Like any other broker providing the best service for retail traders, OANDA offers a swap-free account with competitive features. What are they?
OANDA is one of the most popular regulated forex brokers in the world that caters to the trading needs of a significant number of traders. OANDA offers five different account types with each of them having specific features and benefits that set them apart. The five account types are Standard account, Core account, Premium account, Premium core account, and Swap free account which will be the focus of this article.
By definition, a swap-free account is a type of account that is designed for traders that are of the Islamic faith and it has a fixed fee rather than a swap. The fee is not an interest and it is dependent on the direction of the order initiated by the trader.
The OANDA swap-free trading account is an account type for traders that do not want to pay or receive overnight swaps or interest on their executed trades. For traders to access the OANDA swap-free trading account, they will need to open a standard account after which they can request a switch to a swap-free account.
What differentiates the OANDA swap-free account from its other types of accounts? Operating a standard account means the trader is likely to be charged or credited swap or interest on any open leveraged positions that the trader maintains till the end of each trading day. These costs are referred to as overnight fees, otherwise known as swap fees. This is where the swap-free account comes in as it is ideal for traders who do not wish to be charged the swap or interest.
Features of OANDA Swap-free Account
The swap-free account allows traders to take a position on 26 financial instruments that are quite popular including forex pairs and indices like EUR/USD, the UK 100, and Germany 40. The table below further describes the main features of the OANDA swap-free account.
| 🔢Minimum EUR/USD spread | 1.6 pips |
| 💹Maximum trade size | 10 million |
| 💸Commission | $0 |
| 💲Account base currencies available | USD |
| 📊Scalping allowed | ✅ |
| 💱Hedging allowed | ✅ |
| 🤖EAs allowed | ✅ |
Trading on a swap-free account does not incur any administration charge for the first five days that the trade remains open. However, from the sixth day, the administration charge starts getting applied for each day that the trade continues to stay open until the trade is finally closed. This takes weekends into account as well.
See Also: Beginner's Guide to OANDA Fees
The administration fee is charged per lot traded except for the Japan 225 index which is charged per 100 lots traded. The admin fee varies from one instrument to another, and the table below shows the 26 financial instruments available on the OANDA swap-free account with the corresponding minimum spread and admin fee charged.
| Financial Instrument | Minimum spread | Admin fee per lot in USD |
| GBP/USD, EUR/GBP, AUD/USD, USD/CHF, EUR/CHF, AUD/JPY | 1.7 pips | $7 |
| EUR/USD, USD/JPY | 1.6 pips | $7 |
| EUR/JPY, NZD/USD, USD/CAD | 1.8 pips | $7 |
| GBP/JPY | 2.2 pips | $7 |
| GBP/CHF | 2.3 pips | $7 |
| CHINA A50 | 12 pips | $4 |
| AUS 200, UK 100, FRANCE 40, EUROPE 50, US NAS 100 | 1.6 pips | $4 |
| US WALL ST 30 | 2.6 pips | $4 |
| HONG KONG 50 | 6.6 pips | $4 |
| GERMANY 30 | 1.7 pips | $4 |
| JAPAN 225 | 8.6 pips | $4 |
| US RUSS 2000 | 70 pips | $4 |
| SINGAPORE 30 | 3.6 pips | $4 |
| US SPX 500 | 1 pip | $4 |
For the record, the admin fee is charged daily starting on the sixth day of the trade. And for Japan 225, the fee is charged per 100 lots.
Opening a swap-free account at OANDA is quite straightforward and it does not take long to be approved so traders can start trading almost instantly. OANDA swap-free account does not require full account verification unless the gross account deposits exceed $9,000. Even though the number of instruments available is not as much as that of the other account types, the instruments are still among some of the popular instruments for trading.
Therefore, with a swap-free account, a trader can minimize trading costs while getting access to financial instruments with significant volume and liquidity. This allows them to have substantial opportunities to make profits without paying too much to execute their trades.
See Also: ASIC Broker List: Swap Free Edition
As earlier stated, swap-free is not the only account type offered by OANDA and traders will be given a chance to go through the features peculiar to each account type before making a choice. Nevertheless, the swap-free account offers a different kind of advantage that the other account types do not have. Thus, it might be worth checking out. For more details on OANDA broker, you can check the table below:
🌐 WebsiteTraders looking for brokers with accurate precision, OANDA can be an option. That is because OANDA is a broker that provides quotes with 5-digit accuracy and active price movements that follow market developments. Order execution speed is also faster in this broker.
It provides benefits for novice traders, as they can trade with smaller volumes using the calculation system based on currency value, unlike other brokers adopting the lot system.
Founded in 1996, OANDA was built by Dr. Michael Stumm who is a lecturer in Computer Engineering at the University of Toronto, Canada, along with his colleague, Dr. Richard Olsen of The Olsen Ltd., which is one of the leading econometric research institutes. They have a head office in San Francisco, United States.
