Swap-Free Accounts and Account Currencies

Swap-free accounts

Rollover on a standard account charges or credits the interest-rate difference between the two currencies. A swap-free account removes that, which would let anyone hold a high-interest pair free of the cost, so brokers add conditions: a grace period of a few days, then a fixed daily fee per lot; exclusion of some exotic pairs; a requirement to justify the request; or a wider spread. Some brokers offer swap-free to everyone; most restrict it.

Is it a free lunch

No. The admin fee is usually set close to the average swap on the pairs traders actually hold, and on a pair where the swap would have been in your favour you lose a credit. It is the right account for those who need it and rarely an advantage for those who do not.

Account currency

Brokers offer accounts in USD, EUR, GBP, AUD and often several others. If you deposit in one currency and hold the account in another, you pay a conversion on deposit and withdrawal, and every profit or loss in a pair whose quote currency differs from your account currency is converted at the broker's rate. Hold the account in the currency you fund it with. If your currency is not offered, USD is the most useful default because most pairs are quoted in it.

Pip values and account currency

A pip on EUR/USD is worth 10 dollars per standard lot. In a GBP account that is worth about 8 pounds, and the number changes with the exchange rate. The pip value calculator converts for you; the point is that your risk in your own currency is what you should size on.

Key takeaways

• Swap-free accounts remove overnight interest and usually add a fixed fee after a grace period.
• They are for those who need them; rarely an advantage otherwise.
• Hold your account in the currency you fund it with.
• Size risk in your account currency.