A forex banking license lends higher credibility. You can also enjoy various advantages when you join forex brokers with banking licenses.

Best Forex Brokers with Banking Licenses

Forex brokers with banking licenses have been all the rage recently. A forex banking license lends higher credibility to a financial institution, providing it with better brand recognition and trustworthiness in the eyes of potential clients.

Here are some of the best forex brokers with banking licenses:

  1. Barclays: Provides cross-asset trading through an exclusive trading platform, BARX.
  2. Dukascopy: The most popular forex broker with a banking license.
  3. Citibank: One of the main choices for retail traders since 2009.
  4. IG Group: One of the biggest brokerage companies in the UK.
  5. Saxobank: A fully licensed bank that is better known as a forex broker.

 

Decoding the So-called "Forex Banking License"

Banking institutions play a vital role in the forex market. Banks by themselves are licensed to serve as a middleman between the buyer and the seller in forex trading. Banks traditionally also provide their customers with a variety of services, such as currency exchange, forex saving deposits, and custodians of forex trading accounts.

Following the development of advanced financial technology, many investment banks seek additional licenses to offer their own proprietary forex trading platforms. On the other hand, forex brokers may seek banking licenses to complement their group's businesses and in order to expand their customer base.

There are very few forex brokers with banking licenses compared to the ones without this prestigious status. Nevertheless, each has different circumstances.

We can classify the so-called "forex banking license" into three categories:

  1. Traditional investment banks provide services for their clients through proprietary trading apps while maintaining regular banking services, such as Barclays and Citibank.
  2. Financial institutions initially licensed as banks but then became popular as forex brokers instead, such as Dukascopy and Saxobank.
  3. Financial groups initially operated as forex brokers but then obtained banking licenses through acquisition or other means, such as Finam and IG Group.

 

Overview of the Best Forex Brokers with Banking Licenses

Here is further information on brokers with banking licenses. Each of them is carefully picked to represent all three categories that have been previously discussed.

 

1. Barclays

Through its cross-asset electronic trading platform, BARX, Barclays provides access to 450+ currency pairs (including exotics). The platform also offers cutting-edge features, including real-time market data, innovative pricing models, charting tools, advanced algos, and customizable trading techniques. BARX does not specify certain amount of minimum or maximum deposit requirements, but maximum leverage is restricted up to 1:100, and the minimum position size is 50,000 (0.5 standard lot).

 

2. Dukascopy

Dukascopy might be the most popular forex broker with banking licenses, because they have been providing services for retail traders since 1998. While other banks mainly work with corporate clients and high-cap individuals, Dukascopy offers trading services with minimum deposit requirements of $100.

Dukascopy | Specifications | Review | Testimonials (20) | News (15) | Contests (2)
Review Start Trading
Website
www.dukascopy.com
Established
1998
Leverage
1:200
Min Deposit
$100
Regulation
FINMA, FCMC (Latvia), FSA (Japan), DFSA (Dubai), ESMA
Key Features Extensive Review
Bonuses
PAMM
Personal manager
Trading contests
Segregated accounts
Managed accounts
Trading by phone
Skrill
Wire transfer
Neteller

Founded in 2004, Geneva-based Dukascopy Bank offers trading spots, including forex, metals, binary options, CFDs on bonds, commodities, indices, stocks, ETFs, and cryptocurrencies through the same platforms. After the development of the Swiss FX Marketplace, Dukascopy acquired a Swiss banking license in 2010 and launched Dukascopy Bank.

They try to provide trading services based on the following main principles: equal trading rights and a transparent pricing environment. Dukascopy is licensed in Switzerland through the Swiss Financial Market Supervisory Authority (FINMA) and in the EU through the Financial and Capital Market Commission of Latvia (FCMC).

This ECN-Marketplace represents the advanced generation of liquidity aggregators in the industry. Dukascopy has a unique technology to hedge instantly any clients' trades directly with other liquidity providers. The company is currently connected to Bank of America, Commerzbank, Nomura, Barclays, Currenex, Deutsche Bank, JP Morgan, and other liquidity providers.

All trades are usually executed in milliseconds. Dukascopy offers the deepest source of liquidity in the industry resulting in tight spreads.

Opening an account in Dukascopy would allow you to trade in its proprietary platform called JForex, which can be accessed by desktop and mobile. In desktop experience, traders can get several features including hundreds of indicators, advanced charting, historical testing, real-time news, and embedded customer support.

