account, and how can you open a live account? This guide will break down the Islamic account, some of its basic features, and how you can open it.

You will also learn how Islamic trading accounts differ from regular forex accounts.

Forex Islamic account explained

Top Of the Mosque And Islamic Symbol 3D rendering

Min. Deposit
Max. Leverage
Deriv Broker Review
5 stars from 881 ratings

Broker Verified



Bonus Promotion



Review Sign up Sign up
CFD service. Your capital is at risk.
Remember that CFDs are a leveraged product and can result in the loss of your entire capital. Please ensure you fully understand the risks involved.

An Islamic FX account is a halal trading account available to clients who want to invest according to the Islamic faith.

Islamic trading accounts, often known as swap-free accounts, vary from normal FX accounts in many respects. For example, traders with an Islamic account do not pay or earn interest rates since Sharia law bans interest accrual.

Transactions in an Islamic account must be completed as quickly as possible, so currencies must be moved from one account to another as soon as possible, and we must pay simultaneously transaction charges.

Forex involves analyzing data and market movements to make financial decisions. It is not gambling.

Payment of different fees as interest, such as rollover fees, is an important element of forex trading. These charges are waived for the Islamic trading account.

The need for an Islamic account

There is a debate among scholars that forex accounts are acceptable in Islam. Forex trading is halal and does not contradict Islamic finance’s core principles.

However, forex trading is becoming more accessible daily, and the promise of rapid riches is luring more traders. Because it’s only about buying and selling money, it appears to be a halal investment option at first look.

For example, it is a halal transaction to buy the Euro against the Dollar (EUR USD) and sell later when the Euro has risen against the Dollar. Sharia law, or Islamic law, forbids providing or receiving interest in any form.

This restriction stems from the notion that devout Muslims should contribute only to give, not to receive something in return.

That is why Islamic FX accounts with no interest were developed.

The concept of forex Riba

When a trader keeps open positions after the trading session ends, the broker often charges a swap commission, equivalent to an interest rate.

That the broker provides you with an indirect loan through leverage is connected to this interest rate. As with any loan, it is natural for the lender, who in this case is the broker, to profit from it.

As a result, a normal trading account is Haram because it requires interest costs, but an Islamic trading account is halal since it does not need the payment of swap interests.

In reality, Islam is permissible to borrow money from someone to invest for profit and then repay the creditor with no interest.

Instead of charging fees and commissions to stay profitable, the broker charges fees and commissions, which some may consider a hidden interest.

However, do many academics support this approach of facilitating trade? As a result, an Islamic trading account without swaps can get over the Riba barrier.

How can you open a forex Islamic account?

To open an Islamic account, you must register with your broker and provide the docs.

Like any other account, make sure you open an account with a reliable broker. You must dig deeper and understand all the peculiarities before opening an account.

How do Swap-Free Islamic Accounts work?

What is the commission structure for retail investor accounts?

In the financial market, swaps apply to those who leave positions open for over 24 hours. Sharia law prohibits this type of interest since it makes up interest. Very few brokers maintain overnight positions in retail investor accounts by applying fixed fees or commissions.

No-swap period

Depending on the broker, you may only trade swap-free for a certain period. We also know it as a swap-free period or no-swap period. A good Islamic Forex trading broker will allow unlimited swap-free trading.

Terms & conditions

If you are going to trade, Islamic Forex, you should always read the terms and conditions because that is where the small print can be found.

When opening an Islamic trading account, it is important to understand all times, as these may affect your cost of trading. For instance, the broker may not charge an interest rate but may charge a commission.

Islamic prohibitions

Islam prohibits several actions concerning traders according to Sharia law. This is in line with Islamic guidelines, which aim to make the community prosperous and peaceful.

Here are a few of the most important prohibitions:

Overnight rollovers

Trades held overnight are charged interest (or sometimes paid interest) due to overnight rollovers. Because we may not charge you a commission as an Islamic trader, you will probably be assigned a fixed commission per trade instead.

