Swap-Free Account

A swap-free account is a trading account where overnight rollover fees (swap)—incurred from holding an open position into the next trading day—are neither debited nor credited. It is typically offered to comply with Islamic Sharia law, which strictly prohibits usurious interest (Riba).

In standard accounts, swaps are calculated based on the interest rate differential between the two traded currencies or the cost of financing the position. In swap-free accounts, however, these charges are entirely waived or occasionally replaced with fixed administrative fees.

Characteristics of this account type:

• No overnight interest: Neither credited to nor debited from the trader.
• Potential alternative fees: A fixed commission or administrative fee may be charged instead of swaps on certain instruments.
• Widespread availability: Offered by most brokers to accommodate the requirements of a broad base of traders.

This account type is well-suited for traders who hold positions for relatively long durations, as the absence of rollover fees reduces the total cost of maintaining the trade. A common misconception is assuming that this type of account is entirely free of all costs, whereas spreads and standard commissions still apply as usual.

A swap-free account can be opened with brokers such as EVEST under conditions similar to standard accounts regarding available trading hours, as this account type does not affect market opening or closing times, but simply eliminates overnight rollover fees. Account specifications vary across brokers regarding the instruments eligible for the exemption and the grace period permitted before alternative administrative fees are applied to certain long-term positions. A key advantage of this account type is its compliance with Islamic Sharia principles that prohibit usury, alongside its suitability for traders using long-term strategies that require holding positions open for days or weeks without concern over accumulating swap costs. Its risks or limitations include the potential imposition of alternative administrative fees on certain assets after a specified timeframe, as well as the standard presence of other costs such as spreads and commissions. A common misconception is assuming this account is entirely cost-free, whereas the exemption strictly applies to rollover fees alone. This account type is directly linked to the forex market, where swaps represent one of the primary costs of carrying currency positions overnight due to interest rate differentials between the traded currency pairs.