By Jeffrey Cammack Author Information Updated: July 2, 2020

Islamic Forex accounts keep traders in compliance with the principles of Islamic law (Shari’ah), where any interest paid on all loans of money (or Riba) is prohibited. While a regular Forex account has interest payments, an Islamic account type will remove any interest, either earned or paid, from your trading activities and thus keep all trades Shari’ah complaint.

Islamic accounts, also called swap-free accounts, are a relatively common occurrence. To find the best Islamic forex account, look for a broker with the best trading conditions, support for the trading platform of your choice, and a combination of market analysis and educational material that suits where you are in your trading career.

These are the best Forex brokers with Islamic accounts from leading international Forex brokers in 2020.

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  • Broker
    FXTM

    FXTM  - Best Islamic Broker

    REGULATED BY
    CySEC CySEC
    FCA FCA
    FSC FSC
    Trading Desk Type
    Trading Conditions
    1110.50
    Minimum Deposit
    USD 10
    Customer Support
    • Website Language: English
    • Support Language: English
    Trading Platforms

    FXTM is an award-winning ECN/STP broker popular with beginner traders and experienced traders alike. Its popularity is due to the very wide range of accounts types, from instant execution accounts with very low minimum deposits to ultra-low spread ECN accounts - MT4 is supported across all account types and MT5 is available on the ECN accounts. An Islamic option is available for all account types but only on the MT4 platform.

    With recognition from the FCA and CySec, excellent training material, and 24/7 customer support, FXTM is a great broker for all traders.

    Pros

    • Good for beginners
    • Excellent education
    • Well regulated
    • Low minimum deposit

    Cons

    • Expensive withdrawals
    AccountSpread FromCommissionExecutionMin. Deposit
    Cent Account1.5 pipsNoneInstantUSD 10 Account Details
    Standard Account1.3 pipsNoneInstantUSD 100 Account Details
    ECN Zero Account1.5 pipsNoneMarketUSD 200 Account Details
    ECN Account0.1 pips$2.00MarketUSD 500 Account Details
    FXTM Pro Account0.0 pipsNoneMarketUSD 25000 Account Details
  • Broker
    Tickmill

    Tickmill  - Best Trading Conditions

    REGULATED BY
    CySEC CySEC
    FCA FCA
    FSA-Seychelles FSA-Seychelles
    Trading Desk Type
    Trading Conditions
    11111
    Minimum Deposit
    USD 100
    Customer Support
    • Website Language: English
    • Support Language: English
    Trading Platforms

    Tickmill offers very low spreads and commission, a 30 USD welcome bonus for all new traders, fast market execution on the MT4 platform and has an excellent reputation in the industry.

    All accounts can be converted to Islamic accounts and all clients have access to free AutoChartist and Copy Trading (via Myfxbook) - great tools for traders of all experience levels. A regular winner of trade execution and trading conditions awards, Tickmill has the reputation, and the performance, traders should look for in a broker.

    Pros

    • Tight spreads
    • Well regulated
    • Fast and free withdrawals
    • Wide range of assets

    Cons

    • MT4 only
    AccountSpread FromCommissionExecutionMin. Deposit
    Classic1.6 pipsNoneMarketUSD 100 Account Details
    Pro0.0 pipsVariableMarketUSD 100 Account Details
    VIP0.0 pipsVariableMarketUSD 50000 Account Details
  • Broker
    OctaFX

    OctaFX  - Best Trading Platforms

    REGULATED BY
    CySEC CySEC
    Trading Desk Type
    Trading Conditions
    11110
    Minimum Deposit
    USD 50
    Customer Support
    • Website Language: English
    • Support Language: English
    Trading Platforms

    OctaFX is a client-focused, international broker with a loyal following of Malaysian traders. The website is fully translated into Bahasa Melayu and OctaFX are always running competitions and promotions for Malaysian clients; these include a 50% first deposit bonus, demo trading contests with cash prizes and frequent lottery giveaways (prizes include scooters, laptops and other gadgets).

    An Islamic option is available for all account types and new traders will like the excellent analytical section and range of useful trading tools such as AutoChartist, copy trading and an account monitoring service that lets beginners learn anonymously from successful traders. Trader education for beginners is well-presented and platform support is almost unbeatable, with MT4, MT5 and cTrader all offered.