The interest rates on each currency will vary in most cases, so there will be a difference in commission rates. If you are considering opening a position in a particular Forex currency pair or cross, check the applicable fee.

Interest in margin deposits

In Forex trading, margin deposits are interest payments based on cash deposits with Muslim Forex brokers, which are offered to larger clients by a few brokers.

Because of the higher risk involved in margin trading, a trader must present an initial amount before setting up a leveraged position.

Since Islamic Forex accounts follow the “no Riba” principle, interest on margin deposits is not permitted.


Sharia law does not permit those who adhere.

Margin trading

Any margin trading violates the Riba principle since margin involves loaning money to a lender at interest for a profit. It may still make up a loan that a broker seeks to benefit from (an end profit made by the currency exchange), even if the interest rate is 0%.

Short sales

As a true short seller, you are selling something you don’t own, which is against the Gharar principle. There is a Gharar principle that prohibits selling something that does not exist.

Forward sales

A forward sale involves two parties agreeing to buy or sell an asset at a specified price. This is also contrary to Gharar’s principles.

Eliminating interest in Forex trading

Muslims are rightfully concerned about the legality of Forex trading in Islam or is day trading Halal or Haram.

There might be some people who are unfamiliar with these last two terms. However, it is essential to note that their meaning is clearly defined.

Halal is permissible and acceptable in Islam, whereas Haram is forbidden and sinful.

As a result, the brokerage companies must remove interest charges from the equation to make Currency Trading Halal, as Islamic law prohibits interest charges and payments.

Traders who leave open positions overnight on traditional trading accounts are required to pay or receive interest, referred to as swapping or rolling over.

Exchange rate fluctuations between two currencies, which make up the currency pair, determine whether a market participant will receive or pay the swap.

Besides this, brokerage firms also charge a commission on these interest rate differentials.

The Islamic account is a contrasting structure, which eliminates these dynamics. It relieves traders of having to deal with rollover charges when trading different currency pairs without worrying about keeping positions open.

A scalper or day trader may not have a problem with this. Market participants who trade in this manner close their positions before the end of the trading day, avoiding rollover charges.

Traders who engage in swing and long-term trading may experience an important negative impact on their earnings because of this.

Their retail investor accounts lose money when trading Forex without market analysis.

Trading with swap-free commissions allows participants to choose any position with major currencies without worrying about rollover costs.

Then they can decide what to trade solely based on technical and fundamental indicators, without considering the interest rate differentials between two currencies.

Forex trading would become Haram if brokers began charging interest to these clients.

Is Forex trading halal or haram?

Because of the rising community of the Muslim faith and the development of online trading, it is increasingly important to discuss the stock market in Islam.

We will examine a range of viewpoints and sources in this section to determine whether trading is halal or haram.

Specifically, the paper will analyze the Forex market and its actions in depth, as well as advise on remaining halal and seeing which trading instruments can trade according to Sharia Law.

In terms of currency trading, stocks, futures, commodities, and currencies, is it halal or haram to invest in the stock market?

A Muslim investor who wants to invest in finance but has Muslim faith asks this question.

While Islam permits improvements in one’s financial situation, there is still scepticism about the stock market.

Do you believe that Forex trading is halal? 

According to the Islamic faith, Forex trading is halal by definition. A growing number of traders are becoming interested in foreign exchange trading because it offers quick profits and is easier to access.

Because it involves simply buying and selling money, it, at first glance, appears to be a halal investment opportunity. There are some things to consider.

A halal transaction involves buying Euros against the Dollar (EUR USD) and then selling them when the Euro has appreciated. Although the Islamic trade account aims to solve several problems, they persist in reality.

Islamic current trading account commissions

All traditional accounts generate swap interest, but Islamic trading does not. This makes Islamic trading unique.

Trading currencies is Haram because currency swaps are interest paid or received by traders when they leave an open position overnight.

Muslims must use Islamic currency trading accounts to trade on the Halal stock exchange, eliminating these interests. However, how much do traders pay in commissions?

It is not in the interest of Riba Haram to collect margins, commissions, and administrative fees from Muslim customers using an Islamic trading account.

