How to choose a broker with an Islamic account?
Consider the following questions when searching for a suitable broker with an Islamic account.
Can I trust the broker?
Take into account the regulatory status of the broker. Forex brokers regulated by top-tier financial authorities must undergo audits, meet capital requirements, and provide segregated accounts and negative balance protection. A compensation fund is sometimes available in the event of broker insolvency.
Tip: you can search the regulator’s website to confirm the broker’s status and check for any disciplinary action. The broker’s size and operating history are also worth considering. You can usually find these on the company’s LinkedIn page.
Read more about Best regulated forex brokers.
Are the fees competitive?
Working with a broker that keeps spreads and commissions to a minimum can make the difference between profit and loss at the end of the day. This is a crucial point for day traders. Also, don’t be caught off guard by miscellaneous account-related fees, such as inactivity and withdrawal fees.
On Islamic accounts, financing fees vary by instrument. They are typically the least expensive for indices like the Dax 40 and major currency pairs like EUR/USD. Exotic currency pairs such as EUR/TRY and commodities like natural gas (XNG/USD) have the highest fees. It’s also important to note that some brokers only charge the Islamic financing fee on select instruments, leaving others free of both swap and financing fees.
Check out our guide on Best lowest spread forex brokers.
What account types are available?
A broad range of account types helps a broker cater to different trader profiles. For example, a simple STP account may be the best for beginners in the markets, while an ECN/raw spread account can help sophisticated, active traders keep their costs to a minimum.
ECN accounts typically route orders straight to the interbank market, while STP accounts send orders directly to a counterparty that might be another STP broker, market broker, or ECN broker. Via ECN accounts, spreads are tighter and the speed of order execution is faster, making them suitable for active, short-term traders. However, a commission is charged in addition to the spread.
Islamic traders should check if their preferred account type is available swap-free. In some instances, account types cannot be converted to Islamic.
Read more about Best STP forex brokers and Best ECN forex brokers.
How to choose a trading platform?
When choosing a trading platform, prioritize one that is intuitive and easy to navigate to ensure a smooth start in the trading world. Opt for platforms, typically browser-based, that are developed by the broker as they tend to be more user-friendly. Key features to look for include watchlists, trading from the chart, search functions, news feeds, and a customizable interface.
Here are our picks of Best forex trading platforms.
Platforms like MetaTrader 4 and 5 offer advanced features such as backtesting, automated trading, and a wide range of order types, although they might be less user-friendly. MetaTrader 4 is available in Arabic, making it well-suited to Islamic account holders.
Read more about Best MetaTrader 4 brokers and Best MetaTrader 5 brokers.
Is customer support reliable?
Having solid support on hand is essential. Check the hours of availability, for example, whether help is on hand 24/7 or only during business hours. Chat support is the most convenient, so look for an easy-to-access chat window built into the broker platform. In the case of a platform outage, it is also important to be able to contact support via phone.
What to avoid when choosing a broker with an Islamic account?
When selecting a broker offering an Islamic account, it is important to be conscious of the financing fees, when they are applied, and which instruments are charged. The most important thing to avoid is unreasonably high financing fees.
Some brokers apply the nightly financing fee immediately, while others offer a grace period with no charge for several nights. The fees charged vary by broker, so keep an eye on the cost, especially for exotic currencies and commodities, which can be very expensive to hold.
Also, pay attention to which instruments get charged a fee. Some brokers charge no swap or financing fee for most instruments, choosing to charge a financing fee for exotic currencies and commodities only. Meanwhile, other brokers charge a fee for all of them, including popular instruments such as EUR/USD.
How to avoid forex and CFD scams?
A common scam in the forex and CFD industry involves vendors offering a trading strategy that guarantees an outlandishly high return in little time. These may be based on automated trading using bots or a signal service where trades are shared via chat or social media. Nobody can guarantee returns with certainty, and it is more likely that such strategies will lose money. When assessing strategy or signal providers, you should look for a live track record audited by a third party and be conscious that past performance does not guarantee future results.
Traders should also be cautious about opening an account with an unregulated offshore broker. Such brokers may offer a straightforward account opening process, bonuses, and high leverage levels, but client funds are typically not protected. Meanwhile, brokers regulated by top-tier authorities must undergo regular audits and are held accountable for misconduct. Traders can also benefit from having their funds held in segregated accounts, negative balance protection, and a compensation fund in case of broker insolvency.
Our Methodology
In selecting top brokers for Islamic accounts, we applied our advanced proprietary methodology, focusing on the leaders from our extensive tests. Since 2010, FXEmpire has been at the forefront of evaluating CFD brokers, refining our process through hundreds of reviews and over 250 data points per broker.
We assess brokers across nine categories: Trust, Fees, Platforms and Tools, Tradable Instruments, Customer Service, Deposit and Withdrawal, Account Types, Research, and Education. Our reviews clarify complex aspects like regulatory status, ensuring an understanding of fund safety and guaranteed benefits.
Our evaluation involves live testing, research, questionnaires, and broker demonstrations. We open accounts, focusing on standard services and platforms, to test spreads, swap fees, and other costs. This side-by-side analysis offers insight into each broker’s competitiveness and platform usability.
For this guide, we chose brokers offering Islamic accounts, evaluating their financial strength, transparency, and cost-effectiveness. We tested fees, trading costs, and account types, including their conversion to Islamic accounts. We examined platform features, tradable CFD instruments, and customer support efficiency, ensuring diverse and easy deposit and withdrawal methods.
Lastly, we assessed the quality of each broker’s research and educational resources, aiming to aid traders in understanding the markets, developing strategies, and making informed decisions.
Meet Our Writers
The team of forex and CFD writers and editors at FX Empire is composed of trading industry professionals and seasoned financial journalists. Our writers have been published on leading financial websites such as Investopedia and Forbes. In addition, they all have extensive trading experience.