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While there are several forex brokers that you can use to trade currencies, very few of them have Islamic accounts, especially in the UK. In this guide, we have reviewed some of the top Islamic forex brokers in the UK for 2021.

Best UK Islamic Forex Brokers List

Selecting the right Islamic broker is not that different from selecting a normal broker, in that there are several different features and characteristics that you have to keep in mind. On that note, here are some of the top Islamic forex brokers in the UK:

  • eToro – The Best Overall Islamic Forex Broker UK for 2021
  • Skilling – Best Islamic Forex Broker for Beginners
  • AvaTrade – Best Islamic Forex Broker for Trading Forex Options
  • VantageFX – Best Islamic Forex Broker for High Leverage
  • Forex.com – Top Islamic Forex Trading Account for Low Spreads
  • IC Markets – Best Islamic Forex Trader Compatible with MT4/MT5
  • Pepperstone – Islamic Forex Broker With the Lowest Fees 2021
  • IG – Best Swap-Free Islamic Broker Account for Advanced Traders
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10/10

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€50

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52

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FCA, CySEC, ASIC, CFTC, NFA, BAFIN

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Average spread

EUR/GBP

2.5

EUR/USD

1

EUR/JPY

2

EUR/CHF

5

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2

GBP/JPY

3

GBP/CHF

4

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1

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1.5

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2.8

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0

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30:1

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30:1

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30:1

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30:1

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30:1

NFA

30:1

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Total Cost

€0.01

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9/10

Min. Deposit

€20

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0.6 pips

Max. Leverage

20:1

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100

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What you can trade

Forex

Indices

Actions

Cryptocurrencies

Raw Materials

Average spread

EUR/USD

0.6

GBP/USD

0.8

Additional Fees

Rolling fee

Conversion

0.0

Leveraged

Top Islamic Forex Brokers UK Reviewed

1. eToro – The Best Overall Islamic Forex Broker UK for 2021

eToro is, on the whole, the best Islamic forex broker in the UK for 2021. They offer Islamic accounts with no rollover fees on overnight contracts, thus eliminating the problem of charging interest and resulting in the account being halal. They also do not charge commissions for trading on forex and have interest-free leverage. This makes them the ideal Islamic trading platform for any trader.

They offer over 40 currency pairs on their Islamic trading account, in addition to several commodities, currencies, stocks, indices, cryptocurrencies and ETFs. The process to set up an Islamic account is to set up a regular account and get it converted into an Islamic account, and this has been discussed below in detail. However, the minimum deposit requirements for an Islamic account are much higher than those for regular accounts, at 1000 GBP instead of just 150 GBP.

This is made simple by the fact that eToro accepts a variety of different payment methods, including credit/debit cards, bank transfers, and a variety of international wallets. There are no deposit fees, and the inactivity fees that eToro charges only come into effect if your account is inactive for more than a year.

Etoro Islamic Trading

They have their own trading platform, which stands out from its competitors because of the user-friendly interface, making it extremely easy to navigate. They have a web portal and a mobile app, meaning that you can check your trades and portfolio on the move too. They also have a variety of charting tools that are useful for beginner and intermediate traders. Since it is a social trading platform, you also get access to the news feeds and get to see what other traders think about major market events. This allows you to easily view the market sentiments and predict the momentum more accurately, improving the quality of your forecasts and assumptions.

eToro also offers a copy trading feature, wherein you can easily look at the trades other more experienced traders are making, and choose to copy them. By doing this, you can capitalize on their expertise and put your portfolio on autopilot. The range of options that eToro offers in terms of people you can copy is unparalleled in the industry. Therefore, copy trading with eToro is as simple as creating an account, searching for people who you wish to copy, and then depositing funds into the copy trading portfolio. Your portfolio will then mirror all of their existing trades, allowing you to take advantage of their expertise and their knowledge and profit from it.

Perhaps the best part about eToro, however, is that they are insured by both CySEC and the FCA, meaning that they are a licensed broker. This ensures that your capital is safe and secure when it is invested with them. This is the reason they have a full KYC (Know Your Customer) verification process, requiring new users to submit proof of their address as well as their ID. you can only begin to trade after your verification process has been completed and your documents are deemed to be legitimate by their Compliance department. eToro also offers 24X5 customer support to resolve any queries with regards to their platform or the process of setting up an Islamic account.

