Rollover Free Accounts and Its Benefits

Usually, the forex brokers earn money from commissions and interests. The interest incurs mostly for keeping the positions open overnight, which is named rollover fees. However, some traders don’t deal with interest due to religious belief. And that’s why, despite having the interest, they keep themselves away from forex trading. Getting these traders involved with forex trading, brokers bring out rollover free accounts, which is actually an interest-free account for an overnight position. You may find some brokers calling it swap-free accounts.

However, some traders may wonder about swap-free or rollover free accounts. This article will enlighten you about the rollover and all the relevant trading information.

Basics of Rollover Fees

It is an incurred charge imposed by the broker to the traders who hold the position overnight or long-term. It is also known as swap-free because the charges are calculated as the difference of the interest rates of two currencies you are going to trade. However, the rollover fees also depend on your holding position, whether you are going for long or short.

Besides, the order types are also considered while calculating the interest or swap fees. So, you may face different swap rates for buying and selling. However, different rates support that swap is not the interest rate always.

Rollover Free Accounts

In simple words, rollover free accounts are a type of forex trading account which don’t charge rollover fees. It may impose a fixed charge, which is not the interest rate. However, it is also named as swap-free accounts. Not all traders can use rollover free accounts. Only the traders who have contradictions with interest charges because of the religion are allowed to apply for a rollover free account. So, to our knowledge, Muslims can get the opportunity to open a rollover free account.

However, Muslims are not forced to open this kind of account; they may open regular accounts too. But if anyone wants to open swap-free accounts, they will have to prove the reasons.

Rollover free accounts will not restrict you from getting all the regular account’s benefits. So, you can open a rollover free account with MetaTrader 4 forex brokers as well as MetaTrader 5 forex brokers.

Rollover Free Accounts Features

This type of account will get you all the regular account’s benefits along with some extra features. On top of that, the associated risk will be lesser. The features you may like are-

Length of the position

Unlike the regular account, a rollover free account never charges any interest if any trader holds a position overnight. Although you will not get charged for any interest, you will have to pay some fixed commission, which is beneficial for you if you want the position for several days.

However, you may keep a position open for 3-10 days via rollover free accounts.

The charges may depend on the broker’s policy; it could be fixed or variable.

Trading Condition

Apart from the swap-free offerings, brokers may impose their customized conditions, which may vary from broker to broker. In addition to that, brokers may have some offerings for the swap-free account holders via their regular accounts.

So, it is better to know the offerings before signing up with a broker, which will eventually guide you to make a decision whether you want to open an account with them or not.

Islamic Traders

If you see all the core offerings of this account tapes, you will find that these are made with keeping the Muslims in mind. In a word, swap-free accounts are mainly created for Islamic traders. But traders cannot open a swap-free account out of anywhere. They will have to prove their identity as Muslims to open the account.

Commission

Brokers won’t charge any interest doesn’t really mean that they will provide the service for free. Brokers will change some fixed or variable amount as overnight commission. However, the commission is much lower compared to the rollover fees, though it depends on the broker’s policy.

Some brokers may impose a fixed rate when it comes to the commission charges, while some brokers may offer variable rates for several days of holding.

Moreover, charges also depend on some trading factors such as trading lot size and pair types, but the interest rates are not considered while imposing charges.

Advantages of Rollover Free Accounts

Usually, the rollover fees work positively or negatively on some currency pairs, which are beneficial and harmful for the trader depending on the situation. So, if the rollover is positive¸, you will earn money. But, if it’s negative, you will have to pay against the currency.

On the contrary, a rollover free account won’t incur such a positive or negative situation. But the trader may need to pay some commission regardless of your gaining or loss. Usually, the best forex brokers that offer swap-free accounts practice this.

The brokers charge the rollover fees if the holding time of position crosses the 5:00 pm of the business day, which makes the trader pay the overnight charge. On the other hand, the rollover free accounts don’t act like that and don’t charge any extra money for holding your pairs. Instead, you may keep the position open for up to ten days with a fixed charge.

Options traders get the full benefits of this type of account as they may apply the long-term strategies peacefully. Besides, options traders can keep the position open up to a month with the help of a rollover free account. 

These types of accounts are also beneficial for hedging and carry trade strategies, and a trader can hold the currencies to make money through a fixed commission.

Conclusion

Although the rollover free accounts are available for a certain type of customers, which also offer some extra benefits, the traders will have to comply with the requirements to open the account. However, it is essential to check out the policies of the broker before you open the account. Besides, we also recommend seeing some forex broker reviews to know more about the broker.