Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74–89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Quick Summary: Best Brokers for Lowest Swap Rates 2026
Rank | Broker | Swap Model | Islamic Account | EUR/USD Long Swap | Regulation |
🥇 1 | Pepperstone | Near-interbank swap rates | ✅ Available | Competitive | FCA, ASIC, CySEC, BaFin |
🥈 2 | Eightcap | Transparent swap rates | ✅ Available | Competitive | ASIC, FCA, CySEC |
🥉 3 | FP Markets | Raw swap pass-through | ✅ Available | Competitive | ASIC, CySEC |
4 | XM Group | Market-rate swaps | ✅ Available (Islamic) | Standard | CySEC, ASIC |
5 | AvaTrade | Standard swap model | ✅ Available (Islamic) | Standard | CBI, ASIC |
6 | ThinkMarkets | Competitive swap model | ✅ Available | Competitive | FCA, ASIC |
7 | XTB | Standard swap model | ❌ Not available | Standard | FCA, CySEC |
Introduction: What Is a Swap in Forex Trading?
Every time a forex or CFD position is held open past the daily market rollover (typically 22:00 GMT for forex), the trader either pays or receives a swap — an overnight financing charge or credit reflecting the interest rate differential between the two currencies in the pair.
Swaps are often called “rollover fees,” “overnight rates,” or “financing costs.” They are one of the most overlooked trading costs for retail traders — particularly those who trade on daily or H4 charts, hold positions for multiple days, or run swing and position strategies where trades remain open for weeks.
For active swing traders and position traders, swap costs can be substantial. A 7-pip daily swap debit on a EUR/USD position of 1 standard lot (100,000 units) costs $7 per night. Over 30 days, that is $210 in swap costs on a single position — often exceeding the value of the trading opportunity itself.
Understanding how swaps are calculated, which brokers offer the most competitive rates, and how to legitimately avoid swaps entirely through Islamic accounts is essential for any trader holding positions overnight.
How Swap Rates Are Calculated
The Interbank Benchmark
Forex swap rates derive from the interest rate differential between two central banks’ benchmark rates. The formula for the theoretical fair swap on a long EUR/USD position is:
Swap = (EUR interest rate − USD interest rate) × (Position Size) × (Current Price) / 365
If the ECB’s benchmark rate is 2.5% and the Fed’s rate is 4.75%:
- EUR/USD long swap = (2.5% − 4.75%) × 100,000 × 1.085 / 365
- = −2.25% × 100,000 × 1.085 / 365
- = −$6.68 per night (negative = debit — you pay to hold longs)
This represents the theoretical interbank cost. In practice:
Broker swap = Interbank swap + Broker markup
This markup is where brokers generate additional revenue from position holders. The markup typically ranges from 0.5% to 3% annually depending on the broker and account type. Brokers advertising “lowest swap rates” are those whose markup is closest to zero — passing near-interbank rates to clients.
Triple Swap Wednesday
The standard forex market convention involves a triple swap on Wednesday night (rolling to Thursday). This occurs because the 2-day spot settlement means that positions held Wednesday night are settling for Monday — a 3-day settlement period — creating triple the normal nightly swap charge. This triple-Wednesday effect is a significant cost for traders who routinely hold positions into Thursday.
Positive Swap (Carry)
When the interest rate of the currency you are long exceeds the rate of the currency you are short, you receive a swap credit. Trading in the direction of the carry — buying high-yield currencies against low-yield currencies — creates a positive carry scenario where holding overnight generates income rather than cost.
Example 2026 carry trades: With significant rate differentials between major economies, pairs like USD/JPY and GBP/JPY have historically offered positive carry for long positions when USD and GBP rates exceeded JPY rates.
What Factors Determine Swap Rate Quality?
1. Broker Markup Size
The primary determinant of whether a broker has “low swaps.” Brokers with small markups above interbank pass near-institutional financing costs to clients. Brokers with large markups significantly increase the overnight cost burden.
ECN brokers with direct liquidity provider relationships — such as Pepperstone, Eightcap, and FP Markets — typically have lower swap markups than market makers, because their business model depends less on individual revenue from position holders.
2. Account Type
Swap rates can differ between account types at the same broker. Raw/ECN accounts sometimes have different (often better) swap rates than Standard accounts, as the ECN pricing model is designed for total cost transparency.
