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4 Best Forex Brokers with Segregated Accounts for 2024

Searching for the top forex broker with segregated accounts? Based on our hands-on analysis, we’ve identified the 4 best options tailored to various trading needs. Practical tips from our experts are included.

By:
Jitan Solanki
Reviewed By:
Ola Alder
Updated: Jul 16, 2024

List of Top Forex Brokers with Segregated Accounts

AvaTrade - Best Overall
9 trading courses in AvaTrade Academy. AvaProtect risk management feature to protect losses. Easy to use AvaSocial copy trading app. In-depth trading platform tutorials

IC Markets - Best Low Spreads
Raw ECN pricing accounts. Ultra-fast trade execution. Zero requotes and no minimum order distance restriction. 2,250+ tradable instruments. MT4, MT5, cTrader platforms. Trading Central and Autochartist plugins.

FP Markets - Best for Professional Traders
MAM and PAMM accounts. Copy trading app and Myfxbook social trading plugins. Raw ECN pricing accounts with competitive fees. MT4, MT5, cTrader platforms.

IG - Best Trading Platform
10,000+ tradable instruments with 100+ forex pairs. MT4, IG Web Trader, ProRealTime, L2 Dealer platforms. Multiple account types for traders and investors. Listed company on the London Stock Exchange.

What is a segregated account?

A segregated account is a distinct bank account where a forex broker deposits client funds, separate from its operational capital. This built-in separation acts as a financial firewall, ensuring that brokers cannot use traders’ funds for operational expenses or speculative investments, thus enhancing fund security.

For traders, a segregated account acts as a financial safety net. Imagine the unfortunate scenario where a broker faces insolvency or legal issues. In such a case, a segregated account ensures that the broker’s financial setbacks won’t impact your deposited funds. Your money remains protected and can be returned even under these adverse conditions.

How Did FX Empire Select the Best Brokers with a Segregated Account?

FXEmpire's Methodology

  • We only selected brokers with a high overall score in our proprietary rating system.
  • We reviewed the broker’s terms and conditions to ensure they follow rules that segregate client funds.
  • We verified the authorization and licenses for each broker to provide investment services in the regions they operate in.
  • We opened a live trading account with each broker to test their trading fees for competitiveness and transparency.
  • We tested each trading platform to identify how user-friendly it is and how many features and tools it incorporates.
  • We examined the different account types to ensure there is a suitable range for beginner and advanced traders.

Our team of experts has identified brokers’ strengths and weaknesses using FX Empire’s comprehensive methodology. Here’s how we test.

Now let’s go through the selected brokers.

Best Overall

IG

4.6
Start Trading
72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money
  • Min Deposit
    $250
  • Tradable Instruments
    17252
  • Fees
    Medium

Founded in 1974, IG is a heavyweight in the retail trading and investing industry listed on the London Stock Exchange. The broker provides the ability to trade on more than 10,000+ markets with low spreads and an excellent proprietary web-based trading platform.

Key Features:

  • Entities with Segregated Funds:
    • IG Markets Limited & IG Index Limited, regulated by UK FCA (1:30)
    • IG Europe GmbH, regulated by BaFin (1:30)
    • IG Bank SA, regulated by FINMA (1:200)
    • IG Limited, regulated by DFSA (1:50)
    • IG Markets South Africa Limited, regulated by FSCA (1:200)
    • IG Asia Pte Ltd, regulated by MAS (1:20)
    • IG Securities Ltd, regulated by FSA Japan (1:20)
    • IGM, regulated by ASIC and FMA New Zealand (1:30)
  • Trading Platforms: IG Web Trader, MT4, ProRealTime, L2 Dealer
  • Tradable Instruments: Forex, Stocks, Indices, Commodities, Bonds, Options
  • EUR/USD Fees: 0.75 pips, Zero Commission

Even though IG offers a range of different trading platforms, I have found its proprietary IG Web Trader platform is an excellent option for both beginners and professionals. It’s simple to navigate and comes with a wide range of charting tools and technical analysis indicators. From the platform, you can access and trade on more than 10,000 financial instruments from a variety of different account types including CFD, Share Dealing, Spread Betting, ISA & SIPP (for UK clients). Notably, IG has an impressive range of more than 100 forex pairs covering majors, minors, exotics, and emerging market currencies.

