When you trade forex, you are effectively borrowing one currency to buy another. Each currency has an associated interest rate set by its central bank — for example, the US Federal Reserve sets the rate for USD and the European Central Bank sets the rate for EUR. When you hold a forex position overnight, you are borrowing money at one rate and lending at another.
The broker charges or credits you the net interest differential for each night you hold the position. This is called the swap, rollover, or overnight fee.
The swap rate is usually expressed in pips or in the account currency per lot per day. Brokers publish swap rates in their platforms (usually in the trading contract specifications).
Swap rates change as central bank rates change. The rates in any broker's platform reflect current market conditions.
Forex markets do not settle on weekends. To account for this, brokers apply triple swap on Wednesday nights (the Wednesday swap covers Wednesday + Saturday + Sunday settlement). A position held open through Wednesday's cut-off (5pm New York) incurs three days of swap in one night.
For positions with a negative swap rate, this is an important cost to factor in. Traders who hold positions for several weeks should calculate the weekly swap cost including the triple Wednesday charge.
Many brokers offer swap-free accounts, sometimes called Islamic accounts, for clients whose faith prohibits earning or paying interest (riba). On these accounts, no overnight swap is charged or credited.
Instead, brokers typically recover the cost through a fixed administration fee, a spread surcharge, or a charge per position per day after an initial period. The terms vary significantly between brokers. Some brokers offer swap-free accounts to any client regardless of religion — others require documentation. Use our free broker check tool to check whether a specific broker offers swap-free accounts.
For short-term traders (day traders, scalpers), the spread is the dominant cost — they open and close within the same session and pay no swap. For medium to long-term traders holding positions for days or weeks, swap can easily exceed the spread cost.
| Holding period | Dominant cost | Tip |
|---|---|---|
| Seconds–hours (intraday) | Spread | Focus on tight spreads; ECN accounts |
| 1–3 days | Spread + some swap | Check both spread and swap rate |
| 1–4 weeks | Swap often > spread | Calculate weekly swap before entering |
| Months | Swap dominant | Consider swap-free account |
A forex swap (rollover or overnight fee) is the interest charge or credit applied when you keep a position open past the broker's daily cut-off time (usually 5pm New York time). It reflects the difference in interest rates between the two currencies in the pair.
Swap = Contract size × Swap rate × Number of nights. For example, 1 standard lot at a swap rate of -0.52 pips held for 3 nights = 1 × $10 × 0.52 × 3 = $15.60 total cost. Swap rates change with central bank decisions.
On Wednesday nights, brokers apply triple swap to cover the weekend. A position held open past Wednesday's 5pm New York cut-off is charged three days of swap at once. This is standard industry practice across all brokers.
Yes. Many brokers offer swap-free (Islamic) accounts where no overnight interest is charged. Instead they may charge an administration or conversion fee. Check our broker check tool for swap-free availability at any broker.
Last updated 2026-09-16. This article is for educational purposes only and does not constitute financial advice.