Best Islamic Broker UK – Top Islamic Trading Account Revealed
Not long ago, Muslim traders faced a dilemma: most forex and CFD trading accounts involve overnight swap fees, but the Sharia law that governs Islamic behavior prohibited these types of charges.
Thankfully, many brokers have found ways around these fees and now offer Islamic trading accounts. These accounts don’t charge swap fees or interest fees on leveraged positions, so they fully comply with Sharia law.
In this guide, we’ll review the 3 best Islamic brokers in the UK that you can use to start trading today. We’ll also look more closely at how Islamic brokerage accounts work and how much trading forex with these accounts will cost.
Top 3 Islamic Brokers UK 2021
Finding the best Islamic broker can be hard. You have to trust that your forex broker has a system in place for consistently rolling over your trades without interest. Plus, you still need access to all the trading tools you’d expect from a standard brokerage account.
With that in mind, here are the 4 best Islamic forex brokers in the UK today:
- eToro – Overall Best Islamic CFD Broker – Sign Up Today
- Plus500 – Best Selection of Forex Pairs for Islamic Trading – Sign Up Today
- AvaTrade – Lowest Spreads for Islamic Forex Trading – Sign Up Today
Best Islamic Trading Accounts UK Reviewed
1. eToro – Overall Best Islamic CFD Broker
eToro is one of the most versatile brokers in the UK for Muslim traders. This forex broker carries over 40 currency pairs. eToro also offers CFD trading on thousands of global stocks, dozens of commodities, and 15 cryptocurrencies.
All of these assets can be traded swap-free, opening up a world of trading that’s completely within the bounds of Sharia law. What’s also noteworthy is that you can buy shares and cryptocurrencies outright with eToro, which isn’t possible at most CFD brokers.
On top of that, eToro offers excellent trading tools to help you research trades. You get access to advanced technical charts with over 100 indicators and drawing tools. eToro also provides professional analyst research into US, UK, and European companies, which can help you identify undervalued stocks.
eToro is also one of the largest social trading brokers in the world. You can interact with millions of traders – including other Muslim traders – to share trade ideas, strategies, and stories. Helpfully, you can also view trading sentiment for all of the assets that eToro offers to get a sense of which way momentum is headed.
eToro even enables you to copy other traders, so you can put your own forex trading on auto-pilot.
eToro requires a £750 minimum deposit to open an Islamic account, which can be a barrier for some traders. However, the platform provides a wide range of payment methods and doesn’t charge a monthly fee for your account.
All trades are 100% commission-free and forex spreads start at 3 pips for the popular EUR/USD pair with an Islamic account.
eToro is regulated by the UK’s Financial Conduct Authority (FCA) and provides 24/5 customer support.
- Trade forex, stocks, cryptos, and more
- Advanced technical charting tools
- Social trading network with copy trading
- 100% commission-free trading
- 24/5 customer phone support
- High forex spreads with an Islamic account
- Requires £750 minimum deposit
67% of retail investors lose money trading CFDs at this site
2. Plus500 – Best Selection of Forex Pairs for Islamic Trading
Plus500 is another excellent choice for Islamic traders.
Plus 500 offers swap-free CFDs for 70 forex trading pairs, as well as for nearly 2,000 global stocks, 25 commodities, and 14 cryptocurrencies. So, this broker is a good choice if you want the widest possible range of forex and stocks to trade.
We also like Plus500’s approach to fees on Islamic accounts. The broker doesn’t charge commissions and there’s no monthly fee to keep your Islamic account open. You can even avoid Plus500’s inactivity fee simply by logging into your account every few months. Even better, the minimum deposit is just £75.
Spreads for the EUR/USD trading pair start at 0.6 pips.
Plus500 has a very good trading platform, too. The broker’s proprietary charting software is highly customisable and includes several dozen technical studies you can use to analyse price action. There’s also an economic calendar that you can filter by expected market impact and country, and a news feed that covers the day’s trading-related events.
All of Plus500’s trading tools are available through a mobile trading app as well as on your desktop.
Plus500 is regulated by the UK’s FCA, and Islamic accounts are backed by the Financial Services Compensation Scheme for up to £85,000. Customer support is available 24/7 by email or live chat.
- 70 swap-free forex trading pairs
- £75 minimum deposit for Islamic accounts
- Highly customisable charting platform
- Forex spreads start at 0.6 pips
- 24/7 customer support by live chat
- Only offers CFD trading
- Limited forex and stock research
80.5% of retail investors lose money trading CFDs at this site
3. AvaTrade – Lowest Spreads for Islamic Forex Trading
AvaTrade is one of the most affordable Islamic forex brokers in the UK. This forex and CFD broker charges just 0.3 pips for swap-free trading of the EUR/USD currency pair. On top of that, trading is 100% commission-free and you can open an account with just a £75 deposit.
AvaTrade has a selection of 55 currency pairs for trading, but it’s a little bit limited when it comes to other asset classes. The broker has around 600 stock CFDs, 19 stock index CFDs, and 17 commodity CFDs. All of these can be traded swap-free with an Islamic account.
One thing we love about AvaTrade is that you can choose between two trading platforms: AvaTrade’s own WebTrader platform or the widely used MetaTrader 4 platform. Having access to MetaTrader 4 is a huge plus for advanced forex traders since this software supports forex signals, forex robots, and algorithmic trading. It’s also extremely customisable.
You can trade with either platform on mobile, as well as get price alerts on the go. We especially like using the WebTrader app on mobile since it handles full-screen charts and order entry extremely well.
AvaTrade also offers good research tools. Your account includes access to a news feed and economic calendar. Even better, you can view trade ideas based on current setups in the forex market. AvaTrade also spotlights trade-related buzz on social media, although it’s not a social trading broker.