Islamic finance: hand-in-hand halal trading

Next, we focus on the exchange itself, excluding the interest item. Trading is acceptable in Islam as long as it occurs in a “hand in hand” fashion.

Before electronic commerce, it did most transactions face-to-face. In what sense do we mean by “hand in hand”?

Approximately half of Muslims argue that halal is permissible only when there are two different parties, brokers, and traders.

Further, investigators said we must complete the contract during the same “session” in which the exchange occurred.

Forex traders typically execute orders within a few seconds or less, which is why transactions must be completed right away.

Thus, binary options, for instance, do not fall within the Halal framework, where goods trade differently, which is prohibited.

How do Islamic accounts work?

Traders with Admirals have access to the main markets for currency trading, futures trading, stock trading, raw material trading, and cash trading.

They also have access to rarer markets such as cryptocurrencies, bonds, and ETFs (funds traded on the stock exchange).

If a Muslim investor wishes to take part in Islamic trading according to Sharia law mandates, he may wonder which assets he can invest in. Only bonds and futures are not halal financial markets.

In finance, bonds are treasury bills. Bonds have fixed interest rates during their lifetimes at the time of issuance.

As a percentage of the bond’s original value, the market fluctuations in supply and demand do not affect the return on investment.

Even if you do not receive interest on CFDs when you invest, the value of the interest rate is the driving force behind the spread, so bonds can make up Haram since interest rates are at the root of the space.

Therefore, the investment in this asset is the equivalent of taking advantage of an interest rate. Because of the delay between signing a purchase or sale agreement and exchanging goods, they also considered futures contracts in Haram. There is a delay.

Islamic cryptocurrencies do not exist. They do not cater to Islamic finance. But they operate similarly to traditional Forex currency pairs. Since they trade against dollars or other currencies, their fluctuation depends only on supply and demand.

Islamic finance: risk and reward in halal trading

There are risks involved in online trading, which is a major concern.

Learn about risk management to avoid the high risk of losing money.

Several principles regulate this component, such as Bai al inah (sale and repurchase), Bai salam, Mudarabah (profit sharing), Bai muajjjal (credit sale), Bai bithaman ajil (sale subject to deferred payment), Murabaha, and Musawamah.

Investments are investments in assets. You get a profit if this asset appreciates. You incur a loss if, however; the help loses value.

This way, you share the benefits and risks of running a successful business. Therefore, trading is fully compatible with Islam.

Trading commodities with Islamic Forex broker accounts

Some brokerage companies back the commodity trades on their Islamic Halal accounts with their actual precious metals holdings so that real assets support the commodity trades such as gold and silver.

It is usual for the broker to store the physical gold and silver in a bank vault after purchasing it from the dealer.

The firm will increase or reduce those holdings depending on what trades on the Islamic trading accounts.

These accounts do not charge a rollover fee for holding positions on commodities open overnight, just as they do for currency pairs.

Trading commodities over the long term has several advantages for long-term traders.

In those cases, market participants have greater confidence in the firm’s solvency.

It may be a good idea to sell some of your precious metal holdings if, say, gold suddenly surges in price and traders make substantial gains.

The spreads with commodities, like the currency pairs, are wider for Islamic trading accounts, as eliminating swaps minimizes revenue earned from exchanges.

Can we purchase shares according to Islamic Finance?

Purchasing shares is not considered Haram. This is because you invest in a company by buying a percentage.

It is important to make sure the company in question complies with Shariah law.

In the alcohol industry and gambling industry, for example, companies like Pernod Ricard and Française des Jeux do not comply with halal requirements.

Islam-based companies fall into two categories:

Activities resulting from halal practices

Transportation by sea, manufacturing, clothing, medical equipment, real estate, furniture, supplies, and so forth They do not practice or engage in haram transactions.

Those who engage in haram practices

Any business that deals in alcohol, gambling, or Riba banks. There is no halal certification for it. This makes stock exchanges Haram.

According to most researchers, investing in the shares of companies that sell only a fraction of non-halal goods and services is still possible.