3. Instrument-Specific Rates
Swaps vary by currency pair, commodity, stock CFD, and index. Within the same broker, EUR/USD swaps will differ from USD/JPY, AUD/NZD, or exotic pair swaps. Always check the specific swap rates for the instruments you actually trade.
4. Rate Environment
Swap costs change as central bank benchmark rates change. In 2026, with many major central banks having gone through significant rate cycles, swap differentials across major pairs are substantial. Rates that were near-zero in 2020–2021 are now meaningful expenses for position holders.
1. Pepperstone — Best Overall Swap Rates 2026
Regulation: FCA, ASIC, CySEC, BaFin, DFSA, SCB Swap model: Near-interbank rates with minimal markup Islamic account: ✅ Available across all account types Swap visibility: Full swap rates visible in platform before position opening Full review: Pepperstone Review 2026
Pepperstone’s STP/ECN execution model means positions are routed to multiple tier-1 liquidity providers without internal market making. This structure allows Pepperstone to pass close-to-interbank swap rates — with minimal broker markup — as the business model focuses on spread and commission revenue rather than swap income.
Pepperstone Swap Specifics:
Transparent rate display: Pepperstone displays exact swap rates for every instrument directly in the MT4/MT5/cTrader platform. Before opening any position, traders can view the exact long and short swap rates applicable. No hidden surprises.
Competitive cross-pair swaps: For exotic currency pairs and commodity CFDs — where swap markups tend to be highest industry-wide — Pepperstone’s rates remain among the most competitive in the regulated retail broker space.
Islamic account: Pepperstone offers Islamic (swap-free) accounts across all account types — Standard and Razor — for Muslim traders who need to avoid interest-based charges on religious grounds. The Islamic account eliminates swaps entirely, with Pepperstone instead applying extended holding fees for positions held longer than a specified period. See What Is an Islamic Account? for the full framework.
Triple-Wednesday swap: Pepperstone applies the standard triple Wednesday swap in line with market convention. Traders can check the exact tripled rate in advance.
Platform swap visibility: On MT4: right-click any instrument → Properties → Swap tab. On MT5: right-click → Specification. On cTrader: instrument details panel.
2. Eightcap — Best ECN Swap Transparency 2026
Regulation: ASIC, FCA, CySEC, SCB Swap model: Direct pass-through from liquidity providers with minimal markup Islamic account: ✅ Available Full review: Eightcap Review 2026
Eightcap’s ECN infrastructure — built on Equinix NY4-hosted servers with multiple tier-1 liquidity providers — enables low-markup swap pass-through to clients. The Raw account’s direct liquidity provider pricing extends to its swap rates, making Eightcap a strong choice for position traders holding overnight.
Eightcap Swap Advantages:
- Swap rates visible per instrument in MT4/MT5 platform before opening
- Islamic swap-free accounts available across Raw and Standard accounts
- Particularly competitive swap rates on major AUD pairs — relevant for Australian-based position traders
- Free withdrawal policy complements low swap rates for cost-conscious traders. See Best Forex Brokers with Free Withdrawal 2026 for comparison.
3. FP Markets — Best Institutional Swap Pass-Through 2026
Regulation: ASIC, CySEC Swap model: Direct liquidity provider rate pass-through Islamic account: ✅ Available Full review: FP Markets Review 2026
FP Markets’ institutional-grade liquidity connections — supporting the professional Iress platform alongside MT4/MT5 — extend to swap rates that are among the lowest available to retail traders. For position traders who hold significant overnight exposure, FP Markets’ near-institutional swap rates can produce meaningful cost savings versus brokers with higher markups.
FP Markets Swap Specifics:
- Both MT4/MT5 and Iress accounts offer competitive swap rates
- Raw account pricing passes through close-to-institutional overnight rates
- Particularly relevant for Australian traders using Iress for ASX direct market access positions
4. XM Group — Best Swap Rates for Small Accounts 2026
Regulation: CySEC, ASIC, IFSC, DFSA Swap model: Market-rate swaps on Standard/Micro; Zero Swap account available Islamic account: ✅ Full Islamic account available Full review: XM Group Review 2026
XM Group offers a dedicated Zero Swap Account for traders who specifically want to eliminate overnight charges entirely — regardless of whether they qualify for an Islamic account. The Zero Swap Account has slightly wider spreads to compensate, but eliminates the unpredictability of overnight financing.