On the other hand, customization is weak as there are no pop-out charts or built-in complex desktops and watchlists. The web version of the Java-based software triggers security warnings in Chrome and other browsers, while JForex mobile versions allow easy syncing between platforms.

Not only JForex, trading in Dukascopy also offers access to MetaTrader 4 platform that is appreciated by many traders around the world. It has main features such as expert advisors and customizable templates.

Furthermore, Dukascopy provides two types of accounts including Mobile Current Account (MCA) and Standard Current Account (SCA). For private use, traders can choose both account types. But for business use, SCA is more suitable. The minimum acceptable order size is 1,000 units of the primary currency.

Depending on Dukascopy services used by the clients, commissions may apply. Commissions and spreads are calculated through a declining tier system, with clients categorized by monthly trading volume and net deposit.

Dukascopy has won several awards including Best Forex Trading Apps 2019, Best Platform & Tools 2018, and Best Mobile Trading. Besides, the company also gets awarded as Best Forex Bank 2018 by China (Shenzhen) Forex Expo, Best Forex ECN/STP Broker 2018 by London Forex Show, and Best Provider of Liquidity 2017 by IAFT Awards.

Traders will get multiple ways of funding account, including credit and debit cards, wire transfers, and bank transfers. Each client is protected up to CHF100,000 against the insolvency risk of Dukascopy Bank. However, Dukascopy charges a $20 fee in addition to possible bank or credit card charges for withdrawals.

Dukascopy's clients have the opportunity to get more profit through bonus programs, including Equity Bonus, Discount Program, Experience Sharing, and Anniversary Bonus.

The minimal deposit size of the account with Dukascopy Europe is $100, while the minimum for Dukascopy Bank SA is $1,000. Deposits accepted in 23 currencies. Several additional features are available depending on the clients' profile and the type of account.

Dukascopy Bank provides a wide range of free financial information and other attractive resources through its website, Dukascopy TV online television, Freeserv products, and its active online Dukascopy community that hosts over 130,000 members. Based on the review of their clients, product sections and trading platforms point to limited "how-to" articles and videos about forex, CFD, indices, and cryptocurrency trading venues.

The members of Dukascopy may exchange in several languages on trading experiences, market views, trading strategies, may win prizes in various contests, and freely communicate through advanced and secure chat and video conference systems developed by Dukascopy.

The company provides a 24/6 support team through phone and live chat. Traders also can send questions via email. They maintain active social media portals as well as a dedicated support forum for JForex and automated trading.

Overall, Dukascopy is suitable for the highly experienced and high-volume traders. Higher than average trading costs could undermine beginner and retail accounts, who may have to look elsewhere for building skill levels due to weak educational resources.

 

3. Citibank

Citi was one of the biggest forex dealers worldwide several years ago. They rank lower recently, but the CitiFX Pro platform has been one of the leading choices for retail and small institutional traders since 2009. CitiFX Pro provides access to at least 130 currency pairs with settlement in the customer's base currency, advanced order management tools, and one-click trading. A standard account requires a deposit of at least $10,000.

 

4. IG Group

IG Group started as a spread betting business in 1974 and grew to be one of the largest brokerage firms in the UK. It is listed on the London Stock Exchange and is well-regulated with multiple licenses from various regulatory bodies. IG Group currently consists of various subsidiaries, including IG Bank, which is authorized and regulated by FINMA (Switzerland). IG Bank has no minimum deposit requirement.

IG | Specifications | Review | Testimonials (20) | News (46) | Articles (46) | Bonus (1)
Review Start Trading
Website
www.ig.com
Established
1974
Leverage
1:50
Min Deposit
$0
Regulation
FCA, 195355, CFTC/NFA, 0509630
Key Features Extensive Review
Accepts US traders
Free education
Wire transfer

IG Markets is an online trading provider with decades of experience in the financial market. Founded in 1974, the world-leading company has gathered more than 178,000 clients worldwide with over 16,000 markets reached as of 2019. IG Markets is authorized and regulated by the Australian Securities and Investment Commission (ASIC). It is also important to note that being established in 1974 makes IG Markets one of the forefront online CFD brokers. Their service has expanded to 15 countries across five continents.

