Forex Brokers in South Africa 2021
Looking for the best forex broker in South Africa for 2021? There are a large variety of Forex brokers available to the South African Forex trader of today. Forex trading is also fast evolving with new FX brokers emerging all the time and competition evolving at a rapid pace making it difficult for the South African forex trader to stay on top of things. The best Forex broker for one user may not be the best broker for another. It depends on your trading style, what you want to trade and your support needs. Some aspects are general and apply to all brokers, whilst some are more personal depending on your individual trading style, needs or beliefs.
Forex broker regulation, however, is in our opinion very important for all traders when choosing a broker since it is a matter of how safe your investment will be. In South Africa, the governing body regulating brokers is the Financial Sector Conduct Authority (FSCA). Some traders from South Africa prefer to trade with fx brokers regulated by FSCA, and other South African traders, however prefer to trade with internationally regulated brokers because then the trader can deposit a higher amount of money with the broker. Read more on this below the top list. A list of trusted European Financial Regulators can be found on this link.
Below, we review various forex brokers, both internationally regulated and FSCA regulated forex brokers well suited for South African traders. Our reviews are done on regulation, usability, platforms, minimum deposit, spreads, customer support, and many other criteria. Start by browsing our top list of recommended and trustworthy fx brokers below and continue by reading the individual reviews of each broker on the respective review pages that are linked from the top list. All forex brokers below accept traders from South Africa, and you can easily see in the “Pros” if the broker is regulated by FSCA.
Top 10 Tips for Picking an FX Broker in South Africa
Here we look at ten different factors that we believe are of significant importance when you, as a trader from South Africa, consider choosing a Forex Broker, whether you are a beginner or advanced trader. The significance of each will differ depending on your needs, which in turn will depend on your trading style, your knowledge level and your type of trading. However, let’s begin with regulation that we briefly touched upon earlier on this page.
1. Regulation and how safe is my money?
You wouldn’t put a large amount of your savings in a bank account if you did not know that the bank was secure and regulated, would you? So similarly why would you deposit with an FX Broker unless you were confident your funds and profits are safe?
In South Africa, brokers are regulated by FSCA. However, it is still legal for a South African trader to trade with a broker that is not regulated by the FSCA. You would still look for a broker regulated by one of the other major regulators. In the UK, brokers are regulated by the financial conduct authority (FCA). In the USA, the equivalent would be a broker regulated by the National Futures Association (NFA) and/or the Commodity Futures Trading Commission (CFTC).
A major advantage of opening an account with an FSCA regulated broker with a ZAR account is that you will not take any exchange losses when depositing with the broker. A disadvantage however with opening an account with an FSCA regulated broker is that the South African trader can only deposit up to 4 million rands for trading without filling in forms to apply for a higher sum. If you open an account with a foreign broker, not regulated by the FSCA, you will not have this deposit cap and often they offer other competitive account conditions as well.
Opening an account with a broker regulated by any of the above should allow for protection if you as a depositor/ trader end up with an issue or grievance with the broker. The top list above includes both brokers regulated by the FSCA and also other brokers, all regulated by major regulatory bodies, and therefore you can feel secure about trading with them.
2. Spreads and/ or Commission
Brokers do not provide their services for nothing, so they charge either commission per trade or more likely by the spread between the bid and offer prices. The wider the spread, effectively the more the trader has to pay to get into and out of each trade. So the narrower the spread, effectively the better off for the trader. Sometimes brokers offer fixed spreads, but often the spread will be variable depending on the volatility of the market.
3. Withdrawals and deposits
Most FX Brokers today offer very low requirements to open an account (from as little as £50 or 1000 Rands). Brokers have different policies with regard to depositing, funding and withdrawals. Are you able to fund the account from a bank account via wire transfer, via credit card, via PayPal? When withdrawing, is this done via wire transfer, to your electronic wallet, back to your bank account or credit card? Are there any withdrawal fees? Initial deposit requirements? Check this out. South African traders might want to open up a bank account in another country to be able to trade a larger bankroll than what is allowed in South Africa. That is another thing to consider.
4. Rollover interest (credit/ debit)
Some brokers charge a debit (or give a credit) for daily interest. This would be a consideration for any traders thinking of holding open positions over night.
5. Margin and Leverage
Many FX Trading accounts are based on the concept of margin and leverage. Leverage is basically the ability to increase the possible return on an investment or trade. A margin account allows the trader to use leverage by trading larger amounts than deposited in their account. This is because only the potential short term losses on the accounts need to be covered, not the full amount of the underlying asset. How much leverage any forex broker offers and the margin requirements may be a consideration when opening an account with a particular forex broker.
6. Types of forex accounts
There are different types of FX trading accounts which include more traditional cash exchange accounts, spread betting type accounts or CFDs (Contracts for Difference). The choice of which account to open will depend on your very specific needs and potentially even depend on your tax liabilities.
7. What markets can you trade?
All international FX brokers in the top list above for South Africa offer trading in the major currency pairs, including EURUSD, USDJPY, GBPUSD and also USDZAR, EURZAR, etc. Most also offer currency cross rates, ability to trade a large selection of currency pairs against each other.
In addition, many brokers offer the opportunity to trade other financial markets and assets. These would include equity indices, government bond markets and commodities (such as oil, gold, copper).
8. Trading platforms supported by the broker
Practically all brokers offer a trading platform, whereby the trader can access the various markets available to trade. Some brokers provide their own developed trading platforms, whilst others suggest downloading free platforms offered by third-party providers. There are many different factors to consider when looking at differing trading platforms including; ease of use, accessibility, trading tools on offer, charting packages, mobile/ tablet access, etc. Please see our list of best trading platforms in South Africa here.
9. Customer support
Many markets are now open 24 hours a day, five days during the week. So a strong customer support service would be open at all times during this time. Also, the speed of access to a live individual rather than an automated service should certainly be considered. Inevitably, when calling customer service it is usually with an issue, which as a trader you will likely want to be resolved as soon as possible. Opening hours are especially important when you’re located in South Africa and the broker’s headquarters might be located in another time zone.
10. Demo account available?
Most, but not all, Forex Brokers offer demo trading accounts to practice on. A demo account allows you to test the trading platform and evaluate some of the above-mentioned factors. All forex brokers useful to traders from South Africa in the top list above will offer demo accounts to new traders.