    Pros

    • Great platform choice
    • Fast and free withdrawals
    • Copy trading accounts

    Cons

    • Limited education
    • Restrictive account types
    AccountSpread FromCommissionExecutionMin. Deposit
    cTrader ECN0.0 pips$3.00MarketUSD 100 Account Details
    MT4 Micro0.4 pipsNoneMarketUSD 100 Account Details
    MT5 Pro0.2 pipsNoneMarketUSD 500 Account Details
  • Broker
    XM

    XM  - Most Trusted Broker

    REGULATED BY
    CySEC CySEC
    ASIC ASIC
    IFSC IFSC
    Trading Desk Type
    Trading Conditions
    11110.5
    Minimum Deposit
    USD 5
    Customer Support
    • Website Language: English
    • Support Language: English
    Trading Platforms

    XM Group (XM) is a full dealing desk broker which offers floating spreads and suits all kinds of traders.  XM offers swap-free Islamic accounts as well as a variety of other account types to suit traders.  It is a perfect broker for scalpers, intraday traders as well as long-term traders because of the tight spreads, fast execution times and good analysis software.  XM has a low minimum deposit making this broker accessible for traders just starting out.

    Pros

    • Well regulated
    • Excellent education
    • Wide range of assets
    • Fast and free withdrawals

    Cons

    • Dealing desk
    AccountSpread FromCommissionExecutionMin. Deposit
    Micro1.0 pipsNoneInstantUSD 5 Account Details
    Standard1.0 pipsNoneInstantUSD 5 Account Details
    XM Ultra Low0.6 pipsNoneInstantUSD 50 Account Details
    XM Zero0.6 pips$7.00InstantUSD 100 Account Details
  • Broker
    HotForex

    HotForex  - Best Education

    REGULATED BY
    CySEC CySEC
    FCA FCA
    FSCA FSCA
    DFSA DFSA
    FSC FSC
    Trading Desk Type
    Trading Conditions
    11110.5
    Minimum Deposit
    USD 5
    Customer Support
    • Website Language: English
    • Support Language: English
    Trading Platforms

    HotForex is an award-winning, global broker and has a reputation for client satisfaction. 

    Trading conditions are varied across four account types, but spreads are generally tight (and are often zero pips on the market execution account). All accounts are also available as Islamic accounts, and HotForex also offers copy-trading and managed accounts.  All clients have a dedicated account manager, and deposits and withdrawals are free no matter the funding method.

    HotForex has managed to attract a broad-based global clientele by offering multiple language capabilities and has a dedicated Malaysian team.

    Pros

    • Low minimum deposit
    • Tight spreads
    • Well regulated
    • Good range of accounts

    Cons

    • Limited base currencies
    AccountSpread FromCommissionExecutionMin. Deposit
    Micro1.0 pipsNoneMarketUSD 5 Account Details
    Islamic1.0 pipsNoneMarketUSD 100 Account Details
    Premium1.0 pipsNoneMarketUSD 100 Account Details
    Auto1.0 pipsNoneMarketUSD 200 Account Details
    Zero0.0 pips$3.00MarketUSD 200 Account Details
    HFCopy1.0 pipsNoneMarketUSD 300 Account Details
    Premium Pro1.0 pipsNoneMarketUSD 5000 Account Details
  • Broker
    Plus500

    Plus500  - Best Research

    REGULATED BY
    FCA FCA
    CySEC CySEC
    ASIC ASIC
    MAS MAS
    Trading Desk Type
    Trading Conditions
    11100
    Minimum Deposit
    USD 100
    Customer Support
    • Website Language: English
    • Support Language: English
    Trading Platforms
    • Plus500

    With 50+ Forex pairs available, tight spreads and fast execution, Plus500 is a popular CFD provider with both its new and long-standing customers. Award-winning customer service is available 24/7 and the Plus500 platform is web-based with no need for any downloads or setup, making this a good provider for those who want to keep it simple.

    Plus500 has a single account with a 100 USD minimum deposit requirement and keeps simplicity at the core of its business.