OANDA branch offices can be found everywhere. Some of these offices are located in the United Kingdom, Singapore, Japan, and Canada. With this number of offices spread, OANDA has increasingly attracted the attention of clients worldwide.
OANDA's company is registered under several well-known jurisdictions in financial trading. They are regulated by CFTC and NFA in the US, FCA in the UK, ASIC in Australia, and many others. Traders do not need to worry anymore about security when trading in OANDA. However, these advantages make trading rules at OANDA more stringent compared to other brokers.
For example, OANDA only allows maximum leverage of 1:20, because the rules in the US and Japan do not allow leverage above that. Besides, the registration procedure is more complex due to various additional requirements that are not submitted by other forex brokers. On top of that, hedging is not allowed in one trading account as the client must open an additional account to hedge.
Nevertheless, OANDA is known for being a leading broker with many advantages offered. OANDA faces increased market risk during periods of price volatility, such as economic and political news announcements. When market spreads increase or decrease, their pricing engine widens or narrows spreads accordingly. That way, traders can get the latest conditions from price movements in the market more quickly.
Prices move very fast in the market. Especially when news releases have a large impact on market volatility. This condition is often exploited by brokers to take advantage of clients with Requotes. However, traders do not need to worry about additional costs when trading with OANDA.
The company never withdraws Requotes so traders can get maximum profit. When traders are unavailable to monitor open positions, they can set take profit orders to lock in profits and Stop Loss orders to help protect against further losses.
As an experienced and well-known online forex broker, OANDA is committed to maintain an efficient trading environment that reduces latency and provid tools to help clients manage the degree of acceptable slippage.
With a fast & reliable trading platform by OANDA, clients' trades are executed in 0.012 seconds. This suits traders who choose brokers based on execution speed.
Because of this exceptional execution service, it is not surprising that OANDA won many awards, including the winner of the world's Best Retail FX Platform at the prestigious e-FX awards. The broker is also voted number 1 for Consistency of filling trades at quoted prices, Execution speed, and Reliability of platforms.
There is no minimum deposit or minimum balance required to open an OANDA account. Deposit and withdrawal can be done easily. OANDA provides a variety of payment method facilities, including Paypal, Wire Transfer, Credit Card, and Debit. Traders can adjust it to the region where they live.
OANDA provides more than 100 trading instruments, including 71 currency pairs, 16 indices, 8 commodities (Brent Crude Oil, Copper, Corn, Natural Gas, Soybeans, Sugar, etc.), 6 Bonds, and 23 Metals.
The fxTrade and MetaTrader platform are available at OANDA. These platforms can be used for Desktop and Mobile. Another plus is they have an OANDA Technical Analysis that exists in collaboration with a technical analysis provider called Autochartist.
With these platforms, clients can monitor price movements easier and automatically recognize patterns created on charts, as well as receive alerts when the awaited patterns appear. Access to this technology can be enjoyed free of charge.
In conclusion, OANDA is an ideal broker for traders in need of fast execution backed by many years of experience. The company is also a good alternative for those looking for a well-regulated broker with flexible trading and deposit conditions.
15 Comments
Anthony
Jan 7 2023
Ahmad
Jan 7 2023
Kylian
Mar 6 2023
Anthony: Let me explain more about why Islam forbids swap. So, in Islamic finance, exchanging currencies with interest payments is not allowed because it goes against the concept of fairness and justice. Islam prohibits the earning of profit through exploitation or excessive interest rates, known as riba.
In a currency swap, two parties agree to exchange one currency for another at a specific rate and then reverse the exchange at a later time. In the conventional financial system, this often involves interest payments based on the difference in interest rates between the two currencies. However, in Islamic finance, interest-based transactions are not allowed.
Instead, transactions must be based on real economic activities, such as trade or investment, where profits are earned through productive activities. Therefore, currency swaps that involve interest payments are not allowed in Islamic finance.
Garfield
Jan 7 2023
Willie
Jan 7 2023
Garfield
Jan 7 2023
Willie
Jan 7 2023
Lalisa
Jan 31 2023
Swap-free accounts are generally chosen by Muslims and are often referred to as Islamic accounts in general. This is because Islamic sharia law prohibits interest-bearing business transactions; Swap is considered the same as usury because it is taken from the difference in interest. Therefore, not a few Muslim traders prefer this type of account. However, it is not uncommon for many traders to choose this account even though they are non-Islamic.
although for a limited number of instruments to trade using this Swap Free account. For me, this is enough for trading, and the instruments included in this trading account are also popular and widely used by traders.
By using this account for trading on Oanda, I can eliminate the swap risk that arises if I trade with overnight positions, because I also have to take into account negative swap risk in risk management. Instead of being burdened with that risk, it will be much easier for traders to be free from Swap.
