|Popular Forex Brokers with Islamic Forex Account|
1. What is an Islamic Forex Account?
An Islamic Forex account is a regular Forex trading account minus the interest fees. According to Islamic Law, it is forbidden to take or give interest of any kind and Islamic Forex accounts were designed with this in mind.
2. What is Swap Free Forex account?
Swap free is another way of saying interest-free. An integral part of Forex trading is paying different kinds of interest fees such as Rollover fees to name one example. Islamic Forex accounts have all these fees waved and are therefore known as Swap-Free Forex accounts.
3. Why does Shariah law forbid interest?
Shariah law, which is Islamic law, forbids giving or taking interest of any kind. The reason behind this prohibition is the belief that Muslims should give for the sake of giving and not in order to get something in return. It is for this reason that Forex Islamic accounts, which are interest free, were created.
4. What did the Muslim scholars rule about Forex trading?
As is the situation with stocks and various types of online trading, there is an ongoing debate about Forex trading and the Islamic Shariah nowadays. nonetheless, and with a lot of cautions a large number of Islamic scholars had set a number of conditions which makes the Forex trading allowed for the muslims.
5. What is the best method of finding a Forex Islamic broker?
As is the case with finding a Forex broker, finding one that offers Islamic accounts should be done carefully and responsibly. Reading Forex reviews is a great first step and comparing the various brokers that offer Islamic accounts is something you should do before selecting one.
6. What kinds of fees are waved in Forex Islamic accounts?
All fees that are interest-based are waved in Forex Islamic accounts. One example of an interest payment in Forex is a rollover fee, a payment made when a trade leaves positions open overnight. Rollover fees are waved in Forex Islamic accounts.
7. What are rollover fees?
The Forex market closes at the end of every day. If a trader wants to leave a position open overnight, they will have to pay what is called Rollover fees, which are interest payments made for leaving the position open. In a Forex Islamic account, Rollover fees are waved.
8. What is Riba?
Riba is the Arabic term for interest. Riba is forbidden according to Islamic law since the law dictates that Muslims must give without expecting something in return such as interest. Forex Islamic account are Riba free, also known as Swap free or interest free.
9. What is Musharaka?
Musharaka refers to a partnership or joint venture for a specific business with a profit motive, whereby the distribution of the revenue will be distributed according to an agreed upon ratio. In the case of losses, the parties will share the losses based on the agreed ratio.
10. What is Hiba?
This term refers to a gift or donation as a result of a loan given. Many brokers who offer Forex Islamic accounts offer this service and give proceeds to charity based on the trader’s account and Forex positions.
11. What are the down sides of a Forex Islamic account?
While a no interest Forex account seems appealing, Islamic accounts are not without some disadvantages. They are often accompanied with higher minimum investments or lower leverage. Forex Islamic accounts are not for everyone but if you often leave positions open overnight, then Forex Islamic accounts are the perfect solution.
12. What are the advantages of a Forex Islamic account?
Forex Islamic accounts are not for everyone but if you are a trader who often leaves trades open overnight, an Islamic account will be perfect for you. Islamic accounts enable you to leave positions open overnight without the worry of having to pay Rollover fees.
13. Is Islamic Forex Halal or Haram?
There is an ongoing debate between different Muslim scholars about the permissibility of Forex trading. At the end of the day, there are split opinions and some believe it is OK while others forbid it completely due to the interest found in certain Forex fees. In order for Forex to be Halal, the following conditions are necessary:
• The sale and purchase is carried out on the spot and without a delay
• The currency of the transaction must be transferred to the accounts of the two sides
• The complete sum of money for the transaction is paid with no installments
• All transactions are conducted interest-free