     

    Pros

    • Well regulated
    • Wide range of assets

    Cons

    • Limited education
    • Limited account options
    AccountSpread FromCommissionExecutionMin. Deposit
    Standard0.7 pipsNoneInstantUSD 100 Account Details
  • Broker
    Pepperstone

    Pepperstone  - Best Research

    REGULATED BY
    FCA FCA
    ASIC ASIC
    DFSA DFSA
    Trading Desk Type
    Trading Conditions
    11110.5
    Minimum Deposit
    USD 200
    Customer Support
    • Website Language: English
    • Support Language: English
    Trading Platforms

    Founded in 2010, Pepperstone is an Australian ECN broker known for tight spreads, fast trade execution and broad trading platform support. As our highest rated pure ECN broker, if you want to pay a small commission for tighter spreads, you won't find much better than Pepperstone.

    Pepperstone's award-winning 24-hour support provides the foundation for its excellent customer service, where personalised assistance is available via a number of methods. It won the fastest-growing company award (2014) in Australia, from BRW Magazine and in the same year, emerged as the winner of the Governor of Victoria Export Awards cementing its reputation as a serious contender in the industry.

    Pros

    • Well regulated
    • Tight spreads
    • Great platform choice
    • Wide range of assets

    Cons

    • High minimum deposit
    • Limited market analysis
    AccountSpread FromCommissionExecutionMin. Deposit
    Razor0.0 pipsAUD$ 7ECNUSD 200 Account Details
    Standard1.0 pipsNoneECNUSD 200 Account Details
    Swap-free1.0 pipsNoneECNUSD 200 Account Details
  • Broker
    REGULATED BY
    CySEC CySEC
    FCA FCA
    ASIC ASIC
    Trading Desk Type
    Trading Conditions
    11000
    Minimum Deposit
    USD 200
    Customer Support
    • Website Language: English
    • Support Language: English
    Trading Platforms
    • etoro

    eToro pioneered social trading in 2012 and has been widely recognised for making the social trading experience as smooth and engaging as possible. eToro has since grown to become one of the largest Forex brokers in the world, and its success has made it clear that many traders view an active and helpful community as an essential part of their trading strategy.

    eToro's trading model is quite different from most other brokers and may take some time to get accustomed to, but if you are looking for a fun and simple social trading experience, then eToro is the best.

    Pros

    • Well regulated
    • Good for beginners
    • Innovative trading tools

    Cons

    • Limited education
    • Wide spreads
    AccountSpread FromCommissionExecutionMin. Deposit
    Professional1.0 pipsNoneMarketEUR 200 Account Details
    Standard1.0 pipsNoneMarketUSD 200 Account Details
  • REGULATED BY
    FCA FCA
    ASIC ASIC
    FSCA FSCA
    Trading Desk Type
    Trading Conditions
    11110.5
    Minimum Deposit
    USD 250
    Customer Support
    • Website Language: English
    • Support Language: English
    Trading Platforms

    The world's number one broker, and our highest-ranked broker, IG Markets have a very impressive product offering. A market-maker broker, IG Markets only offers the single account for Forex trading (also available as an Islamic account), but spreads are tight and educational and analytical materials are excellent. A wide choice of platform - including MT4 - is also available and customer service is world-class. 

    With regulation from the FCA and ASIC, and winner of the Broker of the Year 2018 (UK Forex Awards) and Best CFD Provider 2017 (Investment and Wealth Management Awards), IG Markets is an easy choice for both beginner and experienced traders.

    Pros

    • Well regulated
    • Tight spreads
    • Great platform choice
    • Excellent education
    • Excellent market analysis

    Cons

    • High minimum deposit
    AccountSpread FromCommissionExecutionMin. Deposit
    Live Account0.6 pipsNoneInstantUSD 250 Account Details
    Spread Betting0.6 pipsNoneInstantUSD 250 Account Details
  • Broker
    REGULATED BY
    FCA FCA
    CySEC CySEC
    FSCA FSCA
    DFSA DFSA
    SCB SCB
    Trading Desk Type
    Trading Conditions
    11110.5
    Minimum Deposit
    USD 100
    Customer Support
    • Website Language: English
    • Support Language: English
    Trading Platforms

    FXPro is one of the largest and most trusted brokers in the industry and, as such, are an excellent choice for new traders. Education for beginners is best-in-class and all three account types are available as Islamic accounts.

    With MT4, MT5, cTrader and a browser-based platform, a reasonable 100 USD opening deposit and outstanding customer service, FxPro offer competitive spreads to match profitability with security. 

