In the forex and CFD markets, more and more traders are choosing swap-free accounts, especially in conditions of increased volatility and changing interest rates. Initially, financial institutions developed such accounts as a tool for Islamic trading. By 2025, traders—including those without religious motivations—are increasingly adopting them as a universal solution for long-term strategies. But how effective are they over time?
What is a swap-free account?
Swap-free (or Islamic) account is a trading account where the broker does not charge or write off swaps for transferring a position to the next day. That allows you to avoid additional costs, especially noticeable when holding positions for a long time.
In classic accounts, a trader can receive or pay a swap depending on the direction of the position and the interest rate of the currencies in the pair. In the case of a swap-free account, the fee is compensated in a different way – for example, by a fixed commission or restrictions on instruments.
Benefits for long-term traders
1. Predictable costs
Unlike traditional accounts where swap rates vary daily, with a swap-free account traders know exactly how much they’ll pay to hold a position. That is critical for those who hold transactions for weeks and months, especially in unstable periods.
According to FX Intelligence, about 38% of long-term traders used swap-free accounts in 2024 precisely because of the stable commission conditions.
2. Elimination of negative swap
For many currency pairs, especially emerging market ones (for example, USD/TRY), long positions often come with a negative swap. A swap-free account helps avoid these costs, increasing your potential profitability.
3. Complies with Islamic principles
While the religious aspect may not be relevant to everyone, it is pivotal to note that many traders choose such accounts to follow Shariah principles. The question of how to buy Tesla stock in an Islamic context is also discussed in Halal compliance, making it paramount to choose the right trading structure.
4. Flexibility of tools
Modern brokers (for example, IC Markets, Exness, AvaTrade) allow trading on swap-free accounts not only in currencies, stocks, indices, and cryptocurrencies. That provides ample opportunities for building a long-term portfolio.
Limitations of swap-free accounts in long-term trading
1. Fixed commissions
Brokers often compensate for the refusal of swaps with a special commission for each day of holding. In the long term, such a commission may be higher than a classic swap. That is especially true when trading crosses or CFDs on shares, where the calculations are more complex.
IG Group’s Q1 2025 report states that fees on swap-free accounts for some instruments can be up to USD 7 per day per lot, which reduces profitability when held for a long time.
2. Restrictions on tools
Some brokers restrict access to definite instruments on swap-free accounts. That may concern stocks, cryptocurrencies, or less liquid pairs. For a trader building a complex long-term portfolio, this creates inconvenience.
3. Suspicion of “abuse”
If a trader uses an Islamic account without a religious motive, the broker may impose sanctions or transfer it to a regular account. This is especially true for automated strategies and arbitrage schemes.
Practical cases
Case 1: Long-term trading on EUR/USD
A trader holds a long position on EUR/USD for 90 days. On a regular account, he would pay $4–5 in swap per day, which would amount to about $400 over the entire period. On a swap-free account with a fixed commission of $2/day, the expenses would amount to $180, increasing the net profit.
Case 2: Investing in CFDs on Stocks
By holding a long position on a Tesla CFD on a swap-free account, a trader avoided swaps, but the broker charged a commission of $0.5/day. By holding the position for 120 days, the costs were $60, which was more profitable than the standard interest calculation of $0.9/day.
Case 3: Institutional Portfolio in an Islamic Jurisdiction
A Malaysian fund uses swap-free accounts to build a multi-asset portfolio that complies with AAOIFI standards. It allows it to include Forex and CFDs on Western assets, including Tesla, Apple, and gold, without violating religious restrictions.
Conclusion
A swap-free account is an effective tool for long-term trading, especially in the context of high interest rates and an unstable currency market. It ensures the predictability of expenses, allows you to work within the framework of Islamic financial ethics, and expands the possibilities of the strategy.
However, such accounts also have limitations: fixed commissions, a limited selection of instruments, and potential sanctions from the broker if abuse is suspected. For maximum efficiency, traders should carefully study the broker’s terms and calculate the cost of holding positions, taking into account all factors.
For those who are building long-term portfolios or looking for an alternative to classic swaps, a swap-free account can be a balanced solution. But as in the question of how to buy tesla stock, it is important to first understand the details of the instrument before making a decision.
