Swap-Free (Islamic) Account
Swap-free accounts charge no overnight interest, offered to comply with Islamic finance rules, usually with conditions.
A swap-free account charges no overnight interest for Islamic finance compliance. It is usually funded by wider spreads or admin fees, and often carries holding-period conditions.
A swap-free account, also called an Islamic account, charges no overnight interest (swap) on positions, which would violate Islamic finance principles. Brokers offer them to Muslim traders, but the free part is rarely free: spreads are often wider, or a fixed admin fee replaces the swap, and some brokers limit how long positions can stay open. Read the conditions before assuming a swap-free account is cheaper.
How It Works
- No swap debited or credited on overnight positions
- Broker recovers the cost through wider spreads or a fixed fee
- Some accounts restrict how long a position can remain open
Trading Tips
Compare total cost: wider spread over many trades can exceed the swap saved
Check the holding-period rule before leaving positions open for weeks
Verify the account is genuinely swap-free for all instruments, including indices and crypto
Swap-Free (Islamic) Account Example
Say you hold EUR/USD long for three weeks on a swap-free account. No nightly interest posts either way. Instead the broker charges a flat $5 per lot admin fee after 5 days. On a standard lot the fee roughly matches the swap you skipped, just labelled differently.
How Traders Use Swap-Free (Islamic) Account
Compare the total holding cost, not the swap-free label: wider spreads plus admin fees often exceed normal swap. Genuine Islamic accounts suit faith requirements. Everyone else usually pays less on standard terms.
Related Terms
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