The non-halal section of the company should contribute the percentage of profits it generates.

For example, if 10% of your company’s profit comes from alcohol, you would donate 10% of that profit to a charity.

Are CFDs halal or haram in Islam?

Islamic law forbids trading CFDs, and the reasons are very simple. A CFD trader owns nothing, including products and assets.

He predicts whether the price will rise or fall without actually owning the asset.

Essentially in trading CFDs, you buy and sell assets you do not own, intending to sell before borrowing.

This is like how a financial broker sells shares on behalf of a client and then deposits the proceeds into the client’s account.

If one financial asset is not the same type as another and the profit got from it is Halal, then exchanging them is not a problem.

We consider it Haram in Islam if we grant a broker credit for a client’s capital (Leverage) to lend it to the client.

What to look for in an Islamic account?

You can choose from reputable forex regulators, including the United Kingdom’s Financial Conduct Authority (FCA), the Cyprus Securities and Exchange Commission (CySEC), and the U.S.

The Commission for Commodities Futures Trading, the National Futures Association, or the Australian Securities Investment Commission.

Islamic brokers that offer swap-free Islamic accounts usually limit the period during which the report is free from swaps.

You will only find a few brokers who allow you an unlimited swap-free period.

On most accounts, swap-free accounts last for 5 or 14 business days.

The forex brokers often ask for proof of religious affiliation and show why the client needs a Muslim account.

You should check the specific terms and conditions of each broker’s Islamic account, considering there can be considerable differences.

Find out how long a broker will keep your trading account swap-free and whether Islamic accounts require a higher deposit.

When looking into Islamic accounts, ask about dealing spreads and the maximum leverage ratio.

As for a regular forex account, consider various elements when choosing an Islamic account, including a trading platform, currency pairs, asset types, customer support, a website and trading platform in the language you prefer, and educational resources.

For beginners in Forex, look, for a forex broker that also offers an Islamic account.

The best Forex brokers with Islamic accounts

It largely depends on your needs as a trader that you can find the best forex broker.

It is best to choose a broker that offers educational resources and is easy to use if you have experience trading the forex market, but if you are brand new, you will want one that offers a simple trading platform.

The following is a list of forex brokers that offer Islamic accounts.

Best Islamic Forex brokers with swap-free accounts

Here are some of the top Forex brokers that offer the best Islamic forex accounts.

IC Markets

Provider of Best Islamic forex accounts with Extensive Regulation

An important part of the popularity of IC Markets can be found because it appeals to algorithmic traders. Financial Services Commission and Financial Services Authority regulate IC Markets, which has been in business since 2007, ensuring high investor protection standards.

With an account spread of as little as 0.0 pips, Muslim traders can trade over 60 currency pairs using several trading tools. The micro lot trading option IC Markets offers is also ideal for beginners.

As well as this, IC Markets’ execution speed averages less than 40ms, which helps prevent slippage.


Excellent Islamic FX Broker with Social Trading App

Founded over 13 years ago, FBS is one of the leading CFD brokers in the world. As a Cyprus Securities and Exchange Commission (CySEC) and Financial Services Authority-regulated broker, this broker enjoys a safe reputation in the industry.

The EUR USD spread for FBS is as low as 0.7 pips, and there are 100 currency pairs to choose from.

It also offers low Forex fees to trade currencies

It also provides multiple trading tools and educational research.

A minimum deposit of $100 is necessary for a standard account; micro lot trading is available. Professional traders can get leverage up to 500:1 on all accounts.

Influence of up to 30:1 available on all accounts. You can deposit with credit/debit cards, Neteller, Skrill, or Rapid.


ECN Trading with FXTM – One of the Best Brokers with Swap-free trading account

FXTM‘s logo may also interest investors seeking the best Islamic trading account.

In 2011, FXTM became a global broker licensed by the Financial Services Commission FSC and CySEC. With FXTM, traders can trade currency pairs, stocks, indices, commodities, and cryptocurrencies.

Among FXTM’s most appealing features are its ECN accounts and social trading. MT4 is used to operate these accounts and spreads start at 0.0 pips.

