List of the brokers with the best Shariah compliant trading account

There are many specific features that the traders are looking for in the Forex brokers. Some may be attracted to the best educational brokers, whereas others will seek the ones with the most promotional campaigns. A group of traders might focus on the leverages and spreads that the broker offers, while another group would be interested in the trading platforms of the broker. While all of these features represent crucial aspects in trading Forex, there are some essential rules that certain traders need to comply with and therefore, they are expecting some of the best brokers to provide the appropriate environment.

The number of Muslim traders in the Forex market is increasing day by day. However, they cannot be perceived as common and standard clients of the broker. They have special requirements that should be necessarily addressed by every broker that wants to incorporate Muslim traders within their customer base. Islamic trading essentially needs to be Shariah-compliant. But, for numerous reasons, the regular trading accounts that all Forex brokers provide are not in compliance with the Shariah law. This is why more and more brokers are introducing Islamic Forex trading accounts to the traders of the Muslim faith.

Islamic trading accounts come with designated features and an exclusive trading environment. Even though it basically mimics the regular trading accounts and can vary from basic or micro account types to premium and VIP types, they have distinguishing characteristics which should be examined in-depth by every trader interested in Islamic accounts. The guide below explores the general Shariah-compliant trading environment along with the Shariah-compliant brokers and the dedicated Islamic accounts.

What are the best Forex brokers for Islamic trading

No matter how popular a broker is on the Forex market, if it does not provide an Islamic account option that is already a huge disadvantage and Muslim traders should avoid the broker at all costs. Fortunately, most of the leading brokerage firms focus on Muslim traders and support their needs and requirements. They also deliver exceptional brokerage services along with competitive trading conditions and ground-breaking shariah-compliant trading platforms. They strictly follow the rules established by the Shariah law and assist their Muslim traders to receive the best trading experience. Below is the list of the top brokers in the Forex industry providing Islamic accounts:

XM

Min. Depo

Licences

FCA, CySEC, IFSC, ASIC, DFSA

Leverage

1:888

1:200

Platforms

MT4, WebTrader, Copykat

Global GT

Min. Depo

Licences

FSA, FSCA

Leverage

1:1000

Platforms

MT5,

Plus500

Min. Depo

$100

Licences

FCA, ASIC, CySEC, FSCA, FMA, MAS

Leverage

1:30

Platforms

WebTrader, Windows 10 Trader

What is Islamic Forex account?

Islamic Forex account is an exclusive Forex trading account type that can be found with most of the leading brokerage companies. Islamic accounts come in different forms and standards. However, usually, all of them share the same legal framework in terms of compliance with the Shariah laws. In general, all the real trading account types are charged with various costs by the broker. But in this case, we are interested in a particular cost type – rollover fees. To break down the costs of trading Forex with the brokers we have to consider roughly two types of traders and see why none of these can fit the requirements of the Islamic trading rules.

A very famous trading strategy, day trading, involves same-day trading. Meaning that the clients open and close their trading positions in a very short time span, it should occur on the same trading day. In this way, traders do not leave their positions open for more than 24 hours and are free from any charges that usually apply to overnight positions (will be explained in the following paragraph). However, due to the extreme volatility of the markets and price fluctuations, it is actually almost impossible to predict the market movement within 24 hours. Therefore, day trading becomes a lot like gambling. Since gambling is also inappropriate within Shariah law, Muslim traders usually avoid this kind of trading strategy.

If you are not a day trader, you leave your trading positions open overnight, so more than 24 hours. In this case, all brokers charge rollover fees, or swap fees as they are often called. These swap fees serve as interest rates payable by the traders to brokers. The receipt or payment of the interest rate is unacceptable by Shariah law. Therefore, Muslim traders should not be paying for swaps. The Islamic accounts are the accounts that are exempt from swap fees and basically all kinds of interest rates. Instead, these costs are included in the commission rates charged by the broker for their services which makes trading on Islamic accounts Shariah-compliant.

What are the features of Islamic Forex accounts?

Islamic accounts for Forex trading resemble the regular trading account types. However, the primary difference lies in the absence of the swap fees or charges on overnight positions. In most cases, the brokers will allow traders to open any trading account type (with a few exceptions) and afterward apply the Islamic account option to chosen registered live trading account type. The trading conditions that the specific account type offers, such as leverage, margin requirements, spreads, commissions, available trading assets and etc. remain the same. Only rollover costs will be removed from the account type and they might be added to commissions, spreads, or in the form of additional administrative costs.

Usually, brokers allow traders with Islamic accounts to start trading with a low minimum deposit requirement. The average deposit requirement with the Shariah-compliant Forex brokers can start at 5-10 US dollars and go up to 100 USD or 250 US dollars, depending on the account type. For the standard account type with an Islamic account option, anything above the 250 USD deposit requirement is unreasonable and you should avoid the broker. Higher deposit requirements might apply to premium and professional account types with Islamic account options.

Mostly, the trading platforms provided by the brokers for Islamic accounts will be similar to those on other account types. However, traders should pay attention to several things. The trading platform, software, or terminal should be convenient, easily accessible (preferably from the web or mobile apps, as well), and should have a seamless execution of the traders, usually in seconds or even milliseconds.