Aside from famous for its reliable experience, IG Markets is also known for its truly broad range of trading instruments. In fact, the broker has long been regarded as one of the most accomplished companies in offering the most trading assets to clients. The wide choice of instruments includes forex pairs, 26 indices, over 12,000 shares, hard and soft commodities, cryptocurrencies, as well as other markets such as bonds, rates, and options.

Forex trading in IG Markets is provided in two ways: CFD and DMA (Direct). Here are the conditions for each type of trading:

Forex CFD

  • Minimum spread: 0.6 pips
  • Commission: None
  • Platforms: Web, mobile apps, MT4, ProRealTime, L2 Dealer, terminals and APIs
  • Trading size: Contracts
  • Demo account: Yes

Forex DMA

  • Minimum spread: No details
  • Commission: from $10 per $1 million traded
  • Platforms: Web, mobiles apps, L2 Dealer, terminals, and APIs
  • Trading size: Lots
  • Demo account: No

Both ways of trading are available for all clients. However, DMA does not enable trading in MetaTrader 4. Clients are also not allowed to trade in a demo account for virtual trading. It is essentially a type of trading reserved for experienced traders with high necessity for the best pricing in the market, as DMA offers market depth from a range of exchanges (including full market depth from the LSE).

Trading platforms in IG Markets are accessible via web, mobile app, and desktop. They are offered with 2 main varieties: Core Platforms and Specialist Platforms. The core platform is meant for all types of trading with the add-ons of DMA, ProRealTime access, and Forex Direct. Meanwhile, Specialist Platforms consist of L2 Dealer, ProRealTime, and MetaTrader 4.

The first two platforms charge fees that include minimum $2000 balance and monthly fees for shares data and level 2 prices (for L2 Dealer), as well as platform fees amounting to $40 per month and monthly fee for shares data (for ProRealTime).

IG Markets does not require a minimum balance to open an account. It also provides a swap-free account that frees clients for any interest, rollover, or swap charges on overnight positions. Yet, All costs and charges are built into the spread. This account suits well with long-term traders who need to keep their positions open for days or even weeks.

For beginners, IG Markets builds an IG Academy that gives interactive education and online trading courses. This way, clients can get a grip on the financial markets with the essentials of trading provided in infographics, video explainers, and end-of-course quizzes. Even better, the IG Academy is already integrated into its mobile app so clients can always learn about financial markets in much more efficient ways.

In conclusion, IG Markets is a client-friendly broker with more than 40 years of experience to back up its credibility. Their efforts and commitments to provide the best varieties of trading platforms are proven in the unique Core and Specialist Platforms.

Traders with little experience can apply to Forex CFD account in either Core Platforms or MetaTrader 4, while professionals can achieve the best experience in the financial market with IG Market's DMA trading and L2 Dealer or ProRealTime platforms.

 

5. Saxobank

Saxobank is incorporated in Denmark as a fully licensed bank. However, they are better known as a forex broker and liquidity provider. Some of the most popular forex brands were established as white-label products of Saxobank, including certain services from CitiFX Pro. Saxobank requires a minimum deposit of $2000 for an entry-level trading account.

Saxo Bank | Specifications | Review | Testimonials (6) | News (44) | Articles (1) | Bonus (1)

 

Advantages of Forex Brokers with Banking Licenses

There are a number of advantages when you join any forex broker with banking licenses, including:

  1. You can avoid dubious entities because offshore companies are not usually formally authorized as both a bank and a forex broker at once. To be a forex broker with a banking license, one usually has to be registered in the US, UK, EU, or Russia.
  2. Banks are required by law to disclose all information about their capital, organizational structures, assets, and debts. They also had to safely pass a stress test set by the central bank. As such, your funds are relatively more protected from second-party risks. Banks can go bankrupt and deceive you just like other financial institutions, but the existence of a banking license significantly reduces the likelihood of financial insolvency and fraud.
  3. Banks themselves are key participants in the forex market. They do not have to rely on other entities as liquidity providers, so they can offer the best trading conditions and minimum spread for forex traders.

So, are you interested in opening an account with this type of forex broker? Take your time to think it through, because there are also several drawbacks, such as higher initial deposit requirements, lower maximum leverages, and relatively more complex registration and transfer payment procedures.

Make sure that you are ready to fulfill all the terms and conditions. Carefully prepare all the documentation you may need for account registration. Feel free to request a consultation with their customer support department whenever you need it.

 

Aside from brokers with banking licenses, you could also find other prominent brokers to trade with in "Top 10 US Brokers for Day Trading".