When testing IG’s trading fees, I found the spread for EUR/USD during the most active times in the London and New York sessions averaged 0.75 pips. This is very competitive and better than the industry average of 1.0 pips for a commission-free trading account.

Pros
  • Low forex spreads
  • 100+ forex pairs
  • Multiple account types
  • Globally regulated
Cons
  • Range of markets may overwhelm some beginner traders
IG Review

Best for Beginners

AvaTrade

4.6
Start Trading
Trading CFDs and FX Options entail risk and could result in the loss of your capital.
  • Min Deposit
    $100
  • Tradable Instruments
    853
  • Fees
    Medium

Established in 2006, AvaTrade is a globally recognized broker with licenses from eight financial regulatory authorities, including top-tier CySEC and ASIC. Catering especially to novice traders, the broker offers an array of valuable resources including comprehensive educational content, a user-friendly copy trading app, and a suite of specialized risk management tools.

Key Features:

  • Entities with Segregated Funds:
    • AvaTrade EU Ltd, regulated by CBI (1:30)
    • DT Direct Investment Ltd, regulated by CySEC (1:30)
    • AvaTrade Japan, regulated by FSA Japan (1:25)
    • Ava Capital Markets Pty Ltd, regulated by ASIC (1:30)
  • Trading Platforms: MT4, MT5, Ava Web Trader, AvaSocial, AvaOptions
  • Tradable Instruments: Forex, Stocks, Indices, Commodities, Crypto, Options
  • EUR/USD Fees: 0.9 pips, Zero Commission

AvaTrade established its own Academy which offers an excellent range of materials for beginner traders to start with. The academy provides access to nine comprehensive courses, ranging from “Introduction to Technical Analysis” and “Online Trading Strategies,” to more advanced subjects like “Advanced Trading Techniques” and a “Trading Platforms Crash Course.” These courses feature between 5 and 21 lectures, with durations extending from 15 minutes to nearly 3.5 hours, giving traders a rounded understanding of the field.

In addition to offering both demo and live trading accounts with zero commissions, I was impressed by AvaTrade’s innovative feature known as AvaProtect. This unique risk management tool enables traders to reclaim their money on losing trades by covering an initial hedging fee at the trade’s outset. Our live fee test showed the spread for EUR/USD during the London and New York sessions averaged 0.9 pips which is better than the industry average of 1.0 pips for a commission-free trading account.

Pros
  • Extensive AvaTrade Academy
  • AvaProtect hedging tool
  • Demo trading account
  • Copy trading app
Cons
  • Entities regulated by FSCA and FSC BVI do not segregate client funds
AvaTrade Review

Best for Professional Traders

FP Markets

4.6
Start Trading
Contracts for Difference (CFDs) are leveraged over-the-counter derivative products and carry a high level of risk to your capital. You should only risk capital that you can afford to lose. In certain circumstances, due to fluctuations in market value you may not get back your initial investment amount. You may not only lose your initial investment but you may incur a liability to pay a further amount to cover losses. This means you can lose more money than you have invested.
  • Min Deposit
    $100
  • Tradable Instruments
    8977
  • Fees
    Low

Founded in 2005, FP Markets is headquartered in Australia and has other offices worldwide. The broker provides an excellent range of trading products suitable for professional traders which includes access to Raw ECN pricing, VPS hosting solutions, and investment manager products such as MAM and PAMM accounts.

Key Features:

  • Entities with Segregated Funds:
    • First Prudential Markets Ltd, regulated by CySEC (1:30)
    • First Prudential Markets PTY Ltd, regulated by ASIC (1:30)
    • FP Markets LLC, unregulated (1:500)
  • Trading Platforms: MT4, MT5, cTrader, IRESS
  • Tradable Instruments: Forex, Stocks, Indices, Commodities, Crypto
  • EUR/USD Fees: 1.1 pips, Zero Commission

If you’re a professional trader responsible for managing third-party capital, FP Markets’ Money Manager Program could be an invaluable resource for you. This program enables you to establish both MAM (Multi-Account Manager) and PAMM (Percentage Allocation Management Module) master trading accounts, which can then automatically replicate trades across an unlimited number of client sub-accounts. Additionally, the broker offers advanced copy trading software, presenting another avenue for seasoned traders to cultivate a following and generate revenue based on performance.

