Forex trading can be challenging for religion-abiding Muslims. Compare the top 5 brokers with Islamic Forex accounts. Traditional Forex trading can pose problems for religion-abiding Muslims because it often involves interest. Your Forex broker could charge interest if you borrow to open a position. And if you keep your position open overnight, you could stand to receive or pay interest depending on the prevailing interest rates. It is possible to trade currencies without incurring interest: Instead, you could open an account with a Sharia-compliant broker Forex broker to enjoy interest-free leverage and avoid interest on rollovers.
If you're a non-Muslim thinking of opening an Islamic account simply to avoid interest, think again. Most brokers will ask that you provide evidence of your faith if you request a Sharia compliant account. They could close your account altogether if they have grounds to believe you are trying to game the system.
Interest-free doesn't necessarily mean you'll be at an advantage, as some brokers will look for alternative sources of revenue if they cannot charge interest. This is why Islamic accounts can have marginally wider spreads than conventional accounts. Other brokers may require higher minimum deposits. However, this isn't always the case. In addition, you can keep your open positions overnight for up to 14 days at no additional cost. Others, such as HotForex tend to apply a carry charge after 7 days.
Our comparison table shows popular Forex brokers with Islamic accounts. Some brokers such as easyMarkets or HotForex have dedicated Islamic accounts, in which case signing up is straight forward.
Finally, others such as AvaTrade. You'll need to speak to your account manager to make that happen before placing your first trade.
Trading foreign exchange, contracts for differences or spread bets on margin carries a high level of risk and may not be suitable for all investors. You could sustain a loss of some or all of your funds if the markets move against you. For this reason, you should not invest more than you could afford to lose.
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Specifications Floating Spreads Fixed Spreads. Forex trading and the Sharia Traditional Forex trading can pose problems for religion-abiding Muslims because it often involves interest. Benefits of an Islamic broker Instead, you could open an account with a Sharia-compliant broker Forex broker to enjoy interest-free leverage and avoid interest on rollovers. Islamic Forex brokers will provide interest-free leverage.
In other words, you can borrow entirely free of charge. With an Islamic Forex account, your open positions will be closed by 5pm New York time to avoid rollover interest. You can them re-open them immediately after that.
Some brokers will open them on your behalf free of charge. Are there any disadvantages? How to open an Islamic account Our comparison table shows popular Forex brokers with Islamic accounts. Featured Brokers 1 for Beginners. Do you have a question about Forex? Ask your question in our Forums.More...