    Pros

    • Well regulated
    • Great platform choice
    • Tight spreads

    Cons

    • Limited education
    AccountSpread FromCommissionExecutionMin. Deposit
    FxPro cTrader0.45 pips$4.50MarketUSD 100 Account Details
    FxPro MT41.2 pipsNoneMarketUSD 100 Account Details
    FxPro MT51.52 pipsNoneMarketUSD 100 Account Details
    Islamic1.2 pipsVariableMarketUSD 100 Account Details
  • Broker
    AvaTrade

    AvaTrade  - Best Research

    REGULATED BY
    ASIC ASIC
    FSCA FSCA
    B.V.I FSC B.V.I FSC
    FSA FSA
    Trading Desk Type
    Trading Conditions
    11111
    Minimum Deposit
    USD 100
    Customer Support
    • Website Language: English
    • Support Language: English
    Trading Platforms

    Good value, beginner-friendly and hugely respected all over the world, AvaTrade is one of the most reputable brokers in the industry. With support for the leading trading platforms, great trading conditions on Islamic accounts and top-quality multilingual support, AvaTrade has built a brand on a solid reputation and continues to please its many new and existing customers.  

    AvaTrade offers trading in Forex, commodities, cryptocurrencies, exchange-traded funds, options, bonds, and equities and is a good choice for any type of forex trader ranging from beginners to scalpers and intraday traders to long-term traders.

    Pros

    • Good for beginners
    • Well regulated
    • Low minimum deposit

    Cons

    • Dealing desk
    • Limited education
    AccountSpread FromCommissionExecutionMin. Deposit
    Islamic1.2 pipsNoneInstantUSD 100 Account Details
    Professional0.9 pipsNoneInstantUSD 100 Account Details
    Retail0.9 pipsNoneInstantUSD 100 Account Details
  • REGULATED BY
    CySEC CySEC
    ASIC ASIC
    Trading Desk Type
    Trading Conditions
    11110.5
    Minimum Deposit
    USD 200
    Customer Support
    • Website Language: English
    • Support Language: English
    Trading Platforms

    IC Markets is one of the few ECN brokers that is truly good for beginner traders; trader education and customer service are both top-notch and with free access to Trading Central - an excellent third-party analytics provider - new traders will feel very welcome indeed. IC Markets runs frequent bonus schemes, some especially for Islamic traders, with commission-free trading on Islamic accounts during Ramadan. 

    IC Markets also offers support for all three leading trading platforms so experienced traders looking for a good ECN broker with the best trading conditions and fast execution should be tempted too.

    Pros

    • Well regulated
    • Tight spreads
    • Wide range of assets
    • Great platform choice

    Cons

    • High minimum deposit
    • Limited market analysis
    AccountSpread FromCommissionExecutionMin. Deposit
    RAW - cTrader0.0 pips$3.00MarketUSD 200 Account Details
    RAW - MetaTrader0.0 pips$3.50MarketUSD 200 Account Details
    Standard - MetaTrader1.0 pipsNoneMarketUSD 200 Account Details

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Open

Islamic Finance in Malaysia

Malaysia is widely regarded as a pioneer of the Islamic financial system and the Islamic interbank market, but it is only relatively recently that Islamic banking truly emerged in Malaysia. For decades, conventional banks were the only way to access the banking system.

In 1983 Bank Negara Malaysia (BNM) launched Bank Islam Malaysia Bhd (BIMB) to handle the financial needs of the country’s Muslim population.

But it wasn’t until 1993, when the Ministry of Finance introduced the Skim Perbankan Tanpa Faedah SPTF or the Interest-Free Banking Scheme, that Islamic banking became widely available as a consumer product.

The Interest-Free Banking Scheme made it a legal obligation for all conventional banks to offer Islamic banking options alongside more traditional methods. Banks quickly developed Shari’ah-compliant subsidiaries to handle the huge demand for Islamic banking and by 1994 the BNM had approved a total of 21 Islamic financial products for domestic financial institutions.

This rapid increase in both the supply of and demand for Islamic banking products was simultaneous with the development of the Islamic interbank system, which only further boosted growth of the Islamic money market. This explosive growth is visible in the increase of total assets of the Islamic banking sector from MYR21.6 billion in 1998 to MYR35.7 billion in 1999, an incredible growth rate of 65.8%.

Today, the nation is in the curious state of having two parallel banking systems, one conventional and the other Islamic, but both well developed and hugely profitable.