On top of the MT4, MT5, and cTrader platforms, I found you can use third-party plugins such as AutoChartist and Trading Central as well as FP Markets Traders Toolbox – a package of 12 extra indicators for MetaTrader. I personally enjoy using the Sentiment Indicator as it can help identify overbought and oversold markets. Our live fee test showed the spread for EUR/USD during London and New York times averaged 1.1 pips which is around the industry average of 1.0 pips for a commission-free trading account.

Pros
  • MAM and PAMM accounts
  • Copy trading tools
  • VPS hosting solutions
  • Raw ECN pricing
Cons
  • No proprietary plarform
FP Markets Review

Best Low Spreads

IC Markets

4.5
Start Trading
Trading Forex and CFDs carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Forex and CFDs may not be suitable for all investors, so please ensure that you fully understand the risks involved and seek independent advice if necessary.
  • Min Deposit
    $200
  • Tradable Instruments
    2245
  • Fees
    Low

Established in 2007, IC Markets stands out as our top pick for brokers offering segregated accounts. With access to raw ECN pricing, IC Markets offers traders the advantage of low spreads and deep liquidity. Furthermore, the broker provides a diverse array of trading options with over 2,250 instruments, all accessible through three world-class trading platforms.

Key Features:

  • Entities with Segregated Funds:
    • IC Markets EU Ltd, regulated by CySEC (1:30)
    • International Capital Markets Pty Ltd, regulated by ASIC (1:30)
    • Raw Trading Ltd, regulated by FSA Seychelles (1:500)
  • Trading Platforms: MT4, MT5, cTrader
  • Tradable Instruments: Forex, Stocks, Indices, Commodities, Crypto
  • EUR/USD Fees: 0.6 pips, Zero Commission

IC Markets has been the go-to forex broker for short-term, high-frequency traders for decades. Due to its low latency, and fiber optic NY4 data servers, it offers access to Raw ECN pricing from the interbank market with low spreads. Our live fee test showed the spread for EUR/USD during peak times in London and New York, averaged 0.6 pips which is better than the industry average of 1.0 pips for a commission-free trading account.

I was impressed by the broker’s ability to offer a zero requote policy and no minimum order distance restrictions. This means you can place orders very close to the current market price. With the ability to trade from MT4, MT5, and cTrader and access to research plugins Trading Central and Autochartist, IC Markets is a top broker to consider trading with.

Pros
  • Multiple trading platforms
  • Raw ECN trading accounts
  • Commission-free trading
  • Multiple research tools
Cons
  • Only CySEC entity provides a compensation scheme
IC Markets Review

How to choose a forex broker with a segregated account?

Here is a quick guide on how to choose a forex broker with segregated accounts.

How is the broker regulated?

A regulated broker has to abide by strict rules and guidelines in managing your money and executing your trades. This higher level of regulatory oversight provides extra protection for your money. However, not all regulators provide the same level of protection.

In our broker rating reviews, we categorize regulated brokers into three tiers:

  • Tier-1 regulators operate in well-established financial centers. This includes the UK FCA, CySEC, ASIC, IIROC, and many others.
  • Tier-2 regulators operate in well-established but smaller financial centers. This includes the FMA New Zealand, FSCA South Africa, and others.
  • Tier-3 regulators tend to operate in offshore countries. This includes the FSC BVI, FSA Seychelles, SCB, and others.

A broker may operate different entities across the world, so it is important to understand the legal conditions of the entity you are opening an account with and where they are located.

Read more about Best regulated forex brokers.

How do segregated accounts enhance trader trust?

Tier-1 regulators generally provide the highest level of protection. However, not all Tier-1 regulators are equal. While they all legally require brokers licensed by them to segregate client funds and provide a negative balance protection not all of them offer access to a compensation scheme.