Patrick
Jan 31 2023
Lalisa Indeed, I like swap-free accounts because that includes trading costs, right? At OANDA Swap or what is commonly called fees are calculated per position and can be either a fee or a credit to your account, depending on whether you are in a buy/long position or a short/sell position. and also Swap fees are charged if account positions are left open overnight later than 17.00 ET.
for me, fixed costs are costs be they swaps, spreads, and commissions. But it needs to be considered again, as a trader I also don't want to be limited. Now, the limited meaning here is that we cannot access all the instruments on OANDA and can only trade by choosing from 26 foreign exchange instruments and indices.
I prefer other accounts from OANDA because I can also choose a more varied instrument compared to this account.
Harrison
Jan 31 2023
Indeed, this account makes traders interested in trading, apart from being suitable for traders who do not want to pay or receive interest on their account, this account is also suitable for traders who often open positions overnight beyond the trading hour limit set by this broker. But there are also those who feel dissatisfied if they can only trade with 26 foreign exchange instruments and indices.
Well, as this article has explained, OANDA doesn't only have swap-free accounts. what I know is the Standard account, from my point of view, the two accounts are almost the same for the fee level. In your opinion, which of the two accounts is the right one? Please if anyone can explain which account is better of the two?
Finlay
Jan 31 2023
Harrison: Swaps are usually experienced by traders when there are trading positions that are opened staying up past midnight. The amount is calculated from the applicable bank interest rate and can change depending on the trading position and the pair being traded. In other words, a swap is an interest a trader has to pay. Swap-free means free from this kind of charge.
in Islam, Swap is said to be usury because it is taken from the difference in interest rates, therefore it is not uncommon for Muslim people to prefer this account. but there are also those who don't like it, the reason is simple they are afraid of losing profits from the swap.
The OANDA swap-free and standard accounts have several things in common, namely, they both offer commission-free trading, the lot order size is the same, namely 0.01 lot, and we can use all trading strategies on OANDA.
In my opinion, if you really don't like interest because of usury, a swap-free account is more suitable for you. but if you don't have a problem with that, I suggest choosing a standard account because there are more instrument choices than swap-free accounts as well as a complete platform for trading, compared to swap-free accounts which can only trade with the MT4 platform.
Ramos
Mar 6 2023
I'm not sure if it's true, but I've heard that some swap accounts charge higher spreads, commissions, and even triple commissions on Wednesdays. Additionally, some brokers may charge monthly administration fees for swap accounts.
It seems that the swap fees may have changed from being based on rates to being based on spreads or commissions. I've read comments suggesting that Islam prohibits swap fees, but I'm wondering if it's still forbidden if the fees have been changed to a different type. Can you clarify if this is allowed or not? Thank you!
Fernandes
Mar 6 2023
Ramos: Basically, in Islamic finance, you can't charge swap fees that involve interest payments (also called riba). However, if the fees have been changed to spread and commission, it all depends on the terms and conditions of the transaction. The transaction should be based on real economic activity and should be free from any exploitation or injustice. If the spread and commission are reasonable and justified, then it's okay. But if they're excessive or not justified, it could be haram. And the spread and commission that happen during the trading is justified and reasonable since the broker paid for your swap fees.
And about the triple Wednesday Swap, the reason for that is due to the settlement cycle for forex trades. Basically, forex trades are settled two business days after the trade is executed. But since forex trading is open 24/7, traders can hold positions open beyond the spot settlement date.
When a trader holds a position open beyond the spot settlement date, they are borrowing one currency to buy another. The swap fee is charged to compensate the lender for the interest that they would have earned if they had held the currency themselves. The triple swap on Wednesdays is charged to account for the fact that the spot settlement date falls on a weekend, so the swap fee is charged for three days instead of two.
Yugo
Mar 6 2023
Ramos: Dude, you have said that trading term such as spread and commissions that happen in swap free account can be different between standard account ans swap free account. I have seen too the article and it said to be charge $7 and the spread is start at 1.6 pips at EUR/USD currency pairs. So, basically the commission is free and changed into administration fees meanwhile at the standard account, spread based on the OANDA website is at 1.2 pips. It means the trading condition is heavier at commission.
About the pips itself, how exactly I need to paid?? is it $1,6 at the spread that start from 1.6 pips?? Sorry for my bad English
Salah
Mar 6 2023
Yugo: In forex trading, the value of a pip can differ depending on the size of your trading volume. Traders generally use three types of volume: Standard Lot, Mini Lot, and Micro Lot, which each have a different pip value.
For example,
Therefore, if you trade with one lot, a spread of 1.6 pips on the EUR/USD pair would cost you $16. However, if you trade with 0.1 lot, the cost would decrease to $1.6, and if you trade with 0.01 lot, the cost would be $0.16. Essentially, the higher the trading volume, the higher the spread's value will be.