Halal trading: Best UK Brokers Offering Swap-Free Accounts

Electronic securities trading is a diverse and adaptable domain that accommodates the preferences of various investors, including those who adhere to different religious beliefs such as Islam. This being said, many brokers offer islamic accounts for their users.

Islam, a major monotheistic religion, boasts approximately 1.9 billion followers globally, making it the second-largest religious community spanning over 50 countries.

An Islamic trading account emerges as a viable option for individuals adhering to the principles of the Quran, enabling them to engage in stock trading.

This article aims to provide insights into the fundamental aspects of an Islamic trading account, its functionality, distinctions from other types of accounts, and a list of prominent brokers offering this service.

Introduction to the Islamic trading accounts

Islamic trading accounts cater to individuals seeking to explore investment opportunities while adhering to their religious principles.

In the Islamic faith, Sharia law governs permissible and impermissible activities across various aspects of life, including finance. Consequently, these accounts are designed to align with these religious principles.

Definition of an Sharia-compliant trading account

An Islamic trading account is an investment platform specifically designed for the Muslim population adhering to the principles outlined in the Quran while engaging in stock markets, in accordance with Islamic finance.

What sets the Islamic trading account apart is its exclusion of all forms of interest. It is important to note that Sharia law strictly prohibits the accumulation of interest (riba). Consequently, investors using these accounts do not engage in paying or receiving monetary interest for concepts such as rollover or overnight fees, for example.

Sharia serves as the foundation of the Islamic legal system, encompassing various aspects of Muslims' lives, including prayers, fasting, and, notably, investments. It draws from three crucial sources: the Quran, the teachings and conduct of the Prophet Muhammad, and the fatwas or legal pronouncements of Islamic scholars.

Presently, a portion of stock trading is deemed permissible for Muslims, granting them access to instruments such as:

  • Islamic bonds (Sukuk): These are bond-like instruments compliant with Islamic finance, where returns are not based on interest but rather on earning profits from assets or projects.
  • Indices and ETFs: Trading in indices and exchange-traded funds (ETFs) can be permissible if the underlying assets of these funds are Shariah-compliant.
  • Raw materials. Trading in commodities (like gold, silver, oil) is allowed as long as it follows certain Islamic finance principles, such as immediate transaction settlement and avoiding speculation.
  • Shares (with the condition that companies' activities are halal, i.e., permissible under Islamic law). This means avoiding companies involved in activities like alcohol, gambling, pork-related products, conventional financial services (like banking and insurance), and other non-Shariah compliant industries.
  • Halal cryptocurrencies: Some cryptocurrencies may be considered halal if they are used as a medium of exchange and comply with Islamic principles.
  • Forex: Forex trading can be permissible in an Islamic account if it is done on a spot basis, meaning the transactions are settled immediately without interest.

It is incumbent upon every Muslim investor to verify whether the asset they intend to trade is permitted or prohibited according to Islamic law.

It's important to note that Islamic finance principles emphasise ethical and moral trading, avoiding excessive uncertainty (gharar) and speculation (maisir). Each Islamic financial institution may have its own Shariah board or consult with Islamic scholars to ensure that its products and services, including Islamic trading accounts, adhere strictly to Islamic laws.

The 4 principles of halal trading

Islamic finance is governed by four fundamental principles rooted in Sharia law, which are:

1. Prohibition of interest (riba)

Islamic law strictly prohibits the accumulation of interest. Consequently, Muslim investors abstain from paying or receiving interest in any of their transactions, including trading. This principle is based on the belief that money should not be treated as a commodity that can generate profits just by being lent. Instead, profits should be earned through legitimate trade and investment in assets.

2. Asset-backed transactions

Islamic finance emphasises that financial transactions should be backed by tangible assets or services. This means that money should be invested in real economic activities and should be linked to the ownership of a physical asset, ensuring that investments have intrinsic value and contribute to the real economy. This means that derivative trading, such as CFD trading, is problematic – although some Islamic financial institutions and scholars are working on developing Shariah-compliant derivative products.

3. Prohibition of speculative transactions

Islamic finance avoids transactions that are excessively uncertain or speculative. This principle is aimed at ensuring fairness and transparency and reducing exploitation in financial dealings. Transactions should be clear and have defined terms to avoid ambiguity and uncertainty.

4. Risk sharing

In Islamic finance, the concept of risk sharing is central. Financial transactions should involve the sharing of profits and losses between the parties involved. This is in contrast to the conventional finance system where lenders typically seek to transfer risk to borrowers.