Brokers operating entities licensed by Tier-2 and Tier-3 regulators are not legally required to segregate client funds from company funds. Therefore, they could transfer your client funds to the other accounts, loan them out, and invest them which all put your capital at risk.

If a broker doesn’t segregate client funds, your capital is at risk, potentially being used for the broker’s operations or even loaned out. Trading with a broker legally mandated to segregate client funds offers essential protection, especially if they’re also part of a compensation scheme, which can help recover some or all of your deposit if the broker defaults. Always scrutinize the terms and conditions for fund protection when selecting a broker.

What is a compensation scheme?

A compensation scheme in the context of financial markets is a safety net established to protect traders and investors in case a financial institution, such as a broker or a bank, fails or becomes insolvent. These schemes are generally backed by regulatory bodies and guarantee that clients will recover a certain portion of their funds if the institution can no longer meet its financial obligations.

In my examination of legal documents from various global broker entities, I discovered that some brokers disclaim responsibility if the financial institution holding your segregated funds goes under. This means that even if your funds are segregated, you may still risk losing some or all of your money.

Top-tier regulators like the UK’s FCA, Canada’s IIROC, Cyprus’s CySEC, and Japan’s FSA require brokers to participate in compensation schemes, offering traders a financial safety net in case of broker insolvency. However, the coverage varies: IIROC offers up to 1 million CAD, the FCA provides up to 85,000 GBP, and CySEC covers up to 20,000 EUR. It’s crucial to factor in these differing compensation limits when choosing a broker regulated by these entities.

Check out our guides on Best FCA-regulated brokers and Best CySEC-regulated brokers.

What fees to consider when choosing a broker?

Trading fees have a big impact on your overall profitability. Below are a few fees to be aware of when choosing a broker:

  • Spread. The difference between the buy price and the sell price.
  • Commission. A fee to buy or sell.
  • Overnight/swaps. The fee to hold a leveraged or margined position overnight.
  • Payments. Deposit and withdrawal fees.
  • Inactivity. A fee due to no activity on an account.

The broker’s trading fees should be clear and transparent on their website in the ‘fees’ section and in the legal terms and conditions. If it is not, then the broker may be hiding something and you should avoid them.

Read more about Best lowest spread forex brokers and Best lowest swap forex brokers.

How to choose the best account type?

In my extensive experience, brokers usually offer a range of one to seven different trading accounts. Each account type can vary in terms of the number of tradable instruments, minimum deposit requirements, and access to special products. However, the most significant difference between these accounts is invariably the trading fees.

Trading accounts can be broadly classified into commission-free and commission-based accounts.

  • A commission-free account does not charge any fees for buying or selling. Instead, most of the fees are incorporated into the spread, which is why these accounts typically have wider spreads.
  • A commission-based account charges a fee for buying and selling. However, this fee is in exchange for receiving price quotes directly from the interbank market, which results in lower spreads.

The suitability of a trading account depends on the individual trader’s trading style. Beginner traders may prefer a commission-free account because the costs are included in the spread, resulting in fewer risk management decisions. Short-term traders may prefer a commission-based account to gain access to lower spreads, allowing them to execute trades at precise levels.

Learn more about Best ECN forex brokers and Best STP forex brokers.

What is leverage and how does it work?

Leverage has played a significant role in the growth of forex and CFD trading. Leverage refers to the ability to control a large position in a currency pair with a relatively small amount of capital. It’s essentially a loan extended by the broker to the trader.

For instance, if a broker offers a forex leverage ratio of 1:50, it enables you to manage a $50,000 position with just $1,000 in your account. In other words, you have the power to control a position that’s 30 times greater than your initial deposit.

While top-tier regulatory bodies like the UK’s FCA, CySEC, ASIC, FSA Japan, and IIROC cap retail trading leverage at 1:30, unregulated offshore brokers tout sky-high leverage ratios, sometimes going up to 1:3000.

Keep in mind that elevated leverage can amplify your gains and the same time can exponentially increase your losses. Your profits or losses are based on the entire trade value, not just the initial margin you put up. Exercise caution when considering offshore brokers that offer extremely high leverage, as it may exacerbate your risk exposure.

Find Best forex brokers with high leverage.

How to choose a suitable trading platform?

