Best Brokers With Islamic Accounts

The Ultimate Guide to

Choosing a Broker
For Islamic Accounts

Not sure which broker is right for you?

Don’t worry - we’ve got you covered. In this guide, you’ll learn:

• Why AvaTrade scored high for islamic accounts (Jump to section)
• Who AvaTrade is (and isn’t) suitable for (Jump to section)
• An in-depth feature comparison of the top #3 brokers (Jump to section)
• An overview on islamic accounts (Jump to section)

Ready?

Part 1

Why Choose AvaTrade
For Islamic Accounts?

AvaTrade scored best in our review of the top brokers for islamic accounts, which takes into account 120+ factors across eight categories. Here are some areas where AvaTrade scored highly in:

AvaTrade offers four ways to trade: Forex, Spread betting, CFD trading, and options trading. If you wanted to trade GOLD through copy trading or other means, skip to part two.

The two most important categories in our rating system are the cost of trading and the broker’s trust score. To calculate a broker’s trust score, we take into account a range of factors, including their regulation history, years in business, liquidity provider etc.

AvaTrade have a AAA trust score, which is v. good. This is largely down to them being regulated by Central Bank of Ireland, ASiC , FSA, FSB and BVI, segregating client funds, being established for over 11 years, and much more. For comparison:

Trust Score comparsion

The second thing we look for is the competitiveness of the spreads, and what fees they charge. We've compared these in detail in part three of this guide.

Part 2

Who AvaTrade is (& Isn’t)
Suitable For

As mentioned, AvaTrade allows you to trade in four ways: Forex, Spread betting, CFD trading, and options trading.

To trade with AvaTrade, you'll need a minimum deposit of $100. AvaTrade offers a range of different account types for different traders including a micro account, mini account, vip account.

Finally, AvaTrade isn't available in the following countries: US, Belgium, Canada & Singapore.

Part 3

A Comparison of AvaTrade vs. London Capital Group vs. XTB

Want to see how AvaTrade stacks up against London Capital Group and XTB? We've compared their spreads, features, and key information below.

Spread & fee comparsion

Comparison of account & trading features

Part 4

What is an Islamic forex account?

An Islamic Forex Account is an interest-free account that supports the rulings of Islamic Sharia. In a regular forex trading account, there are certain situations where interest charges may be charged, for example, with London Capital Group, a low 0.0027% overnight financing fee is charged for each open position at 22:00 each day. However, in a halal Islamic Forex account, no interest is charged for an overnight open position in the market like the other conventional trading accounts.

Why regular forex accounts are not Sharia compliant (halal)?

Muslims cannot just open a regular forex account which makes money from money, by charging interest, and making money from money is not permissible in Islam and referred to as Riba.
The interest that is termed as Riba in Islam refers to the amount that is charged above the originally decided amount or any payment that is made without any benefit from the other side. Riba – interest – is not supported in Islam but in the regular forex accounts, there is certain interests and commission charged on a trade.

Secondly, there is another prohibited activity when it comes to Islam which is referred to as Gharar or simply put gambling. Gharar refers to the volatile conditions in the forex market which make it difficult to predict without certainty the what is likely to happen in the future and is akin to gambling. When in any deal, terms and procedures that are not defined and the buyer is not actually aware of all the hazards and outcomes that lead to Gharar and it is declared forbidden in Islam.

Types of trading that are not Sharia compliant

The common forex trends followed by the international markets are not complainant according to Sharia.
Riba – an interest that is charged from the buyer under different conditions
Pledge – a signed commitment that is signed by the customer agreeing to the terms to pay the loan back in the limited time or else the agent is permitted to sell out the contract and recover the loan if the customer is unable to reach the specific percentage of the margin.
Loans – money was given by the agent (Bank) to the customer on some settled terms of interest
Short selling, trading on margin and forwards sales are also not permitted by Islam

How do you get an Islamic account?

Getting an Islamic forex account is not a big deal today; a number of brokers and companies are offering the Islamic forex account services. The accounts are designed in the support of all the Islamic rulings on business and investments.

Summary

Islamic Forex Trading account is something that is Riba free and follows the Islamic Sharia rulings for business and investment.