Compliance with rules on uncertainty (Gharar) and gambling (Maisir)

“Gharar” and “Maisir” are two important concepts in Islamic finance that refer to prohibited elements in financial transactions:

Uncertainty (Gharar)

Gharar is a term associated with uncertainty, deception, and risk, defined in Islamic dictionaries as “the sale of what is not present.” Islamic finance prohibits gharar as it contradicts the certainty and transparency required in commercial relations. It is linked to illegitimate trade due to risks related to quality and compliance, among other factors. Consequently, trading with futures and options contracts is prohibited in modern Islamic finance due to the uncertainty involved in the delivery of the underlying asset at a future date.

Gambling (Maisir)

Maisir in Islam refers to gambling, and the Quran defines it as a ‘grave sin.' It occurs when one party profits at the expense of another, resulting in the latter losing in an uncertain event. Maisir is described as “the acquisition of wealth by chance (not by effort).” Earnings through gambling are thus condemned by Sharia.

Characteristics of an Islamic trading account

Muslims can trade in the markets using an Islamic trading account but with specific differences to ensure compliance with Sharia law:

  • Muslim traders are exempt from paying or collecting interest.
  • Brokers may choose to charge a higher initial spread to compensate for the absence of interest on these accounts.
  • Muslim account holders are required to pay the margin, commissions, and administrative expenses not associated with interest collection.
  • Some brokers offering Islamic trading accounts allow positions to be kept open for a maximum of 5 days without incurring swap charges.

Brokers that offer halal accounts

Here are some of the noteworthy brokers that provide Islamic trading accounts in the UK:

These brokers enjoy a positive reputation and operate within proper regulatory frameworks.

Further more information can be found in our comparisons:

🆚 Interactive Brokers vs ActivTrades: which broker is better?

🆚 ActivTrades vs XTB: in-depth comparison of costs, tools, & more

🆚 Interactive Brokers vs XTB: comprehensive guide to choose the best broker

Islamic forex broker

Forex trading is a very interesting and popular practice. We ranked the halal brokers, to find out the best one with swap-free Islamic accounts, that let you trade without the worry of riba (usury) on overnight positions. Here are the UK's top Islamic forex brokers:

forex islamic account broker
  • ActivTrades: #1 for Islamic forex trading: They provide a complete package with swap-free accounts, robust trading tools, and resources that align with Sharia principles.


Europe, USA

Regulated by the SEC, FCA and the Central Bank of Ireland

Low fees and excellent price execution

Free trading platforms and tools - powerful enough for professional traders but designed for everyone

Minimum deposit:


  • Interactive Brokers: Unmatched global market access: Offers swap-free accounts alongside extensive access to global markets, perfect for experienced Islamic traders seeking ethical trading conditions.
forex islamic account broker uk
  • XTB: Best for beginners: XTB combines competitive, swap-free trading with excellent educational resources, making it a secure and supportive choice for new Muslim traders.

Advantages and disadvantages of using an Islamic account

Allows Muslim believers to trade various financial instruments without compromising their faith.Usually incur higher costs in terms of spreads or commissions (instead of interest)
No charges for swaps.The absence of leverage limits tools for traders with less capital.
Profits or losses are distributed based on prior agreements between the parties.Not all financial instruments are allowed under Islamic principles.
Transactions are conducted without waiting times.

How to open an Islamic account UK?

The availability of an Islamic trading account depends on the policies of each broker. Before opening a real-money Islamic account, it is advisable to take initial steps through a demo account to practise strategies and adapt to the financial market.

Generally, the requirements to open an Islamic account are similar to a regular account:

  • Register with the chosen broker.
  • Submit all requested documentation to the intermediary, including identity, residence, and proof of faith.
  • Accept the terms and conditions.

Once the account is open, funds can be transferred through a valid payment method.


Islamic trading accounts serve as a vital bridge between financial markets and the principles outlined in Sharia law. The featured brokers, known for their solid reputation and regulatory compliance, provide a platform for Muslim investors to engage in various financial instruments without compromising their religious beliefs. While these accounts offer distinct advantages such as no swap charges and fair profit distribution, potential limitations, including the absence of leverage and higher costs, must be carefully considered.

More trading related content


What types of financial instruments are commonly allowed in Islamic trading accounts?

Islamic trading accounts commonly allow trading in stocks, currencies, indices, commodities, and ETFs provided they adhere to Sharia principles.

Do Islamic trading accounts provide educational resources for beginners?

Yes, many brokers offering Islamic accounts provide educational resources to help beginners understand the principles and nuances of Islamic finance.

Are there any restrictions on short-selling in Islamic trading accounts?

Short-selling is generally prohibited in Islamic finance. Therefore, Islamic trading accounts may not permit this practice. Traders should be aware of alternative strategies.

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