In addition to competitive commissions, low spread forex brokers enable you to trade currencies in a cost-effective way.
In this comparison guide, I review some of the best low spread forex brokers for active currency traders.
Also consider reading: My guide to choosing a forex broker
Browse the top low spread forex brokers in May 2023
Low spread forex brokers are popular with active currency traders, considering that they offer a cost-effective way to enter and exit the market.
Below, I discuss a selection of low spread forex brokers that support a wide variety of currency pairs across the majors, minors, and exotics.
eToro – Trade dozens of currency pairs on a spread-only basis
eToro is an online trading platform that not only supports forex, but other asset classes such as stocks, ETFs, and cryptocurrencies. There are just under 50 forex pairs to trade at eToro, which covers all majors and minors and a selection of exotics.
When trading forex, eToro operates on a spread-only basis. This means that instead of paying a conventional commission, traders simply need to cover the difference between the bid and ask price of the respective pair.
At eToro, spreads start at 1 pip when trading EUR/USD and USD/JPY. Other popular pairs, such as AUD/JPY, EUR/JPY, and GBP/USD can be traded from 2 pips. The minimum position size when trading forex at eToro is $1,000.
With that said, leverage is available on all supported pairs, which reduces the minimum entry size to $33.33. Both long and short positions are supported, which ensures that traders can speculate on rising and falling currency prices.
What I like about eToro
I like that eToro offers a simple and easy-to-navigate trading platform. This will appeal to beginners that are trading forex online for the first time. Beginners will also appreciate that the minimum deposit to open an account is just $10.
I also like that eToro offers a copy trading service. There are thousands of verified forex traders to choose from and the service permits passive trading without additional fees. This means that eToro users can trade forex passively.
US clients are able to deposit funds into their eToro account without paying any fees. Instant payment types are inclusive of debit cards and several e-wallets. Finally, and perhaps most importantly, eToro is regulated by the SEC.
- Trade nearly 50 FX pairs
- Spread-only pricing model – EUR/USD from 1 pip
- No fees to deposit or withdraw funds in US dollars
- Limited analysis tools for advanced traders
- A larger selection of exotic pairs are available elsewhere
- Minimum copy trading requirement of $200
Interactive Brokers – Forex spreads start from 1/10 of a pip
Interactive Brokers (IBKR) offers a premium trading suite that covers tens of thousands of financial instruments. In the forex department, traders in the US will have access to more than 100 FX pairs – inclusive of many exotic currencies.
I found that, unlike eToro, IBKR is more suitable for experienced currency traders that know their way around a trading suite. FXTrader, for instance, is a forex-centric trading platform that offers unrivaled tools and features.
This includes real-time streaming quotes, advanced technical and economic indicators, and bespoke risk management orders. FXTrader is fully-customizable too, so traders can create their optimal trading screen at the click of a few buttons.
What I like about IBKR
In addition to offering a large selection of currency pairs, I like that IBKR is home to some of the lowest trading fees in the market. For instance, forex spreads start at just 1/10 of a pip. Moreover, commissions are competitive at between 0.08 to 0.20 bps (basis points).
I also like that IBKR offers deep liquidity. This ensures that bid and ask prices remain competitive throughout the trading day and that slippage is largely avoidable. This is made possible through IBKR’s direct access to the world’s largest currency dealers.
On the flip side, I found that the high-level professional tools offered by IBKR likely won’t suffice for the casual forex trader. Furthermore, trade minimums are significantly higher when compared to the likes of eToro. USD pairs, for instance, come with a minimum of 25,000 units.
- Supports over 100+ FX pairs
- Spreads start from just 1/10 of a pip
- Deep liquidity and ultra-low commissions
- FXTrader is aimed at professional forex traders
- Minimum trade size of 25,000 units (USD pairs)
- Account onboarding can be slow
Capital at risk.
TD Ameritrade – Floating forex spreads on a commission-free basis
TD Ameritrade is another option to consider when exploring the best low spread forex brokers. I found that TD Ameritrade does not charge any trading commissions when buying and selling currency pairs.
Moreover, TD Ameritrade utilizes a floating spread system, which means that the bid and ask price will fluctuate depending on market conditions. Generally, the lowest spreads are available during busy trading hours.
With that said, the forex trading facility at TD Ameritrade is operational 23 hours per day, Sunday through Friday. In total, you will have access to more than 70 currency pairs at this brokerage, with TD Ameritrade covering a broad selection of majors, minors, and exotics.
What I like about TD Ameritrade
In addition to its commission-free and floating spread offering, I like that TD Ameritrade provides all of the required analysis tools to make informed forex decisions. Its native thinkorswim trading suite is packed with customizable charts, with are fueled by real-time pricing quotes.