XM Zero Swap Account:
- Available to all traders regardless of religion
- No overnight swap charges on any position
- Wider spreads compensate for the eliminated swap income
- Minimum deposit: $5 (same as standard accounts)
- Full MT4/MT5 functionality
This makes XM one of the few brokers offering a swap-free account to all clients — not just Muslim traders — making it the best option for position traders or carry-trade opponents who want total overnight cost elimination without the religious account framework.
5. AvaTrade — Best Swap Rates for Diverse Instruments 2026
Regulation: CBI (Ireland), ASIC, IIROC, FSCA, ADGM, FSA, BVI Swap model: Standard market-maker swap model Islamic account: ✅ Available Full review: AvaTrade Review 2026
AvaTrade’s swap rates are competitive across its diverse instrument range — particularly on commodity CFDs and equity index CFDs where some brokers apply excessive overnight financing markups. For traders holding diversified portfolios across forex, commodities, and indices overnight, AvaTrade’s consistent swap treatment across all asset classes is a practical advantage.
AvaProtect and Swaps: AvaTrade’s unique AvaProtect position protection feature can serve as an alternative risk management tool for traders who might otherwise hold positions longer than optimal due to swap concerns — by protecting against losses for a defined period, it enables longer holding without the swap accumulation anxiety.
6. ThinkMarkets — Most Transparent Swap Display 2026
Regulation: FCA, ASIC, FSCA, JSE Swap model: Competitive market-rate swaps Islamic account: ✅ Available Full review: ThinkMarkets Review 2026
ThinkMarkets’ ThinkTrader platform displays swap rates for every instrument before position opening — one of the most transparent swap displays available in a proprietary mobile platform. For traders who actively factor swap costs into their position sizing and holding period decisions, ThinkTrader’s swap visibility before entry is a meaningful UX advantage.
How to Compare Swap Rates Across Brokers
Swap rates change regularly as central bank policy rates shift. The only accurate way to compare current rates across brokers is to check them directly within each platform:
Checking Swap Rates in MT4
- Right-click the instrument in the Market Watch window
- Select “Specification”
- View “Swap Long” and “Swap Short” — expressed in pips or points per night
Checking Swap Rates in MT5
- Right-click the instrument in the Market Watch window
- Select “Specification”
- View the “Swap” section for long and short rates and the rate type (in pips or as % per annum)
Checking Swap Rates in cTrader
- Open the instrument’s detail panel
- Navigate to the “Info” tab
- View overnight financing rates for long and short positions
Building a Swap Rate Comparison Spreadsheet
For traders with multiple broker accounts or those evaluating brokers, building a simple spreadsheet comparing swap rates across your traded instruments is the most accurate approach:
Instrument | Broker A (Long) | Broker B (Long) | Broker A (Short) | Broker B (Short) |
EUR/USD | -0.52 pips | -0.48 pips | 0.23 pips | 0.28 pips |
GBP/USD | -0.71 pips | -0.65 pips | 0.31 pips | 0.38 pips |
USD/JPY | 1.12 pips | 1.05 pips | -1.54 pips | -1.48 pips |
XAUUSD | -2.31 pips | -2.15 pips | 1.21 pips | 1.18 pips |
This comparison should be updated periodically as rates change with central bank policy.
Islamic Accounts: Eliminating Swaps for Religious Compliance
Islamic accounts (swap-free accounts) eliminate overnight swap charges entirely for Muslim traders whose religious beliefs prohibit the payment or receipt of interest (riba). In place of swaps, brokers may apply:
Administrative fees: Fixed fees for holding positions beyond a specified period (typically 3–5 days) — not characterised as interest
Extended holding charges: A flat fee applied to positions held for more than the broker’s specified free-holding period
Wider spreads: Some brokers slightly widen spreads on Islamic accounts to compensate for eliminated swap income
All seven brokers in this comparison offer Islamic accounts (XTB is the exception — no Islamic account available). The Islamic account option is valuable not only for Muslim traders but for any trader who wants to understand and eliminate swap cost unpredictability entirely.
For a complete guide to Islamic trading accounts, see What Is an Islamic Swap-Free Account? on CompareBroker.io.
Swap Strategies for Position Traders
1. Trade with the Carry (Positive Swap Selection)
In a significant interest rate differential environment, carefully selected pairs and directions generate positive swaps — the overnight charge works in your favour rather than against you. In 2026, pairs with high-yield currencies against low-yield currencies (such as USD, AUD, GBP against JPY or CHF) can generate meaningful positive carry for long positions.
