Despite a large amount of Muslim investors, not all brokers provide an Islamic Forex account. For those who have no clue what is behind it, let us give a short explanation of the requirements. Based on Islamic law, often referred to as Sharia law, Muslims are not allowed to make earning interest on their giving. This law also concerns the interest earned on any banking and investing. Hence the need for special accounts rose, resulting in various brokers providing these traders the ability to trade Forex in accordance with Sharia law by opening an Islamic Forex account where interest-free or in other words Swap free Forex trading is possible.
This is Forex Explore section where we expose Forex brokers with Muslim friendly features and trading conditions. here you can compare and read reviews and comments by other traders with experiences. Below you can choose Islamic Forex broker that suits your requirements the most. Here are brokers that can easily turn the traditional Forex account into an Islamic Forex account in couple of clicks and add all the features you might need for great trading experience without breaking the laws you believe in. You can choose to get a full picture by reading the complete reviews of our recommended Islamic Forex brokers.
What makes a forex broker’s account Islamic?
| Broker Reviews | Rating | Demo | Leverage | Islamic Swap Free | Platforms | Min Deposit | Payments |
| LiteFinance | 8 | yes | 1:500 | islamic | Metatrader 4, Metatrader 5, WebTerminal | 10 | Skrill, Webmoney, Bitcoin, Advcash, Credit Card |
| XM | 8 | yes | 1:888 | islamic | MetaTrader 4, Metatrader 5, XM Webtrader | 5 | Credit/Debit Card, Neteller, Skrill, WebMoney, Bank Wire Transfer |
| AvaTrade | 7 | yes | 1:400 | islamic | AvaTrader, MetaTrader 4, MetaTrader Floating Spread, Mac Trading, Web Trading, Mobile Trading, Automatic Trading, AvaOptions | 100 | Credit Cards, Debit Cards, Skrill, Wire Transfer, PayPal, Neteller, WebMoney |
| InstaForex | 7 | yes | 1:1,000 | islamic | MetaTrader 4, Metatrader 5, Webtrader | 1 | Some local Bank transfers, PayCo, AstroPay, Cryptocurrency |
| FxPro | 5 | yes | 1:500 | islamic | FxPro cTrader, FxPro cTrader Web, MT4 Client Terminal, MT4 MultiTerminal, MT4 WebTrader, MT4 Premium | 100 | Credit/Debit Card, Bank Wire, PayPal, Neteller, Skrill |
| FXCM | 5 | yes | 1:200 | islamic | Trading Station II, MetaTrader 4, Active Trader, Forex System Selector | 250 | Credit/Debit card, Online Check, Bank Wire, Paper Check |
| FXDD | 3 | yes | 1:200 | islamic | MetaTrader4, FXDD Trader, Power Trader, FXDD Auto, MTXtreme | 100 | Wire, PayPal, Check, BPS |
| iFOREX | 3 | yes | 1:400 | islamic | FXnet Trader | 100 | credit cards, wire transfer |
| Tickmill | 3 | yes | 1:500 | islamic | MetaTrader 4, Webtrader | 100 | wire transfer (commission are charged), credit/debit cards, Skrill, Neteller, FasaPay, UnionPay and WebMoney |
| Pepperstone | 3 | yes | 1:500 | islamic | Metatrader 4, Metatrader 5, cTrader, cAlgo, cMirror | 200 | bPay, credit cards, Paypal |
| Hotforex | 2 | yes | 1:1,000 | islamic | Metatrader 4, mobile platform, rapid trader fix/api | 5 | credit cards, skrill, Unionpay, neteller, wire transfer, webmoney, fasapay |
| Alpari | 2 | yes | 1:500 | islamic | MetaTrader 4 | 1 | Debit or Credit Card, Wire Transfer |
| Blackwell Global | 2 | yes | 1:200 | islamic | MetaTrader 4, Blackwell Pro, Mobile | 2000 | redit/debit cards, Neteller, Skrill, Wire transfer |
