Forex Brokers with Islamic Accounts

Written by Zornitsa Stefanova

Zornitsa Stefanova

Zornitsa Stefanova is experienced forex and crypto analyst. She also covers various financial topics such as stocks trading and retirement investments.

, | Updated: June 13, 2024

Searching for trustworthy brokers operating in compliance with the principles of Sharia finance? We, at Best Brokers, present you with a shortlist of the top-rated trading sites offering Islamic accounts. The ranking below is based on first-hand analysis and painstaking research conducted by our in-house team of experts. The brokers shortlisted below all offer swap-free accounts with outstanding trading conditions, allowing Muslim customers to extract more value from their trading sessions.

1Fusion Markets

Rating: 4.8 ⭐

74-89% of retail CFD accounts lose money

2IC Markets

Rating: 4.8 ⭐

70.64% of retail investor accounts lose money

3AvaTrade

Rating: 4.5 ⭐

76% of retail investor accounts lose money

4Pepperstone

Rating: 4.5 ⭐

75.5% of retail investor accounts lose money

5eToro

Rating: 4.2 ⭐

51% of retail investor accounts lose money

6Admirals

Rating: 4.1 ⭐

73% of retail investor accounts lose money

7FxPro

Rating: 3.9 ⭐

74% of retail investor accounts lose money

8Vantage FX

Rating: 3.4 ⭐

9Tickmill

Rating: 3.4 ⭐

70% of retail investor accounts lose money

10Axi

Rating: 3.3 ⭐

The vast majority of retail client accounts lose money

Top 10 Brokers with Islamic Accounts

1. TRADE NOW READ REVIEW
   1. AvaTrade

   AvaTrade is a long-standing online broker with over 18 years of experience providing low-cost trading services. The established brokerage services over 400,000 customers worldwide, with licenses from top-tier financial regulators like CySEC, KNF, and ASIC. Beyond its robust regulatory background, AvaTrade offers competitive spreads for over 1,000 financial instruments, from forex and stocks to bonds, treasuries, and commodities.

   The broker caters to Islamic customers with swap-free accounts, allowing them to maintain open positions for up to five days without incurring overnight charges. Islamic clients can request swap-free accounts after verifying their identities and funding their live balance. AvaTrade takes one to two business days to assess the requests.

   CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
2. TRADE NOW READ REVIEW
   2. Fusion Markets

   Fusion Markets is a top-ranking discount broker praised for offering favorable terms, lower-than-average commissions, and sharp spreads from zero pips. Licensed in Vanuatu, Australia, and the Seychelles, the broker offers over 250 financial instruments and two main account types (Classic and Zero). Swap-free MT4 and MT5 accounts in eight base currencies are available to eligible Islamic customers.

   Islamic traders will benefit from minimum spreads of 1.4 pips, no commissions, and micro-lot trading. There are no strategy restrictions or minimum balance requirements for swap-free accounts at Fusion Markets. Eligible clients can scalp, hedge, and engage in algorithmic trading. Traders can leave their positions open for up to seven days without incurring overnight fees.

   Gleneagle Asset Management Limited (ABN 29 103 162 278) trading as Fusion Markets, is the issuer of the Fusion Markets Products described in this communication. Trading in Fusion Markets Products involves the potential for profit as well as the risk of loss which may vastly exceed the amount of your initial deposit and is not suitable for all investors. You should read all of these Financial Product Service Terms, the Product Disclosure Statement (PDS) and the Financial Services Guide (available on our website) carefully, consider your own financial situation, needs and objectives for investing in these Fusion Markets Products and obtain independent financial advice.
3. TRADE NOW READ REVIEW
   3. Pepperstone

   Pepperstone is a Melbourne-based broker with a global presence extending to over 170 countries. The brokerage attracts traders with super-tight spreads, swift and reliable execution, and a robust regulatory background. The fact it delivers highly competitive prices for over 1,200 financial markets further increases the appeal of Pepperstone. Clients can place orders via familiar trading platforms like MT5, MT4, cTrader, and TradingView.

   Traders whose religious beliefs prevent them from paying or receiving interest can conveniently register commission-free Islamic accounts. Swap-free accounts at Pepperstone offer average spreads of 0.77 pips and support trading in micro lots. They are available in four base currencies with no hedging or scalping restrictions.

   CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.5% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
4. TRADE NOW READ REVIEW
   4. eToro

   In business since 2007, eToro runs the world’s largest network for social and copy trading. It currently caters to a global community of over 30 million registered users, providing them with a choice from a whopping 5,000 tradable markets. Its proprietary multi-asset platform supports low-cost trading across all major asset classes, including forex, stocks, indices, commodities, and crypto.

   Trading via the eToro platform is possible both with or without using leverage. New eToro clients seeking interest-free options can apply for Sharia-compliant accounts without swaps and account management charges. Interested customers must sign up, verify their identities, and deposit at least $1,000 before applying for Islamic accounts at eToro.

   CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
5. TRADE NOW READ REVIEW
   5. Vantage FX

   Established in 2009, Vantage is a time-tested broker offering competitive and transparent pricing for over 1,000 CFDs. Headquartered in Sydney, the brokerage caters to clients from over 170 jurisdictions with authorization from ASIC, SFCA, and VFSC. Registered customers can trade via MT5, MT4, TradingView, or ProTrader.

   Clients trading through swap-free accounts can choose from a more limited selection of markets (500+). They will benefit from institutional-grade liquidity delivered by top-tier liquidity providers. From what we gather, traders with swap-free accounts can connect them to MetaTrader 4 only. Vantage offers Pro ECN, Raw ECN, and Standard STP Islamic accounts.

6. TRADE NOW READ REVIEW
   6. Admirals

   Admirals is a strictly regulated broker, serving global customers for over two decades. Traders praise the brand for its extensive investor education content, competitive pricing, and robust tools for risk management. The broker ring-fences client funds in segregated accounts. It offers insurance coverage of up to €100,000 to retail traders registered through its CySEC-regulated entity.

   Customers of the reputable brokerage can explore over 4,000 CFD products for currencies, shares, indices, commodities, and crypto assets. Islamic traders at Admirals can connect their swap-free accounts to MT5. They will benefit from sharp spread, nearly instant execution, and low administration fees on positions that remain open for over three days.

   CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
7. TRADE NOW READ REVIEW
   7. Tickmill

   With over a decade of market experience, Tickmill is renowned for offering ultra-tight spreads, lower-than-average commissions, and lightning-fast order execution. Its CySEC, FCA, and FSCA licenses make a good case for the legitimacy of this broker. Tickmill offers no shortage of investment and trading opportunities as its portfolio encompasses over 600 financial instruments, including 60+ forex pairs.

   Tickmill customers can advance their trading expertise with a healthy range of educational materials, including video tutorials, ebooks, infographics, market insights, and articles. It offers Sharia-compliant accounts to customers of the Muslim faith with competitive administrative fees applicable after six charge-free days.

   CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with Tickmill Europe Ltd. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
8. TRADE NOW READ REVIEW
   8. IC Markets

   Established in 2007, IC Markets has grown into a leading forex brokerage catering to over 200,000 active customers worldwide. The multi-regulated broker attracts savvy traders with a mix of deep top-grade liquidity, superior order processing, and raw spreads. Its impressive selection of over 2,200 financial instruments further adds to the broker’s appeal.

   MT5, MT4, and cTrader are all viable platform options for customers of IC Markets. The broker offers Standard and Raw accounts, allowing Muslim customers to trade without interest on overnight positions. Islamic accounts come with spreads as low as zero pips and leverage of up to 1:1000 via the broker’s Seychelles-licensed entity.

   CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70.64% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
9. TRADE NOW READ REVIEW
   9. Axi

   Axi is a low-cost forex broker regulated in the UK, Australia, and Cyprus. The multi-licensed brand has established itself as a global leader dedicated to providing superior spreads and order execution, coupled with best-in-class customer care. It offers transparent pricing for over 220 financial products, complemented by a full suite of educational and market research resources.

   The broker accepts fee-free deposits and withdrawals with trusted payment methods like Mastercard, Neteller, and Visa. Funding your Islamic account is also possible via standard bank transfers. Swap-free traders gain access to over 140 instruments, including currencies, commodities, and stock indices.

   CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
10. TRADE NOW READ REVIEW
    10. FxPro

    Established in 2006, FxPro is a trusted online broker offering seamless order execution and highly favorable trading conditions to over 7.8 million clients worldwide. The broker operates under the regulatory purview of CySEC, SCB, FCA, and FSCA. It facilitates trading with over 2,000 financial instruments, including 70 currency pairs, stocks, futures, commodities, cryptocurrencies, and indices.

    Traders can place orders via MT4, MT5, cTrader, or the broker’s proprietary trading platform. Each customer is eligible for up to five live trading accounts. Islamic accounts are also available to clients who wish to trade without paying or earning interest. Traders must email their requests to the FxPro back-office department to apply for swap-free accounts.

    Trade Responsibly. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Comprehensive Comparison of the Top 10 Forex Brokers with Islamic Accounts

What Are Islamic Accounts?

Islamic finance adheres to a set of religious principles known as the Sharia law. Sharia prohibits activities like charging or paying interest (riba), gambling (maisir), and engaging in financial transactions like short selling that involve excessive uncertainty (gharar). Riba, maisir, and gharar are all “haram”, or unacceptable, according to Islamic law.