This is in addition to high-level drawing tools and technical indicators. Depending on your preferences, thinkorswim is available across three mediums – desktop, mobile, and standard web browsers.
I should, however, note that just like IBKR, the forex suite at TD Ameritrade is aimed at professionals that have upper-end knowledge of technical trading.
Nonetheless, advanced FX traders will also appreciate that TD Ameritrade supports currency-centric futures, with high levels of leverage on offer for qualified investors.
- Commission-free trading
- Floating spreads that are generally very competitive
- Thinkorswim trading suite offers high-level analysis tools
- Not suitable for casual traders with minimal experience
- Forex trading is only available to qualified investors
- Currency markets provided by Charles Schwab Futures and Forex LLC
Capital at risk.
FOREX.com – Specialist currency broker with various account types
It goes without saying that Forex.com is a specialist currency broker. At Forex.com, traders have three core account types to choose from. This will determine the types of spreads on offer. For instance, the Direct Market Access (DMA) account is aimed at high-volume traders.
This account offers direct access to institutional-grade spreads that are free of additional markups.
This account also offers access to deep liquidity and real-time order book pricing. Although the DMA account comes with some of the lowest currency spreads in the market, Forex.com recommends a minimum balance of $25,000.
What I like about Forex.com
Casual traders might therefore find either the standard or commission accounts more suitable, both of which come with a minimum recommended balance of $1,000.
Both options offer access to over 80 currency pairs, but only the standard account permits trading via MT4 and MT5. The standard account operates on a spread-only basis, so no commissions apply. The minimum spread on EUR/USD on this account type is 1.2 pips.
The commission account is more competitive in the spreads department, with EUR/USD starting from just 0.2 pips. However, this account type comes with a $5 commission for every $100k traded.
Overall, I like that Forex.com is suitable for all experience levels and that all budgets are catered for. Furthermore, while beginners might prefer the standard web trading platform, seasoned pros have access to the MetaTrader series alongside an advanced desktop platform that is native to Forex.com.
- Multiple account types to choose from – all levels of experience are welcome
- DMA accounts offer access to industry-leading forex spreads
- Supports a variety of trading platforms – including MT4/5
- DMA account comes with a minimum recommended balance of $25,000
- Only the standard account can trade via MT4/5
- Commission-free accounts come with a minimum EUR/USD spread of 1.2 pips
IG – 80+ forex pairs and EUR/USD spreads from 0.8 pips
IG – which was founded in 1974, is an online broker that offers US clients access to more than 80 currency pairs. Spreads are very competitive at IG, with EUR/USD and USD/JPY available to trade from just 0.8 pips.
This is a spread-only forex broker, so no commissions are charged. When trading major currency pairs like EUR/USD, each pip movement is fixed at $10. In addition to offering low spreads, IG is suitable for forex traders that seek access to leverage.
As per US regulations, major pairs can be traded with leverage of up to 1:50, meaning that traders are only required to put up a margin of 2%. Leverage of up to 1:20 is available when trading minor and exotic pairs.
What I like about IG
I like that IG is very transparent on the forex spreads it charges, with each supported pair clearly displaying the minimum number of pips. I also like that IG offers various trading platforms to cater for both newbies and seasoned pros.
For example, while the proprietary web and mobile trading platform offered by IG is suitable for beginners, traders will still have access to charting tools and indicators. For more experienced traders, IG supports MT4.
When it comes to payments, I found that the minimum first-time deposit at IG is $250. Clients can deposit funds instantly with a debit card after the onboarding process has been completed.
- Trade 80+ forex pairs
- EUR/USD spreads start from 0.8 pips
- Leverage of up to 1:50 when trading major currencies
- Minimum deposit of $250 might not be suitable for those on a budget
- US clients do not have access to other IG products – such as stocks
- Does not offer copy trading services
OANDA – Trade EUR/USD from 0.0 pips + a fixed commission
OANDA is a regulated online broker that has been offering forex trading services for over 25 years. I found that OANDA is a great option for serious traders that seek direct access to the same liquidity pools as utilized by premier banks.
The core pricing plan at OANDA, therefore, comes with some of the lowest spreads in the currency trading market. In fact, during busy market hours, EUR/USD can be traded from 0.0 pips – meaning that you will have access to true wholesale prices.
Other pairs can be traded from 0.2 pips upwards. Spreads are, however, determined by market conditions, so expect to pay more when trading volumes are down. Either way, the core pricing plan at OANDA comes with a fixed commission of $5 for every $100k traded.
What I like about OANDA
Although I like the core pricing plan for its ultra-competitive spreads, I should note that OANDA also offers an account for casual traders. The standard account – which comes without a minimum deposit requirement, operates on a spread-only basis.