A trading platform is your portal to the global market, enabling you to monitor real-time, market price data and execute your trading orders. When selecting a platform, there are several factors to consider:

  • Ensure the platform is accessible across desktop, web, and mobile devices.
  • Check if it offers free, real-time price data.
  • Look for inbuilt drawing tools and technical indicators.
  • Verify if the platform offers tutorials for better understanding.
  • Confirm that customer support is easily accessible for any help.
  • Determine if the broker allows third-party integrations.

Some of the most common trading platforms include:

  • MetaTrader 4: The ‘go-to’ forex trading platform which has excellent charting capabilities, technical analysis tools, and automated trading features. Read more about best MT4 brokers.
  • MetaTrader 5: An updated version of MT4 with more indicators, timeframes, and markets. Read more about best MT5 brokers.
  • cTrader: A platform specifically designed for high-frequency traders and scalpers. Read more about best cTrader brokers.
  • TradingView: A browser-based social trading platform with advanced research tools and access to global markets. Read more about best TradingView brokers.
  • In-House Proprietary Software: Some brokers may invest in having their own proprietary trading software.

Check out our guide on Best forex trading platforms.

How to avoid forex and CFD scams?

Unfortunately, there are a lot of forex and CFD scams. Here are a few tips to avoid them:

  • Beware of Offshore, Unregulated Brokers: Exercise caution with brokers operating offshore, as they are often unregulated. While they may present terms and conditions, these are usually not rigorously enforced, limiting your legal recourse in case of mishandling of your funds.
  • Verify Physical Office and Support: Ensure the broker has a physical office in a reputable financial hub and offers a live customer support team for assistance.
  • Conduct Background Checks: Conduct a background check by searching for the broker’s name online and reviewing any news articles that mention them.
  • Choose Familiar Payment Methods: Stick to familiar payment methods and steer clear of unfamiliar ones.
  • Review Terms and Conditions: Scrutinize the terms and conditions carefully to understand the legal obligations you’re committing to.

Our Methodology

We evaluate brokers using a proprietary rating system that involves analyzing 250 data points across nine core categories, which include:

  • Trustworthiness: We check the authorization and licenses for each broker with the regulator in the country they operate in.
  • Fees: We examine the broker’s trading fees by opening a live trading account and comparing them to the industry average.
  • Trading platform and tools: We test the broker’s trading platforms to identify the number of features they provide and their user-friendliness.
  • Tradable instruments: We identify the number of tradable instruments to ensure there is a diverse range available.
  • Customer support: We interact with the customer support team to test the ease of access, knowledge, and helpfulness.
  • Payment methods: We examine all of the different deposit and withdrawal methods available.
  • Account types: We explore the features and benefits of each account type including execution method, minimum deposits, and more.
  • Research and education: We assess the quality of the broker’s research and educational materials.

Read more about our review process here.

For this guide, we scrutinized the terms and conditions of each broker to confirm they adhere to regulations that segregate client funds. Additionally, we verified the licenses and authorizations of each broker, ensuring their legitimacy to provide investment services in the regions where they operate. To gauge competitiveness and transparency, we went a step further by opening live trading accounts with each broker to assess their trading fees. Finally, we put each trading platform through its paces, evaluating its user-friendliness along with the range of features and tools available.

Meet Our Writers

The team of forex and CFD writers and editors at FX Empire is composed of trading industry professionals and seasoned financial journalists. Our writers have been published on leading financial websites such as Investopedia and Forbes. In addition, they all have extensive trading experience.

Get to Know Our Authors

Dan BlystoneBroker Analyst

Dan Blystone began his career in the trading industry in 1998 on the floor of the Chicago Mercantile Exchange. Later Dan gained insight into the forex industry during his time as a Series 3 licenced futures and forex broker. He also traded at a couple of different prop trading firms in Chicago. Dan is well-equipped to recommend the best forex brokers due to his extensive experience and understanding of the brokerage industry.

Jitan SolankiBroker Analyst

Jitan Solanki is a professional trader, market analyst, and educator. He day trades major currency and index markets and focuses on swing trading US equities and commodities. A qualified Market Technician, Jitan also works with trader education and brokerage companies on various projects. These include market analysis, live trading events, and broker reviews. As an experienced trader and educator, Jitan brings all his qualities in action when reviewing and recommending brokers.

