What is the best Islamic Forex account? Presented by Traders Union
Islamic Forex accounts, also known as swap-free accounts, are designed to comply with Islamic principles by prohibiting the charging or accumulation of interest rates in Forex trading.
Traders Union explores the idea of having an Islamic Forex account and how they enable Muslim traders to participate in Forex trading while adhering to Islamic financial principles.
What is an Islamic Forex account?
TU explains that an Islamic trading account is a swap-free account that complies with Islamic rulings on Forex trading. This type of account prohibits the accumulation and payment of interest rates and eliminates the possibility of earning profits during a swap. Islamic accounts also ensure that transactions are executed without delay and eliminate future and forward transactions by trading currencies in the same setting as the contract.
What Islamic authorities say about having an Islamic Forex account
Traders Union acknowledges that Islamic authorities generally permit Forex trading with certain conditions, including abiding by Islamic rulings and conducting hand-to-hand exchanges when currencies differ. Delayed or non-same sitting transactions are considered riba-based and not permissible. As a solution, Traders Union suggests using Islamic Forex accounts, also known as swap-free accounts, which comply with Islamic principles by prohibiting the charging or accumulation of interest rates.
The legality of Forex trading in Muslim countries
TU lists Muslim countries where Forex trading is illegal or restricted due to Sharia law. These countries include Afghanistan, Iran, Pakistan, Iraq, Malaysia, Maldives, Mauritania, Qatar, Yemen, UAE, Sudan, Egypt, Nigeria, and Saudi Arabia.
A Guide to halal investments in various markets
Traders Union provides three tips for Muslims to avoid haram transactions in trading:
- Choose an Islamic account
- Avoid making trading a gamble
- Pay taxes and follow regulations
In regards to other investment and trade markets:
- Halal stocks and funds that comply with Sharia law are acceptable for investment in the stock market
- Investing in stocks used to support unlawful businesses is forbidden
- Islamic brokers do not charge overnight interest rates from Muslim clients in CFD trading
- Removing leverage makes CFD trading halal and appropriate for Muslims
Following these guidelines, Muslims can engage in investment and trading activities while adhering to their religious beliefs. Traders Union recognizes the importance of providing information on halal investments to the Muslim community.
Top three Islamic accounts for 2023
Below are the full three Islamic swap-free accounts available for Muslim clients.
XM Islamic account
XM Group is a regulated online broker with over 1.5 million clients from 196 countries. This platform offers a minimum spread of 0.1 pip and over 1000 financial instruments, including Forex and CFDs. Unlike other brokers, XM Group has no hidden fees or commission policy and does not widen its spreads.
AvaTrade Islamic account
The review 2023 states that, AvaTrade, a reputable market maker, offers over 250 financial instruments with no swap fee for Muslim clients. The broker is regulated and authorized by multiple authorities. Transactions are settled immediately, adhering to Sharia law. However, additional costs from other brokers may apply.
eToro Islamic account
With over 2,000 trading instruments and a copy trading service, eToro is one of the world’s largest brokers, established in 2007. Islamic account is available for traders worldwide with no special conditions, and positions are reopened daily at 5:00 pm New York time.
In conclusion, an Islamic Forex account can be beneficial as they are designed explicitly for Muslim traders who want to comply with Sharia law by avoiding interest rates. By choosing a broker that provides Islamic accounts, Muslim traders can participate in Forex trading while remaining true to their religious beliefs.