Difference Between Islamic Accounts and Standard Accounts

 Standard Accounts

What are Islamic Trading Accounts?

Islamic accounts are swap-free accounts offered to Muslim traders. According to Islamic finance laws – also known as Shariah laws, Muslims are prohibited from taking or giving any kind of interest. Swaps are special fees that traders pay to their brokers when the position is open overnight or longer. As swaps are also a form of interest, it is impermissible for Muslim traders to trade into accounts that involve swaps. Thus, Islamic accounts or No-Riba accounts help Muslims worldwide engage in financial markets without hurting their religious beliefs. The money earned from swap-free accounts is totally Halal as long as no gambling is included.

Benefits of Islamic Trading Accounts:

What are Standard Trading Accounts?

All of your fundamental investment needs are covered by a standard trading account. You can trade in various financial markets such as forex, equities, futures, options, ETFs, mutual funds, and indices. Traders use this type of account because many brokers fixed spreads. Standard accounts are also referred to as classic accounts. The best standard trading accounts offer competitive spreads, quick trading execution, and low commission fees.

Benefits of Using a Standard Trading Account:

How are Islamic Accounts and Standard Accounts different?

Islamic accounts are special accounts offered to Muslim traders who cannot engage in trading with classic accounts due to their religious beliefs. The account is designed to be free from any swaps or rollover fees as they are considered Haram according to Islamic trading principles. Whereas, there are no such criteria in a standard account. No matter which religion a trader belongs to, he/she has to pay swaps or other interest that may be required. Also, Islamic trading accounts are specially designed for Muslim traders. Also to open an Islamic trading account, you need to submit documents that prove your identity as a Muslim. While, in a standard trading account, there are no such restrictions or requirements.

Overall, there are many different kinds of accounts available for traders to choose from. By consolidating all of your investments into one platform, a trading account makes the process of building wealth easier for you. Making the best use of your investments requires making the right choice at the right time. The trader is completely free to decide the trading account for themselves. Those traders who adhere to the rules of their religion have now the option to earn money from the financial markets without worrying about the money being haram. Trading is completely halal as there will be no interest in an Islamic trading account. Whereas, if you are not a Muslim trader and looking for fixed spreads, then you can go for a standard trading account.