This means that you can avoid the commission all together. Naturally, spreads are less competitive, with EUR/USD averaging 1.4 pips. Irrespective of the chosen plan, OANDA offers access to more than 70 FX pairs.
I also like that both account types come with unlimited free wire transfers and 24/5 customer support. OANDA offers its own native trading platform that can be accessed online via standard web browsers, as well as through a mobile app and desktop software.
OANDA also supports third-party trading suites, such as MT4 and TradingView.
- Forex spreads start from 0.0 pips
- Competitive commission of $5 per $100k traded
- Commission-free accounts are also available
- Monthly inactivity fee of $10
- Bank wire transfers can take up to three working days to process
- Does not offer access to equities
Trading.com – Beginner-friendly forex broker with low spreads
Trading.com is an online broker that specializes exclusively in forex. The platform is aimed at casual traders that are potentially just getting started in the world of currency trading. First-time deposits only need to meet a minimum of $50.
Trading.com is jam-packed with educational guides that cover core trading topics. This can be used in conjunction with the Trading.com demo account, which enables you to buy and sell currency pairs in a risk-free way.
What I like about Trading.com
In addition to its user-friendly interface and small minimum deposit requirement, I like that Trading.com offers the perfect balance between low spreads and a zero commission policy. In fact, spreads on EUR/USD start from just 0.7 pips.
USD/JPY and GBP/USD are slightly less competitive at 1.1 pips and 1.2 pips, but it is important to remember that you won’t be charged any commissions.
I also like that the Trading.com app has been designed with newbies in mind. The app supports one-tap trading in a seamless manner, so you are never more than just a click away from the forex markets.
The Trading.com app also supports landscape viewing, which is ideal for analyzing charts on the move. The web trading platform offered by this forex broker is also user-friendly, with no download or installation required. Trading.com also supports MT5.
- User-friendly trading interface for inexperienced forex traders
- Commission-free framework and spreads start from 0.7 pips
- Supports MT5
- Too basic for seasoned forex traders
- Minor pairs come with less competitive spreads
- Does not support any asset classes other than forex
What are low spread or zero spread brokers?
Put simply, low spread or zero spread brokers enable you to trade forex (and sometimes other assets) at competitive bid/ask prices.
The spread is calculated by taking the difference between the bid and ask price. The wider the gap between the two prices, the more you are paying to trade.
This is why low spread forex brokers are so popular, as trading fees can be kept to a minimum. However, as I discuss in more detail shortly, a forex broker offering low or even zero spreads will need to cover their costs and of course – make money.
As such, low spreads are often counteracted by commission fees. In other words, there are low spread brokers that charge high commissions, which means that entering and exiting positions is no longer cost-effective.
At the other end of the spectrum, I came across plenty of so-called commission-free forex brokers. But, when exploring the bid and ask prices, I found that spreads are somewhat wide.
This is why it is important to take into account both commissions and spreads when choosing the best forex brokers for you as the lowest spread forex brokers are not always the best.
Should I choose a zero spread account?
With many forex brokers available to US clients, you have the luxury of choosing a suitable provider based on your trading goals.
Read on to determine whether you should give priority to spreads or commissions when selecting a forex broker.
Casual forex traders
If you are a casual forex trader that is still learning how this investment scene works, then you might be more suitable for a commission-free broker, such as eToro.
The reason for this is that you will likely be trading with smaller amounts. As such, if you were to pay a commission, this is all but certain to make the process unviable.
This is especially the case if you are planning to engage in day trading or scalping, as potential profit margins will already be wafer-thin.
At eToro, you will pay a slightly higher spread of 1 pip to trade major pairs like EUR/USD and USD/JPY. But, you won’t be charged any commissions when entering and exiting a trade.
As such, this is more suitable for trading with smaller account balances.
Professional forex traders
Professional forex traders, on the other hand, will find low spread forex brokers more conducive for their trading objectives.
This is especially the case when trading with larger amounts. For instance, when trading EUR/USD at Forex.com, spreads start at just 0.2 pips.
This represents a spread that is 80% lower than eToro. And, while there is a commission of $5 to pay for every $100k traded, this is just a drop in the ocean when trading larger amounts.
Consider your forex trading strategy
Another consideration to make when assessing whether or not a low spread forex broker is right for you is the specific trading strategy that you wish to deploy.
However, if you prefer swing trading, you will be aiming to achieve much higher profit margins. And as such, slight variations in the spread will be of less importance to your broader trading objectives.
What should I look for in a low spread trading platform?
The process of finding a suitable forex account will require you to consider metrics above and beyond just spreads.
In addition to commissions and other core fees, you will also need to look at minimum account balances, supported FX pairs, regulation, and much more.
In the sections below, I explore these considerations in more detail.
