Forex trading is not only for non-Muslims but also for Muslims. The traditional Forex account is not according to sharia law (Islamic law) due to the charge of overnight swap fee. The regular Forex account normally charges an amount of fixed interest when the traders hold a position overnight. The charge or receive of a fixed rate of interest are based on the cost of borrowing the pair of currencies, although many brokers include additional costs to cover the cost of financing an overnight position. You should understand that charging of overnight swap fee will breach the sharia law (Islamic law) because of this reason the regular Forex account is strictly prohibited for Muslims.
An Islamic Forex account
The Islamic (or halal, Sharia, Muslim) Forex account are specially designed for the people who do not wish to pay or receive fixed interest (or any) when trading the Forex market. The Islamic Forex does not even pay the interest on the amount deposited with Forex broker although some brokers may offer bonuses just to maintain the funds in the trading account.
Difference between Islamic accounts and regular accounts
Actually, the Islamic accounts are just as the regular accounts but the Islamic account is free from the interest payment or receivable. The interest is prohibited in Islam because the Muslims cannot give something expecting a return but they should give for the sake of giving so this is why it is prohibited. As per the law of Islam i.e. not to take or give interest so the Islamic Forex accounts are designed on that basis.
Eligibility for the Islamic accounts
Some of the brokers may ask for the evidence for the trader to prove him or herself as Muslims, but actually, the belief of a religion is not something that people would play for so some broker just accepts them as they convey (no evidence required). The terms and condition include that any breaching activity to this no interest policy will be immediately taken into action and appropriate charges will be reinstated.
Halal accounts or Islamic accounts are not ‘new’
The zero interest accounts are not something new and the Forex brokers have been offering this kind of services for many years. Actually, Muslim accounts have become popular and it has become something that people seek for. The Forex brokers have been providing these accounts by fulfilling the requirements of the Muslims and upon the request too. But unfortunately, in the field of finance, no one can escape from the interest charges so the bitter truth is even the Muslim get included in it at some point of their life.
Summary- the Forex market is not limited to the certain group such as for the non-Muslims alone, so you should be glad if you are a Muslim. The Islamic Forex accounts are offered by abiding by the sharia law of Islam. So as Muslims, you do not have to pay or receive interest if you trade via the Islamic accounts, so remember even if you are a Muslim you can still trade the Forex market. Actually, the Muslim traders are way successful than the non- Muslim traders.