An Islamic account is an account that complies with the Islamic Shari’ah law, which prohibits payment and acceptance of . In conventional trading, you receive or have to pay an interestWhat is interest? In finance and trading, interest is a fe... More fee for any you hold after 22:00 GMT. This would constitute a violation of the Shari’ah.
An Islamic account avoids this kind of violation by automatically closing all trades at 22:00:00 GMT and then reopening them immediately at 22:00:01 GMT, which avoids the payment or receipt of any interest (called riba). Normally, the on an Islamic account are a little bit higher in orderWhat is a trade order? In trading, an order can be defined... More to compensate for the losses a might incur by not receiving interest.
Devout Muslims are also proscribed from engaging in excessive risk (gharar) or gambling (maysir), meaning that they must trade within the ethical ideals laid down in the Shari’ah.
For further reading on Islamic accountsAn Islamic account is an account that complies with the Isla... More, see The Accounting and Auditing Organization for Islamic Financial Institutions(AAOIFI) website.
