Among the many different Forex brokers and Forex trading accounts available to the Forex trader, there is one particular type of broker and trading account that stands out. An Islamic account, provided by an Islamic Forex broker is a very unique type of trading account that we do not find in other trading markets.
An Islamic Forex broker might offer its customer base the option of opening an Islamic Forex account, which is of course not limited to Muslims only. No Forex broker, not even an Islamic Forex broker can or will ask you your religion when trading Forex.
What an Forex Islamic account is in simple terms is an interest free, also known as a No Riba trading account. So how does this all work? For example, if a Forex trader decides to leave his or her trading positions open overnight, the standard broker will charge rollover fees, which are basically the interest the broker pays the bank to leave the trade open overnight.
The thing about these fees is that they are problematic for the Islamic community. According to the Islamic Shariah law, Muslims are forbidden to take any money in return for their “giving”. That means if a Muslim is investing in Forex, he/she is not allowed to pay or receive any type of interest on their payment. By the way, this is something that exists in the Jewish religion as well.
In order to meet the needs of the Islamic population and to enable them to trade Forex, the concept of an Forex Islamic account was invented. Anyone can open such an account in theory, but it might not be right for everyone. An Islamic Forex account is in fact interest-free but it often times comes with higher spreads or other down sides, all depending on the Islamic broker,
If you are a trader that leaves trades open overnight on a regular basis and regularly pay high rollover fees, an Islamic account might be the perfect solution for you. Once you decide to trade with an Forex Islamic account, the next step is choosing the best Islamic Forex broker for you. The most effective way to do that is to read Forex broker reviews by some of the Web’s leading sites, and simply filter out all brokers that do not have the option to trade with a Forex Islamic account.