Today, there are various ways people can invest their money and earn more profits from it. One of these options is Foreign Exchange or Forex trading, which generally deals with buying or selling different currencies. In this kind of trading, people usually buy a certain amount of one currency and pay it with another currency. One of the financial options that can be done in Forex trading is the forward transaction, where two parties agree to exchange currencies at a certain time in the future with a fixed exchange rate that they agree upon. The forward transaction may also be done as a swap, in which both parties exchange currencies for a period of time and reverse it at the end of the period.
In Swap, however, there is an amount of interest that needs to be paid. This is against Islamic teaching, in which someone is not allowed to pay or receive interests to or from other people. Meanwhile, Forex trading is open for everyone regardless of beliefs and background. Today, some Forex broker websites have introduced a new regulation to fulfill Muslim traders’ needs in relation to Islamic financial laws. This new regulation comes in the form of free-swap Forex account or also known as Sharia Forex account, in which its users are able to use Forex service features without having to deal with swaps or interests.
Depending on the provider, Swap Free Forex account may have different features. However, as it was stated above, this type of account generally does not let its users have to pay for interests which can happen in a certain forward transaction. There might be many Forex brokers that offer this account, but those who want to use it need to know the features of a good swap-free account. Related to its main purpose, there are some brokers that free users from interests, yet they widen the spread or move the interests to other kinds of fee. This is just the same with normal accounts and is not the sign of a good one. Another benefit of this account is that currency exchange can be held as long as users wish.
How to apply
Again, this differs between one provider and another, but inquiring for a swap-free Forex account is not complicated. First, users just create a normal account and then validate the account through each provider’s method. After this step, they request for the particular kind of account to the service provider and they will get a free swap status on their account.