Pros

  • Commission-free trading on 40+ forex pairs
  • Access professional research and gauge market sentiment through the social nature of the platform
  • Custom trading platform with 100+ technical tools for beginner and intermediate traders
  • Offers copy trading services with hundreds of traders that you can choose from to copy
  • Regulated by the FCA
  • 24X5 customer support
  • Easy interface to use and navigate
  • Available as both a web platform and a mobile app

Cons

  • High minimum deposit requirement for Islamic trading accounts (1000 GBP)
  • Not suitable for extremely experienced traders

67% of retail investor accounts lose money when trading CFDs with this provider.

2. AvaTrade – Best Islamic Forex Broker for Trading Forex Options

AvaTrade For Islamic traders who wish to buy and sell forex options, AvaTrade is one of the best trading platforms available. While its primary attraction is that it offers access to forex options, there are a lot of other factors that make AvaTrade a desirable broker. For starters, it offers over 55 forex pairs, ranging from major to minor and even exotic currency pairs. All trading through AvaTrade is done in a 100% commission-free manner, thus making the platform compatible with Sharia law.

The AvaTrade platform is available for both mobile and web portals, and you can easily open up profit and loss charts to see the likelihood of profit on a particular trade using the historical volatility. Using the easy-to-use interface and user-friendly tools, you can easily perform technical analysis. They also have a news feed and an economic calendar for you to be able to keep up with the recent economic events. They also support social trading and copy trading, the same as eToro, through their app.

AvaOptions Platform

The platform is regulated by both the FCA and Australia’s ASIC, meaning that your money is secure when you invest and trade via AvaTrade. To open an Islamic forex account with AvaTrade, you need to deposit a minimum of 100 GBP into your regular account and then make a request for a swap-free account instead. Their customer service is available 24X5 to deal with such queries, and your account will get converted within 2-3 business days at the most.

Pros

  • 100 commission-free trading of forex pairs and vanilla options through the mobile and web platforms
  • AvaOptions app for multi-leg options analysis and looking at the probability of profit based on historical volatility
  • Social trading and copy trading services are available
  • Low minimum deposit, even for an Islamic forex account
  • Regulated by the FCA as well as the ASIC

Cons

  • No centralised platform for spot, options, and social trading. Each of these is done through a separate platform, leading to confusion and mix-ups.

Your capital is at risk.

3. VantageFX – Best Islamic Forex Broker for High Leverage

VantageFX is another top-tier broker that offers Islamic forex accounts. This platform is good for traders who wish to trade on high leverage, as they provide leverage of up to 500x on some major currency pairs. In addition to this, even on minor and exotic currency pairs, VantageFX usually offers leverage of up to 75x or greater.

Another major advantage that VantageFX offers is that it has two account options: the STP and the ECN order processing methods. Each of these methods has its own advantages and disadvantages, and they also offer different spreads. While the spreads for STP accounts start at 1.6 pips, those for ECN start at 0 and have a commission of $3 per lot instead.

VantageFX Trading Platform

While VantageFX has a user-friendly platform that is very easy to navigate, it is a bit lacking in tools for advanced charting and technical analysis. Therefore, VantageFX is also compatible with the MT4 trading platform, allowing for the use of automated trading, signals, and bots. This also allows you to backtest any strategies you might have against the market’s past performance.

VantageFX has over 40 forex pairs that you can trade on, and they have low minimum deposit requirements, even for Islamic trading accounts. For example, the minimum deposits are 200 GBP for an STP account and 500 GBP for an ECN account. They offer 24X5 customer service assistance for any queries regarding the conversion of a regular account to an Islamic trading account.

Pros

  • Trade with leverage as high as 500x on most major currency pairs
  • Low minimum deposit requirements
  • Multiple types of accounts are available, you can choose between opening an STP or an ECN account based on your requirements and preferences
  • Compatible with both MT4 and MT5 trading platforms for advanced technical analysis and automated trading
  • Regulated by the Australian ASIC
  • Extremely tight spreads, as little as 0 on an ECN account with a $3 commission per lot traded

Cons

  • Lower selection of forex pairs compared to its competitors
  • Above-average spreads with an STP account

Your capital is at risk.