Foreign Exchange Trading in Malaysia

The key article of Islamic Mua’malat on Forex is the elimination of Riba – or interest on loans or assets.

Riba is central to conventional Forex trading, but some scholars believe that Islamic Forex transactions are not premised on the same philosophy as conventional practices, and are therefore legitimate under Shariʻah.

Islam also emphasises that when conducting business transactions, elements of uncertainty, excessive speculation and gambling should also be avoided, so it could be argued that hedging trades with Forex is also legitimate under Shari’ah. It is also widely agreed that conventional Forex transactions, if used carefully, are a very effective means of protecting banks from exposure to international risk.

In Malaysia, several brokers offer Shari’ah compliant accounts to make sure that your trading is not haram – though this does mean that there are a few differences when compared to traditional Forex accounts.

Islamic Forex Accounts Explained

Islamic Forex accounts have two underlying attributes:

Other than the above, Islamic Forex accounts usually have the same trading terms and conditions as a regular Forex account. However, some most Forex brokers change the commercial terms of trading with them and might limit the trader from trading cryptocurrencies. 

Some Forex brokers will widen their spreads on Islamic accounts to compensate for the missed revenue that would have otherwise have been generated by collecting interest. Another practice, but is far rarer, is that some Forex brokers charge an up-front commission on trades instead of widening the spreads.

Forex Brokers Offering Islamic Swap-free Accounts

There are a variety of brokers that offer Islamic accounts tailored for Muslim traders. There are usually no limitations on this account type – this means you can trade Forex, commodities, CFDs contracts and every financial instrument that complies with the Islamic financial regulations.

An important note:  With some Forex brokers, you will need to open a real trading account which can then be converted into an Islamic account.  Very few brokers have a registration page specifically for Islamic accounts, but many brokers taking clients from predominantly Muslim countries automatically create accounts as Islamic accounts.

If you are in doubt, do not make any deposits before discussing with your account manager.

Forex Rollovers & Swap Rates Explained

In the Forex market, any position held overnight generates a rollover which will be earned or paid out depending on the currency you are trading and the direction of the market. Rollover interest is a form of interest that can be credited or debited from your Forex trading account, and thus it is prohibited by Islamic financial regulations.  In the financial world, this rollover is also known as the swap rate.  So, Islamic Forex accounts are swap-free accounts where no overnight interest is credited or debited.

Islamic Financial Regulatory Bodies

The central financial regulatory bodies in the Islamic world are the following:

Forex brokers that are registered in Muslim majority countries often have to comply with many local regulations and are required to follow the Sharia law, whereas Western Forex brokers have much more flexibility when it comes to the interest charged to their clients.  This is why only some of the brokers offer this account type.

Summary

An Islamic Forex, or swap-free, account is an optional account type that is often selected after signing up with a broker.  They are intended for use by traders of the Islamic faith, which prohibits generating income from interest payments.  A majority of Forex brokers can accommodate followers of the Islamic faith by offering swap-free trading accounts that are compliant with Sharia law.

Forex Risk Disclaimer

Trading Forex and CFDs is not suitable for all investors as it carries a high degree of risk to your capital: 75-90% of retail investors lose money trading these products. 

Forex and CFD transactions involve high risk due to the following factors: Over-leveraging, unpredictable market volatility, slippage arising from a lack of liquidity, inadequate trading knowledge or experience, and a lack of regulatory protection for clients.

Traders should not deposit any money that is not disposable. Regardless of how much research you have done, or how confident you are in your trade, there is always a substantial risk of loss. (Learn more from the FCA or from ASIC)

Our Methodology

Our State of the Market Report and Broker Directory are the result of extensive research on over 100 Forex brokers. The explicit goal of these resources is to help traders find the best Malaysian Forex brokers – and steer them away from the worst ones – with the benefit of accurate and up-to-date information.

With over 150 data points on each broker and over 3000 hours of research and review writing, we believe we have succeeded in our goal. 

In a world where trading conditions and customer support can vary based on where you live, our broker reviews focus on the local trader and give you information about these brokers from a Malaysian perspective.

All research has been conducted by our in-house team of researchers and writers, gathering information from various company representatives, websites and by sifting through the fine print. Learn more about how we rank brokers

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Trading Forex and CFDs is not suitable for all investors and comes with a high risk of losing money rapidly due to leverage. 75-90% of retail investors lose money trading these products. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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