What Is a Swap-Free Account and Who Is It For?

There are many types of trading accounts in the foreign exchange market (Forex), adapted to the different needs of traders. One of them is a swap-free account, a tool created primarily for clients who follow the rules of Islamic finance. However, in practice, such accounts are used not only for religious reasons. In this article, we will analyze how swap-free accounts work, who uses them, and in what cases they can be beneficial.

What is a swap and how does it work?

In classic Forex trading, traders can hold positions for longer than one day. In this case, the broker charges or deducts a percentage called a swap. It depends on the interest rates of the two currencies in the pair, the volume of the position, and the direction of the transaction.

For example, by holding a long position on USD/JPY, a trader can earn or pay the difference between the Fed and Bank of Japan rates. That is especially important when using the carry trade strategy.

How does a swap-free account work?

A swap-free account is a trading account that does not charge or write off swaps when a position is carried over to the next day. Such accounts are called Islamic accounts because they comply with the principles of Sharia, which prohibit riba – receiving or paying interest.

To compensate for the lack of swaps, brokers may use an alternative commission model, such as a fixed fee for holding a position for more than 24 hours. However, according to a report from FX Intelligence (December 2024), about 30% of brokers offer swap-free accounts with no additional fees for a certain period (source).

Who uses swap-free accounts?

Financial institutions created these accounts for Muslim traders who wanted to trade without violating religious norms. The question of whether forex trading is halal in Islam remains a matter of debate among Islamic scholars, but the consensus is that if certain conditions are met – such as no swaps or speculation – trading can be permitted (halal).

However, today swap-free accounts are also used by non-religious traders:

• Scalpers who close positions during the day but want to avoid accidental charges.
• Traders in countries with restrictions on interest rates.
• Algorithmic traders who work with the rollover of positions without calculating swaps in strategies.

Benefits of swap-free accounts

1. Compliance with Islamic standards. Ability to trade Forex while adhering to Sharia principles.
2. Predictability of expenses. The absence of variable charges for carrying a position allows for more accurate risk calculation.
3. Strategy flexibility. Such accounts allow you to adapt short-term and medium-term strategies without taking into account overnight commission.
4. Support from brokers. According to the brokerage report of IG Group (Q1 2025), the share of swap-free accounts in the total client base reached 11% (source).

Limitations and risks

1. Holding fees. Some brokers compensate for the lack of swaps with fixed fees. These fees can be higher than classic swaps, especially for long-term positions.
2. Limited selection of instruments. Not all trading pairs or CFDs may be available on swap-free accounts.
3. More isn’t always better. With a regular trading account, a trader can earn additional income from positive swaps, while this isn’t possible with a swap-free account.

Additionally, some brokers restrict the use of such accounts if they suspect that the trader is using them solely for speculation and not for religious reasons.

Examples of brokers and conditions

• Exness offers swap-free accounts to all clients, regardless of religion, but limits access to them for certain instruments.
• IC Markets offers Islamic accounts with zero swaps but charges a flat fee on definite pairs.
• AvaTrade introduced an updated swap-free model in 2025, eliminating commissions for the first 7 days of holding a position.

Before choosing an account, it is vital to carefully study the broker’s terms and conditions – especially hidden fees and restrictions. 

Religious and legal context

In countries with a predominantly Islamic population (for example, Saudi Arabia, UAE, and Indonesia), brokers are required to offer trading options that comply with Islamic standards. However, outside these countries, the religious component is increasingly giving way to practical advantages.

The international Islamic financial organization AAOIFI does not provide universal standards on the topic of Forex trading, leaving decisions to the discretion of national councils of scholars. However, most scholars agree that swap-free trading is closest to the permitted (halal) model, if there are no elements of gambling (maysir) and deception (gharar).

Conclusion

A swap-free account is a convenient tool not only for Muslim traders but also for those who want to avoid unpredictable expenses and tailor trading to specific strategies. It allows you to comply with religious norms, minimize the impact of swaps, and make trading more transparent. However, it is paramount to be aware of possible fees and restrictions by carefully studying the broker’s terms.

For those interested in the question is forex trading halal in Islam, a swap-free account is the most relevant and ethically neutral option in the Forex market in 2025.