Example: If USD rates significantly exceed JPY rates, holding USD/JPY long generates a daily swap credit rather than a debit. A trader holding 1 standard lot USD/JPY long might receive $8–$12 per night — meaningful passive income for position holders.
2. Close Before Rollover
For traders who hold positions during the trading day but prefer not to pay swaps, closing positions before 22:00 GMT and re-entering the next day avoids overnight charges entirely. This is only practical for day trading strategies and adds entry/exit spread costs (paid twice) versus one overnight swap — compare which is cheaper for your specific strategy.
3. Use Islamic Account Strategically
All traders at Islamic-account-supporting brokers can request a swap-free Islamic account. Some brokers apply administrative fees after an extended holding period — but for positions held 1–5 days (the typical swing trade duration), the swap-free period may cover the entire holding period with zero overnight cost.
4. Hedge Across Correlated Pairs
Holding simultaneously long and short positions in correlated pairs can create natural swap hedging — the swap debit on one position is partially offset by the swap credit on the other. This is a complex strategy requiring careful attention to correlation strength and net swap impact.
Frequently Asked Questions
What is a swap in forex trading? A swap is an overnight financing charge (or credit) applied to any forex or CFD position held open past the daily market rollover (typically 22:00 GMT). It reflects the interest rate differential between the two currencies in the pair, adjusted by a broker markup. If you are long a high-interest currency against a low-interest currency, you may receive a swap credit. If you are long a low-interest currency, you typically pay a swap debit.
Which broker has the lowest swap rates? Pepperstone, Eightcap, and FP Markets consistently offer among the lowest swap rates among regulated retail brokers, due to their ECN/STP execution models that minimise the broker markup above interbank swap rates. Actual swap rates change daily with market conditions — always verify current rates directly in the trading platform before holding overnight.
What is an Islamic (swap-free) forex account? An Islamic account (also called a swap-free account) eliminates overnight swap charges for Muslim traders in compliance with Islamic finance principles (Sharia law) that prohibit the payment or receipt of interest. Instead, brokers may apply administrative fees for extended position holding. Available at Pepperstone, Eightcap, FP Markets, XM Group, AvaTrade, and ThinkMarkets.
What is triple swap Wednesday? The standard forex market applies a triple swap charge on Wednesday nights (rolling to Thursday) because the 2-day settlement convention means Wednesday positions settle for Monday — effectively carrying 3 days of financing in one night. Traders should account for triple-Wednesday swap costs when planning to hold positions over the Wednesday rollover.
Can I avoid paying swaps entirely? Yes, through several approaches: (1) Islamic swap-free account — eliminates swaps entirely; (2) XM Group’s Zero Swap Account — available to all traders regardless of religion; (3) Day trading — close all positions before 22:00 GMT daily; (4) Trade short-duration strategies that don’t hold positions overnight.
Related Resources on CompareBroker.io
- 📊 Compare All Forex Brokers — Compare brokers by overnight financing rates
- 📊 Compare Zero Spread Brokers — Lowest spread brokers
- 📊 Best ECN Brokers 2026 — ECN brokers with minimal swap markups
- 📊 Compare Forex Demo Accounts — Test swap rates on demo
- 📖 Compare Commission-Free Brokers 2026 — Reduce commissions alongside swaps
- 📖 Best Forex Brokers with No Inactivity Fee 2026 — Avoid all extra fees
- 📖 Best Forex Brokers with Free Withdrawal 2026 — Complete fee-free picture
- 📖 What Is an Islamic Swap-Free Account? — Full Islamic account guide
- 📖 How to Compare Forex Brokers — Complete broker evaluation framework
- 🔍 Pepperstone Review 2026 — Best overall swap rates
- 🔍 Eightcap Review 2026 — ECN swap transparency
- 🔍 FP Markets Review 2026 — Institutional swap pass-through
- 🔍 XM Group Review 2026 — Zero Swap Account available
- 🔍 AvaTrade Review 2026 — Diverse instrument swap rates
- 🔍 ThinkMarkets Review 2026 — Transparent swap display
Risk Warning: Swap rates change daily with market conditions and central bank policy. Always verify current swap rates in your broker’s platform before holding positions overnight. This article is for informational purposes only and should not be treated as financial advice.
