The forex market makes it possible for the governments and sector industries to carry out international transactions. Forex trading has spread across religions because nowadays people can open an Islamic account and trade to earn income from the foreign exchange market. Forex trading also ensures the interchange in the demand and supply of currencies across countries, which facilitates the process of economic growth.
What is Islamic account
An Islamic account is a swap-free account that facilitates trading among the Muslims who believe in the Islamic religion. The Islamic account is also known in another term as Shariah Forex Account. This account complies with the Islamic beliefs that prohibit riba (interest) from the trading activities. The Islamic religion prohibits business transactions that involve interest payment from one party being transferred to another party.
Rcpro.com is one of the best Islamic account providers. Opening an Islamic account with this broker assures traders free swaps and no rollover charges are applied to trades that run overnight. Islamic accounts are basically free from swaps or any form of interest payments. Royal Capital Pro understands this religious belief and has chosen to offer this settlement to facilitate a wonderful trading experience for the Islamic religious traders.
Islamic account features
Islamic accounts deviate from the conventional forex trading practices due to the observance of the sharia law in Islam. The law prohibits the charging of interest for transactions between two or more parties. In Islam, a trading transaction should not result to riba, which is considered to be unfair and against the principles of human integration. Here are the main features of an Islamic account.
- No swap charges for overnight positions
The positions opened in an Islamic account are not subject to roll over charges. The Islamic accounts are swap free. The Islamic beliefs are against charging any form of commission of interest. This means that forex brokers offering Islamic accounts do not factor swap or roll over charges to positions held by their clients.
- Trading positions do not have time limit
The traders have the flexibility to hold trading positions for any length of time they want without having to worry about swap charges. The swap free accounts are simply a limitless opportunity for generating revenue for traders with no limit to the time taken.
- No widening of trading spreads
The top forex brokers providing this service do not increase their spreads to cover these charges. This would be seen as ‘indirect swap’ and is not suitable for Islamic traders owing to their religious beliefs that prohibit taking advantage of a party in a trading transaction.
- Up front commissions are not charged
There are no extra charges applied on clients with an Islamic account. The forex platforms are customized to the needs of the Islamic clients to ensure their religious faith is observed. As such, there are no penalties or commissions charged prior to opening or during operation of an Islamic account.
When, why and by whom it’s used
- When is an Islamic account used?
Apart from enjoying swap free services, all other aspects of trading remain intact. The Islamic accounts are normally operated for five days a week on a 24-hour basis just like the conventional forex trading services. An Islamic account is operated on the same platform as other forex accounts and may be used any time of the day during the official working days for the chosen forex broker.
- Why is an Islamic account used?
An Islamic account is used to cater for the Islamic religion aspect in the world of forex trading. Islam requires observance of certain religious ethics, including the requirement that trading transactions should not attract interest. This necessitates offering of an Islamic account by forex brokers to offer Islam believers an opportunity to explore the limitless potential in forex trading.
- By Whom it is used
Islamic account is generally designed for the forex traders with Islamic beliefs. The account is, however, not limited to the Muslim clients although it serves them the best. Other traders can also open swap-free accounts. It should be noted that the forex traders cannot open both interest charging and swap-free account from the same forex broker website. These provisions can change with jurisdictions. For instance, the Asian countries limit Islamic accounts to the Islam clients mostly validated through the Islamic finance system.
Online fore trading offers a promising future, especially with the introduction of Islamic accounts. A forex broker that operates an Islamic account ensures there are no interest or swap charges that contravene Islamic faith that prohibits riba. For those seeking to exploit the advantage of an interest-free account, an Islamic account is a real deal.