Swap Free Forex Account – Forex Islamic Account Halal Meaning

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The world today is much moved by the people in business. Making money is everyone’s goal. People across the globe are making money in both bad and good ways. The same case applies to banking institutions, although some exaggerate their interest charges. Within this article, we are going to look at the Islamic way of banking. Interestingly, Muslims have a unique way of banking their money, and they do it in line with their faith. Skipping interest might sound challenging to adhere to in the current world. That’s because bills are escalating every day and one needs to be financed to do even the basics.

Have you ever heard about a Swap-free forex account? In some regions, this account is also referred to as Forex Islamic Account Halal. It is an Islamic account that is meant for people who want to trade without paying or earning interest. That’s because the Islamic faith restricts them from acquiring or paying interest.

The Islamic finance law demands that no money should stay in the account for long. That is why transactions are conducted immediately after the money is received or sent. The money is transferred to other accounts. Fortunately, some banks allow Islamic traders to own a swap-free –forex account without discrimination. The swap-free account charges no interest regardless of the money it holds.

Why Do Muslims Believe That It Is Wrong To Charge Interest?

Swap Free Forex Account - Forex Islamic Account Halal Meaning

This is a common question among many people. According to the Quran, charging of interest is significantly prohibited. There is a severe eternal punishment for the offense. Anyone involved in witnessing, paying, or even stamping an interest charging activity is punishable. According to their faith, interest is a result of a bribe. They treat it as an incentive for the rich to bail out the poor. Additionally, Muslims term interest charging as an oppressive act to the poor. However, this faith has given its followers other alternatives. The alternatives enable them to trade without having to compromise their faith.

Characteristics of a Forex Islamic Account Halal

  • Interest-Free

As earlier mentioned, Islamic forex trading does not accrue any charges. It is Haram to do so, and therefore brokers are not allowed in any interest charging transactions within the accounts.

  • Immediate Transactions

This is done to avoid an accumulation of interest.

  • Profit and Risk Distribution

This is another principle of Islamic forex trading. It ensures that all the parties involved in the transaction share both in risk and benefits. This principle dramatically helps the partners to be more cautious, especially on the risks involved.

  • Prevention of Gambling

The account is excellent in dealing with gambling. That’s because accruing wealth through gambling is Haram, and such accounts should deal with clean transactions.

How to Open an Islamic Forex Account

The first step in opening an Islamic account is to register with best Islamic forex broker and have a MetaTrader account. This a platform preferred by traders dealing with multi –assets. Luckily, opening this account is not an uphill task, and one can do it on the phone. After getting your metatrader account, you can now proceed and open your halal trading account. This is done by providing all the necessary documents that carry your identification details. One can start using the account by making deposits using any method. On the other hand, if you want to withdraw, you will make a request and get your money.

Forex Brokers that Offer Islamic Account (Swap-Free)

BrokerInfoBonusOpen Account
OCTAFX forex broker Min Deposit: $5
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Leverage: 500:1
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Spread: Fixed Spread From 3 Pips
Leverage: Up to 1:1000
Regulation: CBR, CySEC and FFMS
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Spread: Starting 0 Pips
Leverage: 500:1
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Spread: From 3 Pips
Leverage: 400:1
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Benefits of An Islamic Forex Account

There are three benefits of this account that traders enjoy. One is that there is a sharing of both loss and profits. For example, if the parties were doing a $1,000,000 transaction and they go into losses, then the loss shall be shared among them. This is regardless of whether it was one person who caused the loss. The same case applies to profit. This benefit is found in the Mudabarah agreement, which states that everything is equally shared in this account.

Another benefit is that traders are allowed to trade for a long time without paying any accumulated interest. This dramatically prevents traders from overspending. The last and best benefit is that traders can enjoy doing transactions without going against their faith. Naturally, anything that has a good side has a bad side as well. The disadvantage of this account is that it attracts a great commission as an alternative for overnight interest. Moreover, the account demands massive deposits; hence it might not accommodate everyone.

How to Choose an Islamic Forex Account

Before indulging in Islamic forex trading, it is wise to consider what is required of you. Here are some of the things that can help you choose the right Islamic forex account.

Terms and conditions

Most engagements involved in Islamic forex trading have terms and conditions. That is why it is essential to understand all terms and conditions. This helps you in making a well-informed decision that will not cause regrets. Islamic forex brokers have their terms and conditions, and reading them will help you safeguard your trading cost.

No-Interest Period

Some Islamic forex trading brokers will give you a certain period before starting to charge interest. If you exceed that set time frame, you will be forced to pay the interest. The interest period is a factor that needs to be considered when choosing an Islamic forex account.

Regulations

Every trader needs to understand the regulations in the forex account. The purpose of the regulations is to give guidance, restrictions, and instructions on managing accounts. The regulations set by forex brokers will safeguard you from fraudulent activities and loss of funds.

Conclusion

Times have changed, and banks are broadening their maps to accommodate more investors. Knowing your money is safe is good, but not having to pay for an extra cost for it is much better. The introduction of the Islamic forex account has come in handy for many people. That’s because the interest rates have continued to surge, making it difficult for individuals to access finances.

This account has enabled many people to grow economically and maintain their Islamic faith at the same time. The account allows three types of Islamic forex trading. They include scalping, day, and swing trading. In the Islamic faith, the account you choose can be either Halal or Haram, which means good or bad. Islamic forex trading is referred to as Halal because it goes in line with the Islamic faith.

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