| EasyMarkets | 2 | yes | 1:100 | islamic | Metatrader 4, EasyMarkets web-based platform | 100 | credit cards, neteller, Skrill, Webmney, wire transfer |
| Markets.com | 2 | yes | 1:200 | islamic | Meta Trader 4,MarketTrader, Market WebTrader, Market Java Trader, Market Mobile Trader, Market WAP Trader, Market iTrader, Market AutoTrader | 100 | Credit/Debit Cards, Wire Transfer, Webmoney, Local Payments |
| eToro | 1 | yes | 1:30; 1:1 for Crypto Currencies | islamic | eToro Platform | 200 | Credit Cards, Debit Cards, Paypal, Neteller, Skrill, Webmoney, Wire Transfer |
| FXOpen | 1 | yes | 1:500 | islamic | MetaTrader 4 | 1 | Wire, WebMoney, AlertPay, CashU, c-gold, PerfectMoney |
| AdmiralMarkets | 1 | yes | 1:200 | islamic | MetaTrader 4 | 10 | Wire |
| FBS | 1 | yes | up to 1:3,000 | islamic | MetaTrader 4, Metatrader 5, Webtrading | 1 | credit cards, fasapay, Indonesia local banks, Neteller, okpay, perfectmoney, Skrill, Webmoney, wire transfer, Thai local banks, Exchangers, Malaysian banks and Bitcoin by Skrill |
| AGEA | 0 | yes | 1:500 | islamic | Streamster, MetaTrader 4 | 1 | Credit Cards, Wire, Skrill, Webmoney, e-Dinar, Neteller, FasaPay, Perfect Money |
| Oinvest | 0 | yes | 1:200 | islamic | Metatrader 4 | 200 | Skrill, Neteller, Credit Cards |
| TrioMarkets | 0 | yes | 1:300 | islamic | MetaTrader 4, Sirix Webtrader | 100 | Credit Card, Wire, Skrill, Neteller, Paypal and CashU |
| GrandCapital | 0 | yes | 500:1 | islamic | MetaTrader 4, WebTrader | 10 | Credit card, Neteller, Webmoney, CashU, Fasapay, Scrill, Webmoney |
| FXGrow | 0 | yes | 200:1 | islamic | MetaTrader 4, NetStation | 100 | Credit/Debit cards, Skrill, Neteller, OkPay, CashU, WireTransfer |
| Abshire-Smith | 0 | yes | 1:200 | islamic | Vertex fx, Metatrader 4, straticator | 500 | CashU, Neteller, Skrill, Wire Transfer |
| LH-Crypto | 0 | yes | 1:500 | islamic | Metatrader 4, Metatrader 5 | 10 | Bitcoin, Bitcoin Cash, Ethereum, Litecoin, Monero, DASH, Ripple, NEO, Visa, MasterCard, Web Money, QIWI, wire transfer |
| HonorFX | 0 | yes | 1:500 | islamic | Metatrader 5 | 100 | Credit Cards, Neteller, Skrill, Paypal, Bitpay, Fasapay, Perfect Money |
What makes a Forex Islamic account halal? Forex brokers wishing to attract Islamic clients have are a few basic principles they must apply to at least segment of their offering, thus creating the Islamic account. These concepts are a bit different from what the western world might understand as traditional banking or trading. Below, we explain three of the key concepts of Islamic law most relevant to the question of an Islamic Forex account.
Riba
“Riba” means increase, excess or addition and it refers to financial interest. It is seen as a type of usury and selfishness that can lead to hoarding. The charging of usurious interest as a business practice is deemed to have an adverse effect upon the Islamic ideal of fellowship in the community and is therefore prohibited under Sharia law.
Gharar
“Gharar” refers to risk, more precisely defined as “the sale of what is not present” and is a haram (forbidden) practice in Islam, forbidden by Sharia law. Those who abide by the Sharia may not gamble, sell short (in the traditional sense commonly referred to in stock trading), or conclude agreements which might involve uncertainty or chance.
The Mudharabah Arrangement
A “Mudharabah arrangement” is an arrangement or partnership between two parts: the financial role and the management of the funds. The financial role will invest, and the other will control the money.
