Riba-free investment (Halal Trading Brokers)
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What is Riba-free Investment and Why it is Important
Online trading and investment are among the most profitable ways of earning money. Many people are pursuing this as a full-time career. Concerning its popularity, it has become essential to know the right way of performing trading activities following divine Islamic laws.
Many people are unaware of the fact that the majority of online trading platforms offer interest-based trading options. Leveraging interest is haram in Islam, and it's called riba. According to Islam, making an unjustifiable amount of profit by borrowing or lending money is a sin and Muslims should not leverage riba in any practice of their lives.
وَأَخْذِهِمُ ٱلرِّبَوٰاْ وَقَدْ نُهُواْ عَنْهُ وَأَكْلِهِمْ أَمْوَٰلَ ٱلنَّاسِ بِٱلْبَٰطِلِ ۚ وَأَعْتَدْنَا لِلْكَٰفِرِينَ مِنْهُمْ عَذَابًا أَلِيمًا
Holy Qur'an has given us a simple way of making more money which is by doing a riba-free business. Anything that involves commission, unjustifiable profits or interest, is prohibited as per religious Sharia laws and Prophet Muhammad's principles.
How to identify if you are doing 'riba-based' trading?
If your broker is taking roll-over charges for holding positions overnight, or you are paying charges for selling or holding a position, it's riba trading. A haram broker will charge you a fee on every profit you made on your stock. This will not only make it a sinful act, but also you will lose more money in interest rather than earning.
Many brokers offer lucrative bonuses or extra cash by opening a trading account through them; the truth is that they all are haram brokers. You should always watch out for these people.
As we are living in a social-media era, getting trapped in such offers is easier than we think. You are just one click away from investing your hard-earned money into a riba-based online trading system.
An Islamic account is significantly different than a standard account. The Islamic account works on a swap-free operation that eliminates the interference of riba in your trading activities.
What is a swap-free account and why it is important in investment?
Swap-free accounts are also known as riba-free accounts in which you don't need to pay any kind of interest while buying or selling stocks. When you use a swap-free account, your shares are not associated with overnight roll-over interests.
In this account, the stock prices are only dependent on their end-of-the-day value, and it will decide if you made profit or loss. The term 'swap' is used for the 'adjustments' made for the interest (riba) that occurs for holding a stock overnight. In this approach, you totally disregard the riba, and trade online in a sharia-compliant way. Islam has not prohibited making money online, but you need to stay away from riba.
What to do If I am already doing riba-based trading?
By mistake, if you are doing riba-based trading, you need to suspend that account and keep yourself away from violating Islamic holy laws. There are many professional Halal brokers like HalalTradingBrokers.com that lets you start with riba-free trading by opening an Islamic trading account.
As a beginner, it becomes challenging to identify, which is a professional halal broker as most of them are third-party agents. We are a team of Islam followers just like you that is on a mission of spreading riba-free online trading knowledge among all Sharia followers. If you need any assistance, visit our website and get in touch with us.