Plamen StoyanovBroker Analyst

Having been a retail trader since 2013, Plamen has gained an in-depth understanding of the challenges that novice traders face today. His expertise is swing trading and day trading with a heavy emphasis on psychological and fundamental analysis. Plamen’s favourite trading instruments include FX majors and gold. He earned a Bachelor's degree in Economics and International Relations. Plamen's broad experience has equipped him with the expertise to recommend the best forex brokers.

Vladimir ZernovBroker Analyst

In more than 15 years of trading in the financial markets, Vladimir dealt with a wide range of brokers and financial instruments. His career as a day-trader at a proprietary trading firm goes back to 2007. Later, Vladimir turned to longer time frames and became an independent trader and analyst managing his own portfolio. Using his experience, he helps traders find the best broker in his reviews.

FAQ

A segregated account is a separate bank account where brokers keep client funds distinct from their own operational capital. This setup ensures that the broker cannot use traders' funds for business expenses or speculative activities, thereby enhancing the security of client assets. For traders, a segregated account serves as a financial safety net in the event the broker faces insolvency or other financial difficulties.
No, not all forex brokers offer segregated accounts. While it's a legal requirement for brokers regulated by top-tier financial authorities to segregate client funds, brokers operating under less stringent regulatory environments may not offer this safeguard.
Top-tier regulatory bodies such as the UK's Financial Conduct Authority (FCA), the Cyprus Securities and Exchange Commission (CySEC), the Australian Securities and Investments Commission (ASIC), and Canada's Investment Industry Regulatory Organization (IIROC) mandate the use of segregated accounts for forex brokers operating under their jurisdictions.
Yes, a non-regulated broker can offer segregated accounts, but it's crucial to approach such offers with caution. While they may claim to segregate client funds from their operating capital, there's no regulatory oversight to guarantee that they're actually doing so.
To verify if a broker segregates client funds, check the broker's regulatory licenses and consult their terms and conditions. You can also directly inquire with the broker's
There are no additional fees for maintaining a segregated account.
If your broker goes bankrupt, funds in a segregated account are generally protected from being used to pay off the broker's creditors, as they are considered separate from the broker's operating capital. The specifics may vary depending on the jurisdiction and the regulatory body overseeing the broker, but in many cases, you would be eligible for compensation up to a certain limit through a compensation scheme. Always check the terms of the regulatory protections applicable to your broker.
You can't directly access or withdraw funds from a segregated account since it's managed by the broker and held in a separate financial institution for security purposes. However, you can initiate a withdrawal request for the funds in your trading account through the broker's platform or customer service, and the broker will subsequently transfer the requested amount from the segregated account to your specified payment method.

About the Author

Jitan SolankiBroker Analyst

Jitan Solanki is a professional trader, market analyst, and educator. He day trades major currency and index markets and focuses on swing trading US equities and commodities. A qualified Market Technician, Jitan also works with trader education and brokerage companies on various projects. These include market analysis, live trading events, and broker reviews. As an experienced trader and educator, Jitan brings all his qualities in action when reviewing and recommending brokers.

Why you can trust FX Empire

At FXEmpire, we strive to provide unbiased, thorough and accurate broker reviews by industry experts to help our users make smarter financial decisions.

Why you can trust FX Empire

FXEmpire was founded in 2011, making us one of the first forex broker review sites. You can trust FXEmpire because of our thorough and unbiased review process. With over a decade of experience, we have a team of industry experts who conduct rigorous tests to ensure our reviews are accurate and unbiased. Our reviews are designed to bring clarity and confidence to the process of choosing a broker, and are based on objective criteria and measurable data. Our editorial team is composed of trading industry professionals and seasoned financial journalists, who ensure that our reviews are accurate and unbiased. Additionally, our review system is based on 9 core categories and over 250 distinct variables, which ensures that all aspects of a broker are considered before giving a final rating. So, you can trust FXEmpire to provide you with honest and informative reviews that will help you make an informed decision on which broker will best enable you to reach your financial goals.