However, in Sharia law, the Mudarabah Agreement can be restricted. This means the investor will only allow the one who manages the funds to administer them in a certain type of business or location. If it is unrestricted, it indicates that the management of the funds have no constraint.
Musharakah Arrangement
“Musharakah” means “to share”, and it is another type of partnership permitted by the Sharia law where both parties will benefit from earnings in a trade. In this way, the financial part will earn without having to go against the rule against Riba.
Losses must also be shared by those in a Musharakah Arrangement, but the amount of such will depend upon the amount of invested capital. On the other hand, the divided profit is previously set according to the agreement on the contract.
Islamic Prohibitions
According to Sharia law, there are a number of prohibitions applicable to Islamic traders. These reflect Islamic guidelines aimed at ensuring a prosperous and peaceful community. The major prohibitions are outlined below:
Overnight Rollovers
Overnight rollover is the interest that a trader is charged (or sometimes paid) for holding a position overnight. As an Islamic trader you will probably be charged a fixed commission per trade instead to make up for not being charged a commission. It is important to note that in most cases, each currency will have a different interest rate and therefore most likely differential commission rates, so it might be a good idea to look at the applicable fee before opening a position in a particular Forex currency pair or cross.
Interest on Margin Deposits
A margin deposit is an interest based on the cash deposit made with a Forex broker, which a few brokers offer to larger clients. Since margin trading involves a higher risk, the trader must present an initial amount before opening a leveraged position. Interest on margin deposits is not permitted in an Islamic Forex account since it goes against the “no Riba” principle.
Loans
Those who are compliant with Sharia law may not receive or give loans with interest.
Margin Trading
The Riba principle is broken by any trading on margin because margin involves the loan of money at interest given out by a lender who seeks benefit. Even if it has 0% interest, it still arguably may be a loan where the broker seeks benefit (an end profit made by the exchange).
Short Sales
Short sales (in the sense of shorting an equity) go against the Gharar principle because a true short seller is selling something they do not own. The Gharar principle is against “the sale of what is not present”.
Forward Sales
A forward sale is an agreement between two parties to buy or sell an asset at a specified price at a future date. Again, it is contrary to the Gharar principle.
What is Islamic Broker?
Islamic Broker is Broker with Islamic Account designed for traders following Islamic Finance, which is a specific method of financing and banking operations based and compliant with the principles of the Islamic or Sharia laws, while guided by Islamic economics.
Islamic laws applied rules to the trading industry, since by its nature Forex in Islamic perspective might be a forbidden type of investment, and created specialized Islamic Account to enable worldwide traders of the Islamic religion to join international trading of global markets. Read about Islamic Trading via Wikipedia.
- The primary principle in the Islamic trading process regulation is to avoid any harmful activities, mainly avoid investments interest, restrict high-risk transactions which prohibit margin and derivatives trading. Also, the Islamic Broker Account should not apply swap or rollover commissions, or interest on overnight positions.
- Every broker that offers an Islamic Account must ensure that all rules are followed and risks are minimized. Recently, the increasing demand brings a wide range of respected Brokers offering Islamic Account, however Islamic worlds and mainly the Middle East still remains highly operated by the offshore and non-regulated companies which we recommend to avoid due to highest risk of scams.
Best Islamic Brokers – Conclusion
To conclude, this guide has taken an in-depth look at the best Islamic brokers on the market, highlighting their fees, features, and trading tools. More brokers than ever now offer an Islamic account that complies with Sharia law – ensuring Muslim traders can obtain the same trading experience whilst abiding by their faith.
For those interested in halal trading, we recommend partnering with Capital.com. Although Capital.com doesn’t yet offer a dedicated Islamic account, it does provide day trading services that are halal if certain conditions are followed. What’s more, Capital.com charges no commissions and allows positions to be opened from as little as $1.
What are the advantages of an Islamic account?
Obviously the main attraction of the Islamic account is that it allows those who follow Sharia Law to trade on the markets without breaking with their faith. It also allows traders to stay true to their morals and ethics. Islamic accounts are founded on the principles of fairness and transparency in financial markets.
