Swap-Free

Swap-free accounts are also known as Islamic trading accounts or No-Riba Forex trading accounts. These accounts are specially designed for Muslim traders who follow the stringent rules of Islamic finances set by Shariah law and cannot pay or receive any kind of interest. The main motive of this account is to give Muslim traders the freedom to trade without any worries about the money being haram.

In the article we will further discuss Swap-free Islamic accounts and why they are important.

How Are Regular And Swap-free Islamic Accounts Different?

Swap-free accounts have unique characteristics to regular accounts. There is no interest, payment for overnight open positions, or any sort of hidden fee. Swap-free accounts allow the traders to maintain the position for as long as they like without having to worry about overnight fees. Traders only have to pay the fixed spreads to the broker in return for their service. Whereas, in a regular account, traders of every religious belief must pay interests and swaps. The longer your positions are open, the higher the rollover fee you must pay the broker.

Islam and Forex Trading

Every Muslim has to follow a lot of regulations and customs whether in business, trading or in general life. Among the rules set by Shariah law, there are several rules for trading as well. Like one cannot gamble, interest should neither be given nor be taken, there must be no riba, etc. Nonetheless, a lot of people consider forex trading to be forbidden, which is not true. If you trade forex for financial gain without expecting a quick profit, such as while gambling, it is entirely permissible. In fact, any trading activity done by a trader to earn money while following the Sharia laws is considered halal money.

In a swap-free Islamic account, there are no swaps or rollover fees for opening positions overnight or longer. Thus, these accounts are excellent for Muslim traders as they can get involved in trading and earn halal money. As there are no interests in the swap-free accounts hence, Muslim traders have to pay commission, margin, and administrative costs that are not Riba or Haram trading costs.

Conclusion

Overall, the facilities and accessibility of a regular brokerage account are greater, but because swaps are involved, this account is not the greatest option for Muslim traders. Islamic accounts are an alternative since they uphold sharia law and offer suitable trading circumstances to Muslim traders. But, your financial goals and commitment to preserving moral standards will ultimately determine whether or not you use an Islamic forex account. Furthermore, to be successful in trading, apart from trading accounts and platforms, knowledge is equally important. Spend some time figuring out your investment goals before thinking about trading in the forex market. Be very clear about your objectives as it assists to meet your financial requirements. Additionally, you must conduct your own investigation to pick the best broker for opening swap-free accounts.