There is one type of Forex broker that stands out among the other Forex traders and Forex accounts. A Forex Islamic broker offers a unique trading account. More info?
A Forex broker that is Islamic might allow its customers to open an Islamic Forex trading account. This option, however, does not limit the customer base only to Muslims. Forex brokers, including Islamic Forex brokers, will never ask about your religious beliefs when you trade Forex.
In simple words, a Forex Islamic Account is a No Riba Trading account. How does it all work? If a Forex trader leaves his/her trading position open over night, the typical broker may charge rollover charges, which is basically interest that the broker pays to the bank for leaving the trades open.
These fees are a problem for the Islamic Community. In accordance with Islamic Shariah, Muslims cannot accept money as a reward for “giving”. If a Muslim invests in Forex, they are not permitted to receive or pay any interest. This is also true for the Jewish faith.
Forex Islamic accounts were created to cater to the Islamic community and allow them to trade Forex. Theoretically, anyone can open an Islamic Forex account. However, it may not be suitable for all. The Islamic Forex account does not charge interest, but the spreads are often higher or there is other downside depending on which broker you choose.
An Islamic account may be the best solution for traders who leave trades overnight and pay high fees to roll over their trades. The next step after deciding to use an Islamic Forex account is selecting the right Islamic Forex broker. You can do this by reading Forex broker reviews on some of the most popular websites and filtering out brokers who do not offer the Forex Islamic trading account.