Swap free account
Family IV · Costs
Not to be confused with swap fee, swap, forex account.
Swap-free account is a trading account in which the usual overnight financing adjustment on open positions is removed. Instead of a credit or debit based on the interest-rate differential between the two currencies, the broker applies its own alternative charge. The exact form of that charge, and which instruments it covers, varies by broker and by regulator.
How the overnight charge is replaced
In a standard account, holding a position past the daily rollover point produces a swap: a credit or debit calculated from the interest-rate gap between the two currencies, plus the broker's markup. A swap-free account removes that calculation. The broker substitutes a different cost, commonly a fixed fee per lot per night, a flat administration charge, or a wider spread on the affected instruments.
Because the substitute is set by the broker rather than by market interest rates, it does not change direction with the rate differential. It is usually a cost to the trader, not a credit. Some brokers apply the charge only after a grace period of several nights; others apply it from the first night.
Worked example: fixed nightly administration fee
A trader holds one standard lot of a major currency pair for five nights in a swap-free account. The broker charges a fixed administration fee of USD 8 per lot per night instead of a swap.
The USD 40 is deducted from the account balance. In a standard account the same position might have produced a swap credit or debit depending on the rate differential; in the swap-free account the cost is fixed and known in advance.
Availability and restrictions
Swap-free accounts are often offered under terms that vary by broker, country and regulator. Common restrictions include:
- Eligibility limited to clients of certain religious or regional backgrounds, sometimes requiring documentation.
- Exclusion of specific instruments, such as exotic currency pairs or metals, from the swap-free treatment.
- A maximum holding period after which the standard swap is reinstated.
- Higher minimum deposit or different leverage terms compared with a standard forex account.
Because these conditions are set commercially, they should be checked in the broker's own terms rather than assumed.
Often confused with
- swap fee
- A swap-free account removes the standard interest-based rollover and replaces it with an alternative charge, whereas a swap fee is the standard interest-based rollover charge itself; the visible sign is whether the overnight line is labelled as a swap or as an administration fee.
- swap
- A swap-free account is an account type that excludes swap, while swap is the overnight financing adjustment applied to positions in a standard account; the visible sign is the presence or absence of a swap line in the account statement.
- forex account
- A forex account is a general trading account that may or may not charge swap, whereas a swap-free account is defined specifically by the absence of swap and the presence of a substitute charge; the visible sign is the account label and the overnight cost line.