Minimum and average spread
First and foremost, I found that some forex brokers are somewhat disingenuous when it comes to being transparent about the spreads they charge.
- For instance, most forex brokers will display the ‘minimum’ spread available – usually on major pairs like EUR/USD.
- However, this isn’t the spread that you will have access to at all times.
- On the contrary, the ‘average’ spread could very well be much higher.
In order to secure the minimum spread on offer, you will usually need to be trading during busy market hours. This timeframe will often depend on the specific pair that you are trading.
Nonetheless, it is important that you are aware of the average spread for your preferred pairs, rather than assuming that the minimum will be offered at all times.
Another important consideration to make when searching for a low spread trading platform is the type of order execution facilitated by the broker.
In more simple terms, does the broker offer direct access to the wholesale forex market or will it look to trade against your position through a third party dealer?
In this regard, Electronic Communication Network (ECN) brokers are generally sought after by seasoned forex traders. The reason for this is that ECN brokers have access to wholesale rates and thus – the lowest spreads in the market.
Straight Through Processing (STP) brokers, on the other hand, are required to deal with liquidity providers. This can result in less competitive spreads.
I find that beginners often make the mistake of failing to take into account commissions when searching for a low spread forex broker.
For instance, it is all good and well if your chosen broker offers low spreads, but in reality, you might not be trading with competitive fees if an unfavorable commission is charged.
Some online brokers – such as Forex.com, actually enable you to choose a suitable account – depending on whether you prefer tighter spreads or a zero commission framework.
Once again, the option you go with should not only depend on your preferred trading strategy, but whether you intend to trade with small or large amounts of capital.
If you are a day trader or scalper, then overnight financing fees will likely be irrelevant for your strategy. After all, you won’t be looking to keep positions open for extended periods of time.
However, if you prefer to keep positions open for several days or even weeks, then overnight financing fees from your forex broker will need to be factored in.
This is a fee charged for keeping positions open after standard market hours – including the weekend.
In some cases, I found that low spread brokers offer competitive bid and ask prices, but are costly when it comes to overnight financing.
Minimum account balances
Some low spread forex brokers have higher account minimums, especially on premium plans that offer access to the lowest bid and ask prices.
For example, the DMA account provided by Forex.com offers ultra-competitive spreads, but it comes with a recommended minimum balance of $25,000.
If you are a complete beginner that wishes to trade forex with a modest amount of capital, eToro requires a minimum deposit of just $10.
Trading costs need to be considered when choosing your forex broker, especially when looking for a low spread forex broker.
Other key considerations
In addition to fees surrounding spreads, commissions, and overnight financing, you will also need to make a range of other considerations when choosing a suitable forex broker.
For instance, if you are looking to trade specific currency pairs, you will need to ensure they are supported by the respective platform.
You should also explore what trading tools and charting features are available and whether this aligns with your strategy and previous experience.
Also consider trading fees and account minimums for active traders.
Do low spread brokers offer other markets?
Many of the low spread forex brokers that I came across offer access to other tradable markets. This will suit traders that wish to build a diverse portfolio of assets.
For example, eToro not only supports forex, but stocks, ETFs, and cryptocurrencies too.
IBKR and TD Ameritrade are also popular for their broad product offering, which also includes financial derivatives such as futures and options.
What’s the difference between raw spread and a standard account?
Raw accounts are popular with professional traders, as they generally offer access to the wholesale currency markets.
This means that traders will be able to secure the same forex spreads as banks and financial institutions. Furthermore, and perhaps most importantly, raw brokerage accounts do not add a markup on the spreads offered to clients.
Instead, the broker will charge a commission on each trade that is placed. In most cases, the commission on raw spread accounts is a flat dollar amount for every currency lot traded.
In the case of standard accounts, these are usually aimed at casual traders that generally trade smaller amounts.
For instance, at eToro, traders will pay a slight markup on the spreads that the broker is able to secure, but equally, no commissions are charged.
In summary, I have discussed some of the best low spread brokers in the market today.
In addition to low spreads, you should also explore other core fees – such as trading costs and commissions, trading platforms and overnight financing.
And just remember – if you are a casual trader, you could be more suitable for a commission-free account that comes with slightly higher spreads.
To determine the best low spread forex broker for your needs, you will also need to consider your forex trading goals and preferred strategy.
FAQs about low spread forex brokers
Is low spread good in forex?
Yes low spread is good in forex because in an ideal world, you will want to trade forex with the lowest spread possible. After all, the lower the spread, the less you are paying your broker to enter and exit positions.
How do you compare zero spread accounts?
You can compare zero spread forex accounts by assessing the commission charged by the respective broker. This should average $3-5 for every $100k traded. You should also consider important metrics surrounding overnight financing, execution speeds, and minimum account balances.