AvaTrade is regulated by the Central Bank of Ireland and the Australian Securities and Investments Commission. Customer support is available by phone, live chat, and email 24/5.
- Forex spread start at 0.3 pips
- 100% commission-free trading
- Supports MetaTrader 4 trading platform
- Research tools including trade ideas
- 24/5 phone and chat support
- Limited stock and index CFD selection
- Not regulated by the FCA
Your capital is at risk.
What’s Different About an Islamic Trading Account?
Standard trading accounts violate Sharia law, the law that governs the Islamic faith. That’s because Sharia law prohibits interest payments on deposited funds, also known as Riba.
In a normal forex transaction, interest payments happen every night. These payments occur because different currencies typically have different interest rates. These rate differences need to be accounted for when a CFD contract rolls over at the end of the trading day. Forex brokers make money by keeping part of the interest rate charges as a handling, or swap, fee.
That handling fee violates Sharia law, so Islamic accounts do away with it. At the end of the trading day, forex contracts and CFDs held in an Islamic accounts don’t go through the normal rollover process.
Instead, an existing CFD position is closed and then a new position is immediately reopened with a contract for the following day. This swap-free process is allowed under Sharia law and has been approved by leaders of the Muslim faith.
Islamic Brokers Fees Comparison
Swap-free forex trading satisfies Sharia law. But it also leaves brokers without an important piece of revenue that they typically get from forex trading.
So, most Islamic brokers place higher fees on other parts of trading. For example, some brokers charge fixed commissions on trades placed using an Islamic trading account. Others charge higher spreads for CFD trading with an Islamic account compared to a standard account. Many brokers also require a higher minimum deposit to open an Islamic account.
Still, these fees often aren’t that substantially different from those charged by standard brokerage accounts. Let’s take a closer look at the total fees charged by our top 3 Islamic forex brokers:
Minimum Deposit EUR/USD Spread Trade Commission Monthly Account Fee Inactivity Fee eToro £750 3.0 pips None None £15 after 12 months Plus500 £75 0.6 pips None None £10 after 3 months AvaTrade £75 0.3 pips None None £40 after 3 months
Think carefully about what assets you plan to trade and how much you will be charged in spreads when choosing the best Islamic forex broker.
How to Get Started with a Islamic Broker
Ready to start trading forex with an Islamic account? We’ll walk you through how to get started with eToro, which offers 0% commission trading, a huge variety of assets, and a social trading network.
Step 1: Create an eToro Account
To open an account with eToro, head to the broker’s website and click ‘Join Now.’ You can create a new account using your email, or log in using your existing Google or Facebook accounts.
eToro is regulated by the FCA, so you’ll need to verify your identity when you set up an account. Upload a copy of your passport or driver’s license. Then upload a copy of a recent utility bill or bank statement that shows your address.
Step 2: Fund Your Account
Next, fund your eToro account. eToro typically requires a minimum deposit of £140, but you’ll need to deposit at least £750 before you can request an Islamic account.
The broker accepts a wide range of payment methods, including debit card, credit card, bank transfer, PayPal, Neteller, and Skrill.
Step 3: Request an Islamic Account
To switch from a standard account to an Islamic account, you’ll need to talk to eToro’s customer service. Call or email the support team anytime Monday to Friday (support is available 24/5) to make your request. Your Islamic account should be approved within a few days.
Step 4: Start Trading
Once your account is approved, you’re ready to start trading swap-free. From your account dashboard, browse through the currency pairs available for trading or enter a specific trading pair in the search bar. Click ‘Trade’ once you find the pair you want to buy.
In the order form, enter the amount you want to trade. eToro requires a minimum trade size of £40, which is the same for standard and Islamic accounts. You can set a stop loss or take profit price and choose leverage up to 30:1 for forex trading, just as you would with a standard eToro account.
Once your trade is ready, click ‘Open Position’ to open an Islamic forex trade.
Muslim traders have special restrictions when it comes to forex trading because of Sharia law. Thankfully, many UK brokers have established special Islamic forex trading accounts to offer a swap-free trading alternative that doesn’t run afoul of the Muslim faith.
Islamic trading accounts often have different fees than standard trading accounts, so it’s important to know exactly what you’re getting when you sign up for an Islamic trading broker. The 3 UK forex brokers we reviewed all offer competitive fees, excellent trading platforms, and a wide range of forex pairs and CFDs for trading.
Ready to start trading forex with the best Islamic broker in the UK? Click the link below to sign up for eToro today!
eToro – Best Islamic Forex & CFD Broker in the UK
67% of retail investor accounts lose money when trading CFDs with this provider.
Is forex trading halal?
Forex trading is considered halal, or approved, under Sharia law as long as there are no interest charges involved. Islamic brokers eliminate interest charges to make forex trading halal.
What is Riba?
Riba is the Arabic word for interest payments. Riba is prohibited under Sharia law, which is why Islamic accounts offer swap-free forex contracts.
How does swap-free forex trading work?
With an Islamic swap-free trading account, your forex contracts are closed at 11:59:59 pm each night. Your positions are then reopened at 12:00:01 am, a few seconds later, under contracts for the next day.
Are Islamic accounts more expensive than standard accounts?
Islamic accounts have a different fee structure than standard forex trading accounts. Whether they are more or less expensive depends on the exact spreads your broker charges for trading and how frequently you hold overnight forex positions.
Can I trade with leverage when using an Islamic account?
Yes, you can trade with leverage as you would normally when using an Islamic forex account. Most UK forex brokers offer leverage up to 30:1 for retail traders.