However, high-volume traders will encounter a $2 per lot commission with the ECN account.

What are some strategies you can apply to an Islamic account?

You can apply several strategies to the Islamic forex account. Here are a few of them:

1. Day trading

Day trading is a common method of purchasing and selling a financial instrument over a single trading day to profit from tiny price fluctuations.

Day trading is a type of short-term trading where, unlike scalping, you only take one transaction each day and close it out when the day is over.

So, an Islamic account is beneficial for day trading, as you go in and out of the trades within a day and don’t have to pay any commissions.

2. Scalping

Forex scalping is a trading strategy in which forex traders purchase or sell currency pairs with a short holding period to generate rapid profits.

A forex scalper seeks to make many trades to profit from minor price fluctuations that often occur throughout the day.

While scalping aims to capture modest profits for each trade, such as 5 to 20 pips, the profit on these trades may increase by raising the position size.

3. Swing trading

Swing trading is a type of trading whose goal is to achieve short- to medium-term gains spanning a few days to several weeks.

Swing trading aims to profit from a portion of a price change.

4. Position trading

Position trading is a long-term trading style in which a trader holds a position for several months or years. Position trading differs from day trading because it does not involve traders actively observing the market.

Pros of Forex Islamic account

  • The primary distinction between Islamic and basic accounts is that swap commissions don’t apply.
  • It can be an important benefit since you can start long-term trades without the danger of losing money owing to exchange commissions.
  • The second major benefit is that the trader will open positions in currency pairings with very high swap fees (especially in exotic pairs).

Cons of Forex Islamic account

  • The lack of a swap can also harm halal forex traders since they cannot benefit from the positive interest payments frequently provided on short positions and the advantages of carrying trading techniques.
  • To be profitable once interest vanishes, non-swap brokers frequently charge a set administration fee, similar to what banks do in Islamic financing.


What is an Islamic trading Forex account?

In Islam, a trading account complies with Islamic Sharia law and qualifies as an Islamic trading account.

Respecting Islamic social trading fellowship requires Islamic accounts to adhere to certain principles.

Is Forex halal or Haram?

In Islamic Forex trading, it is permissible to trade Forex through Halal Forex accounts.

Is online Forex trading permissible in Islam?

Islamic law does not mention halal Forex trading specifically. The country has commerce and value exchange rules, but they must be “hand to hand.”

What is a swap-free account in Forex?

With a swap-free account in Forex, you won’t pay swapped interest when you keep a trade position open overnight.

In most cases, commissions will cover the difference.

Is an Islamic Forex account available at the best Islamic forex brokers?

Several international Forex brokers offer Islamic accounts to Muslim traders, claiming to comply with Islamic law.

Swap-free accounts remain the same, but Forex brokers substitute the costs through increased spreads or fixed commissions that comply with Sharia law.

Can you trade Forex on Islamic accounts without investment advice?

Most forex brokers grant Islamic accounts upon request without additional verification.

Muslim traders must request customer support, which can be accepted or rejected by the Forex broker.

A Forex broker reserves the right to cancel an Islamic account if it suspects abuse of a swap-free offer.

What is an Islamic broker?

Traders can trade with an Islamic broker under Sharia law-compliant trading conditions. Notably, overnight swap rates are not available in standard Islamic accounts.

It is common for brokers to claim to offer Islamic accounts.

Overnight positions with leveraged financing are more expensive since no financing fees are attached.

Bottom line

Forex Islamic accounts aren’t for everyone, but if you’re a trader who likes to roll over open positions to the following trading day, you’ll love them.

Using an Islamic account, you can keep your trades open overnight without paying rollover or interest fees.

You can begin trading on the Halal Exchange as soon as you receive confirmation that your Islamic Forex account has been opened using the payment method of your choice.

It has never been easier to open an Islamic trading account.

With your online account, you can request a withdrawal of your earnings or funds.

Practicing Islamic trading without risk with a demo account is possible.

Virtual funds will allow you to do extensive market analysis. They are free!

Relevant Posts