4. Forex.com – Top Islamic Forex Trading Account for Low Spreads

forex logo Forex.com is one of the best Islamic brokers, and it is the most popular choice among US investors. It was one of the initial pioneers of forex trading among retail investors and has been there since 2001. Since it is primarily based out of the US, it is regulated by the SEC as well as the CFTC. it allows you to trade on over 80 currency pairs, alongside cryptocurrencies and major commodities such as gold and silver.

They have two types of accounts available: a standard account and a commission account. A standard account has spreads, which are as tight as 1 pip for major pairs. On the other hand, a commission account has 0 spreads but instead charges a commission of $5 for every lot of 100,000 that you trade.

Forex.com Platform

One of the biggest USPs of Forex.com is that it provides a detailed analysis of the forex market, which is unrivalled by almost any other platform. It offers professional reports as well as a news feed and an economic calendar so that you watch out for major events and adjust your strategies accordingly. Its platform is also unique for having a built-in tool for pivot point analysis, to take advantage of technical price movements.

Their web and mobile platform is easy to use and interact with and includes performance analytics so that you can analyse your losses and wins to fine-tune your strategies. They require a minimum deposit of 100 GBP, however, you can only add funds through a bank transfer or a debit card.

Pros

  • US broker regulated by both the SEc and the CFTC
  • Extremely low spreads on their standard account
  • Low minimum deposit requirements of 100 GBP
  • Offers access to professional market research, macroeconomic calendars, as well as pivot point analysis
  • Provides performance analytics to analyse losses and profits, allowing traders to fine-tune trading strategies

Cons

  • Deposit and withdrawal is a complicated process because Forex.com does not accept credit cards or any e-wallets.

Your capital is at risk.

Best Islamic Forex Brokers UK Comparison

A tabular representation of some of the top brokers, along with their pricing structure, their USD/GBP and EUR/USD spreads, the leverage they offer, and the withdrawal fee that they charge has been given below. While searching for the perfect broker for your Islamic forex trading account, these are all the factors that you should consider to make sure that you are making the right decision.

Platform Pricing Structure USD/GBP Spread USD/EUR Spread Maximum leverage Deposit/Withdrawal Fees
eToro Spread 2.1 pips 1 pip 30x $5 withdrawal fee
VantageFX Spread (STP) and Commission (ECN) 1.4 pips (STP) and $3 per lot (ECN) 1.1 pip (STP) and $3 per lot (ECN) 500x None
AvaTrade Spread 1.6 pips 0.9 pips 400x None
Forex.com Spread (STP) and Commission (ECN) 1 pip (STP) and $5 per lot (ECN) 1 pip (STP) and $5 per lot (ECN) 50x None

How Is An Islamic Broker Different?

Under Sharia or Islamic law, trading is considered haram and is forbidden. Islamic brokers solve this problem by trading and operating in a more halal manner, thus allowing Muslim traders to also trade forex. The key difference is in the practice of charging interest that differs between traditional brokers and Islamic brokers.

In a traditional forex account, when you hold a position for more than one trading day, the contract must then be rolled forward for the next day. This happens at the end of every day for all open positions at the time. Forex brokers usually charge you interest for rolling over your positions. This is called an overnight fee since it only applies if you hold your positions overnight, or a swap fee since the broker has to swap out your old contracts for new ones that are valid for the new day of trading.

The issue that arises from this is that interest payments are prohibited in Islam because they are considered to be a form of usury. Islamic forex brokers, therefore, do not charge overnight interest or a swap rate, and instead, they come up with other ways that do not involve charging interest. Under the traditional model, any trader who holds a position for more than one trading day would be in violation of the Islamic rules.

Islamic forex brokers get around this problem by choosing to do one of the following: they either require a larger minimum deposit, charge a looser spread, or charge a flat fee for rolling over your contracts at the end of every trading day. This way, they can still maintain their revenue stream without violating the principles of Sharia law.