Traders dealing in derivatives like contracts for difference normally earn or pay interest on leveraged positions that remain open overnight. Forex brokers pay or charge swap fees when maintaining client positions past the daily rollover point. The practice could prove problematic for Muslim customers as swaps are a form of usury or interest, according to Sharia principles.

To circumvent this issue, many brokers cater to Muslim clients with Islamic accounts that incur no swap fees on overnight positions. Brokers compensate for the absence of interest rates by charging administrative fees and fixed commissions per position held overnight. Sharia-compliant accounts thus enable Muslim customers to engage in trading activities without compromising their religious beliefs.

Costs Associated with Islamic Accounts

Islamic accounts facilitate interest-free trading, but alternative charges are in place to compensate for the absence of swaps. Islamic accounts incur fixed administrative fees on positions held past the market’s daily closing time. In some cases, brokers may also widen their spreads slightly to accommodate the requirements of Islamic finance. In forex trading, the size of the administrative fees depends on trade volume and currency-pair tier (major, minor, etc).

There is usually a grace period of several business days before your overnight positions start incurring administrative fees. Many brokers adjust their administrative charges on certain days to compensate for the increased holding costs during weekends. Holding fees for overnight forex positions triple on Wednesdays, while those for indices triple on Fridays. To put it differently, Wednesday and Friday each count as three days, incurring trice as high administrative charges.

Traders go into additional expenses through the spreads, which represent the difference between ask and bid prices. Commissions per lot per side also apply in some cases. Muslim customers may be subject to monthly dormancy fees if their Islamic accounts remain inactive for one to twelve months, depending on the broker. Islamic traders generally benefit from fee-free deposits but withdrawals below a certain threshold may attract additional processing fees at some brokers. Currency conversion charges are also in place whenever traders transact in currencies other than their base account currency.

Market Restrictions with Islamic Accounts

While Islamic accounts offer roughly the same trading conditions as standard accounts, Muslim customers often have access to a more limited selection of tradable markets. Sharia-compliant brokers intentionally remove certain “haram” products from Islamic accounts to remain consistent with the principles of Islamic finance.

1. Bonds, Futures and Forward Contracts

   Customers usually cannot enter into forwards and futures contracts when trading via swap-free accounts. Such products are highly speculative, involve excessive risk, and there is no ownership of the underlying assets. Many Islamic scholars argue these traits are contrary to the principles of Sharia finance. The same goes for debt securities like conventional bonds as they involve profiting from interest and are, thus, largely unavailable to Muslim customers.

2. Exotic Currency Pairs

   Some brokers also impose restrictions on trading certain exotic pairs through Islamic accounts. Exotic currencies of developing economies are associated with steeper central bank interest rates. It would be unprofitable for brokers to offer such currency pairs to swap-free traders.

3. Spread Betting

   Spread betting is another impermissible activity according to Sharia law as it involves short-term speculation on future price movements without ownership of the underlying assets. The practice resembles gambling (maisir) to a great extent and involves excessive risk (gharar) because one party literally risks money on an uncertain outcome while hoping to profit at the other party’s expense.

Commodity Trading with Islamic Accounts

Engaging in commodity trading is a permissible activity (halal), provided that certain conditions are at hand. For example, trades involving hard commodities like silver or gold must be backed by physical precious metals to comply with Sharia principles. Transactions must occur on the spot with an immediate transfer of funds from buyer to seller or vice versa.

To elaborate further, Muslim traders authorize their brokers to purchase a specific amount of precious metals and deduct the corresponding sum from their available balance. As with forex trading, Sharia-compliant brokers cannot charge rollover fees on overnight commodity positions. Selling deferred commodities for deferred prices is impermissible in Islamic trading.

Criteria and Application Process for Opening Islamic Accounts

Some brokers restrict the availability of swap-free accounts to customers from countries with a predominantly Muslim population but not necessarily always so. Such is the case with our third pick, Pepperstone, where swap-free accounts are only available to clients from Morocco, Egypt, Algeria, Malaysia, Kuwait, Turkey, and Qatar, among several other regions. We recommend contacting customer support to inquire whether your chosen broker has country restrictions on Islamic accounts.

You must register a live trading account by filling in your personal and residential information in the form. The next step in the application process involves verifying your identity by submitting relevant documentation like photos of a government-issued document, utility bill, bank statement, and credit/debit card (front and back).

Once you confirm you are the person you claim to be, you should add funds to your balance. Only customers with verified and funded accounts are eligible for application in most cases. Applicants must also provide proof of faith if their identity documents do not expressly state their religious affiliation.

Most Sharia-compliant brokers request official letters from mosque leaders (imams) or other religious representatives as proof of faith. Otherwise, everyone would apply for Islamic accounts to reap the benefits of interest-free trading. Muslim customers should allow a couple of business days for the broker’s relevant department to assess their applications.

Pros and Cons of Trading with Islamic Accounts

Z. Stefanova