eToro Islamic Account Review

eToro is a global investment platform best known for social and copy trading. For traders who need to avoid interest, it offers a swap-free account, often searched for as the eToro Islamic account. Instead of overnight swaps, this account charges administrative fees once a grace period ends.

In this eToro Islamic account review, we explain who can open the swap-free account, how its administrative fees work, which positions they apply to, and how it compares with other options.

55% of retail investor accounts lose money when trading CFDs with this provider.
Terms and conditions apply. Subject to regional availability.

Understanding Islamic Trading Accounts

Islamic finance prohibits paying or receiving interest (riba), and also discourages excessive uncertainty (gharar) and gambling (maysir). In standard trading accounts, positions held overnight are charged or credited a swap, which is based on interest rate differences, so many Muslim traders look for Islamic accounts that remove swaps.

Removing swaps addresses the interest element, but whether leveraged CFD trading is acceptable more broadly is a question scholars answer differently. Our article on whether forex trading is halal explains the main views, and we recommend consulting a qualified Islamic scholar if you are unsure.

How the eToro Swap-free Account Works

eToro presents its offer as a swap-free account rather than a Sharia compliant account. According to eToro's Help Center, its swap-free accounts do not charge or pay interest on positions held overnight and are subject to administrative fees instead, which may suit clients who need a zero interest account for religious reasons or personal preference.

Swap-free accounts are available to clients registered under eToro (ME) Limited, regulated by the Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market in the UAE, or eToro (Seychelles) Ltd, regulated by the Financial Services Authority Seychelles. eToro's Help Center explains how to check which entity your account is registered with.

How the Administrative Fees Work

According to eToro, administrative fees are fixed daily charges per unit for CFD positions held overnight in swap-free accounts. They are calculated per lot or exposure amount depending on the asset, and applied proportionally if your trade is smaller or larger than the standard lot size.

Fees start once a seven day grace period ends. In practice, if you open a position on Monday, administrative fees start the following Monday. Only weekdays count toward the grace period, and only if your position is still open at 22:00 GMT. One weekday each week counts as three days to cover the weekend: Wednesday for currencies, gold, silver and platinum (Thursday for pairs with TRY), and Friday for indices, stocks, ETFs, oil and other commodities. Crypto CFDs are the exception: every day counts, including weekends, and there is no triple day.

eToro Administrative Fees by Asset

When we checked eToro’s Swap-Free Accounts Fees, the daily administrative fees after the grace period were as follows. 

In practice, a 1 lot (100,000 units) EURUSD position held past the grace period costs $10 per day and $30 on Wednesdays. A 50 unit gold position costs $10 per day and $30 on Wednesdays. A $2,000 exposure on a stock CFD opened with x2 leverage costs $0.60 per day, since the fee is $3 per $10,000.

Oil, natural gas and some industrial metals also carry a daily spot price adjustment based on futures prices, which can be a charge or a credit depending on the direction of your trade. eToro notes that fees can change without prior notice, so check its fees page for the current rates before holding a position past the grace period.

Positions Without Administrative Fees

Administrative fees do not apply to positions backed by the underlying asset, such as real stocks, ETFs and crypto that you own, or to short and non leveraged positions on stocks and ETFs. Commodities traded as futures contracts are not charged administrative fees either. For Muslim traders who prefer to invest without leverage, buying real assets on eToro avoids administrative fees, although other eToro fees may still apply.

Pros of the eToro Swap-free Account

• No overnight interest: No swaps are charged or paid on overnight positions.
• A full week before fees: The seven day grace period is longer than at most brokers that charge admin fees.
• No administrative fees on real assets: Unleveraged positions in real stocks, ETFs and crypto are not charged administrative fees.
• CopyTrader and eToro tools: Swap-free clients can use eToro's copy trading, TradingView charts and eToro Academy.

Cons of the eToro Swap-free Account

• High minimum deposit: The $1,000 minimum is much higher than at most other brokers with Islamic accounts.
• Daily fees after the grace period: Leveraged and CFD positions held for longer than a week incur fixed daily administrative fees.
• Status can be revoked: eToro can remove swap-free status at any time and without prior notice if it decides the account no longer meets its criteria or is being misused.

How to Open an eToro Swap-free Account

1. Register: Sign up for a real account on eToro with your personal details.
2. Deposit at least $1,000: Fund your account using one of eToro's payment methods, such as a bank transfer, card or electronic wallet.
3. Verify your account: Upload proof of identity and proof of address, and verify your phone number.
4. Check your entity: Confirm that your account is registered under eToro (ME) Limited or eToro (Seychelles) Ltd, as swap-free accounts are only available under these entities.

About eToro

eToro was founded in 2007, is listed on Nasdaq under the ticker ETOR, and reports more than 40 million users worldwide. It is one of the best known multi asset platforms, with its own CopyTrader feature for copying other investors. It offers thousands of instruments, including real stocks, ETFs and crypto as well as CFDs on currencies, indices and commodities.

The swap-free account is offered through eToro (ME) Limited, regulated by the FSRA of the Abu Dhabi Global Market in the UAE, and eToro (Seychelles) Ltd, regulated by the Financial Services Authority Seychelles. The protections you receive depend on the entity that holds your account.

Final Verdict

eToro's swap-free account suits eligible traders who want to avoid overnight interest together with eToro's copy trading and real asset investing. The seven day grace period is generous, and unleveraged positions in real stocks, ETFs and crypto avoid administrative fees altogether.

The main limits are the $1,000 minimum deposit and the daily fees on leveraged or CFD positions held for longer than a week. eToro also presents it as a swap-free account rather than a Sharia compliant one. If any of these rule eToro out, compare the other options in our guide to the best Islamic forex brokers.

55% of retail investor accounts lose money when trading CFDs with this provider.
Terms and conditions apply. Subject to regional availability.

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