How To Get Started With An UK Islamic Forex Broker

If you wish to get started with the best Islamic forex broker in the UK, then what you should do is head over to eToro and set up your account. The process of setting up a swap-free trading account with eToro has been discussed below.

Step 1: Register an eToro Account

The first step to opening an Islamic account with eToro is to register for a standard trading account. To do this, all you have to do is to head over to the eToro website, click on “Join Now”, enter your login credentials and contact information, and click on Create Account. Alternatively, you could also choose to simply link your account to your Google or Facebook account to avoid having to remember your username and password every time you sign in.

eToro Sign Up

67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money

Step 2: Verify Your Identity

eToro Identity Verification

Once you have completed the process of entering in your details, the next step is then to verify your identity. Since eToro is regulated by the FCA, they need to be able to verify your identity before they allow you to invest on their platform. For this, you will have to submit proof of identity and address proof. For the former, you can submit any government-issued ID, such as your driving license or passport. For the latter, you can upload your bank statement or a utility bill. You should make sure that all the required details are clearly visible in the document you upload as proof of your identity and address.

Once you have uploaded the documents, eToro has a quick turnaround time and will verify your account shortly. You are then free to begin trading and access their cache of 2400+ financial instruments.

Step 3: Deposit Funds

eToro Deposit Funds

The next step then is to deposit funds into your account so that you can begin trading. eToro requires an initial deposit of GBP 1000 if you wish to apply for an Islamic account. You can deposit funds to eToro in a variety of ways, such as via credit/debit card, bank transfer, or through online wallets such as PayPal and Skrill. Once you have finished funding your eToro account and the deposited funds show up in your eToro balance, you can then move on to the next step.

Step 4: Request an Islamic Account

The next step for you is to request an Islamic account. Contact their customer support and let them know that you wish to switch from a standard account to an Islamic account. Their customer service is usually available 24X5 and the status of your account will be changed within 2-3 business days. Once this happens, swap fees will be removed from your account.

Step 5: Start Trading

Now you’re ready to begin trading with eToro. Search for whichever pair you wish to trade, select whether you want to buy or sell, choose the amount, and you’re good to go. You can also choose how much leverage you wish to apply on the trade (the maximum is 30x for major pairs and 20x for minor pairs), and the stop-loss for each trade.

eToro Forex Pairs

67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money

Conclusion

eToro, being the best Islamic forex broker in the UK for 2021, makes it very easy for you to keep your trades halal. They offer swap-free accounts that do not charge interest and cater to the needs of their Muslim traders specifically. In addition to this, they also have high leverage and a choice of over 2400 financial assets to choose from, making them the clear best choice for Islamic forex trading.

EToro – Best Islamic Forex Broker in the UK For 2021

67% of retail investor accounts lose money when trading CFDs with this provider.

FAQs

What is a swap charge in forex trading?

A swap charge is an interest fee that you pay when you have to hold a position for more than one trading day because the contracts are rolled forward for the next day. It is called a swap fee or an overnight charge. Since it is an interest, it is not permissible in Islam, which is why the best Islamic forex brokers are swap-free.

Do Islamic forex accounts cost extra?

Most Islamic forex accounts require you to submit a higher minimum deposit pr charge slightly higher spreads. This is done to make up for the deficit because they do not charge swap fees. However, on the whole, they do not cost more than normal forex accounts, because they make up for it by being swap-free.

How much money do I need to open an Islamic account in the UK?

You can open an Islamic account in the UK with a minimum investment of as little as 100 GBP. However, the best rated Islamic forex broker, eToro, requires a minimum investment of 1000 GBP.

Is forex trading halal in Islam?

Forex trading in Islam is halal as long as there are no interest charges being levied or paid in the process. That is why all Islamic forex brokers are swap-free so that they do not commit usury and are in compliance with Sharia law.

Can I trade with leverage with an Islamic forex broker in the UK?

Yes, most good Islamic forex brokers let you trade on leverage, as this is considered halal in Islam. The only prohibition is on trading in a way that results in interest being charged.

About Nishit Kumar
About Nishit Kumar

I'm a second year Accounting and Finance student at the University of Warwick, in addition to being an incoming Trading Analyst at Morgan Stanley. I'm passionate about the financial markets and all things finance.

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