Best CFD Trading Accounts
What is a CFD trading account?
An online CFD trading account is an account where you can deposit funds for the purpose of investing in CFDs. When you have a CFD trading account with an online CFD brokerage, you can use their trading platforms to buy and sell various asset classes such as stocks, forex currency pairs, cryptocurrencies, commodities, precious metals, energies and more.
What makes a good CFD trading account?
Most CFD brokers will offer a variety of CFD account types to cater to the different needs and investment sizes of CFD traders. Whether you’re looking to invest for the long term or buy and sell CFDs regularly, you can find a CFD broker that provides your ideal account. Some of the key features to consider when looking for the best CFD trading account for you include:
One of the most important things to look for is that the CFD trading account is offered with a CFD brokerage firm that is regulated. A regulated CFD broker can give investors certain protections that an unregulated CFD broker cannot.
Minimum CFD trading account deposit
Each CFD trading account will have a minimum investment size required to open the account. Some CFD brokers offer accounts from just $1 whereas other specialised account types can require much larger deposits of $500+.
CFD trading account leverage
A leveraged CFD trading account allows you to trade with a larger position size than you would be able to without leverage. Whilst this can also increase potential profits, it can also significantly increase risks. You should make sure that you have a clear understanding of how leverage works and only open a CFD trading account with a leverage that you feel comfortable with.
CFD trading platforms
If you are familiar with a particular CFD trading platform then you may want to make sure the CFD account type offers that platform. If you are new to online CFD trading then you may wish to consider a CFD trading platform that is user friendly such as the popular MetaTrader platforms which are provided by most CFD brokers. The trading brokers review team have compiled a list of our best MetaTrader brokers. Some investors may wish to use a social trading platform so if you do, check that this is available before you open a CFD trading account.
CFD trading tools
When you are looking to trade CFDs online, you are likely to need some tools to analyse the various markets. This can include technical indicators, fundamental tools such as economic calendars and sentiment analysis, trading calculators, Trading Central, etc. The more tools a CFD account has, the more detailed market analysis you will be able to conduct. If there is a particular tool that you cannot trade without, it may be worth making sure that it is available on your chosen CFD account.
CFDs available to trade online
Some brokers offer the same CFDs for trading across all account types whereas others have a different selection depending on the account. You will want to make sure that the CFD trading account that you are considering has all of the CFDs that you would like to trade online now and in the future.
CFD account commission
When you trade CFDs online you will usually need to pay a commission fee to the CFD broker for entering and/or exiting your positions. Check the commission on each CFD trading account and consider how it will affect your money management and if it is a charge that you are happy with.
CFD account spreads
When you are trading CFDs online, you may need to pay a spread for each position that you take. The spread is the difference between the bid and ask prices of the CFDs. Some CFD brokers offer fixed spread and variable spread accounts. You should make sure that the spread type and size is suitable for your CFD trading strategy. E.g. CFD traders who use scalping strategies usually require low spreads whereas swing traders may not be so concerned with the spreads.
CFD account fees
In addition to the commission and spreads, CFD trading accounts can incur other fees that you should be aware of and clarify with your CFD broker if need be. Other CFD trading fees can include rollover/swap, account inactivity fees and deposit/withdrawal fees. If you are looking to save on trading costs as much as possible, you can take a look at our best discount brokers.
CFD account funding options
The CFD trading accounts provided by brokers will support different methods to make deposits and withdrawals to and from your account. Common payment options include bank wire, credit/debit card and online payment processors such as PayPal, Skrill and Neteller. You should check that the CFD brokers accounts support those methods that are most convenient to you, considering how long each can take and the costs that may be involved.
Brokers can have different execution models on each CFD account type. Some CFD brokers utilise an STP/ECN model with no-dealing desk (NDD) interference and thus no conflict of interest between broker and traders. Others will incorporate a market maker model which means that they take the opposite side of the trade. You should consider what execution type you would prefer and choose the relevant trading account type.
Most CFD brokers use a combination of liquidity providers (LPs) such as banks and funds. This is where they get their price quotes from. Usually, the more LPs that a CFD broker has, the better the prices they can offer to CFD traders are.
Some CFD accounts have minimum and maximum position sizes. You should check that the account type you are considering supports the position sizes you plan to use now and in the future.
It can be beneficial especially for beginners to opt for a CFD broker that has a trader’s academy with a selection of CFD trading guides, tutorial videos and webinars. These can help to familiarise users with the difference between the CFD trading account types provided. If you are new to trading online and would like as many educational resources as possible, you may wish to take a look at our best brokers for beginners.
Best CFD Trading Accounts: Open A CFD Account
Opening a CFD trading account
Opening a CFD trading account requires that you provide your chosen CFD brokerage with some personal information which will usually include your contact details, proof of identity and address confirmation. This is a normal part of know your customer (KYC) procedures to ensure that brokers are compliant with anti-money laundering (AML) policies. Some brokers will ask for details about your financial experience which is just to make sure that their CFD trading services are suitable for you.
Once your trading account has been verified which can be within the same day, you are able to make a deposit and trade CFDs online. Different CFD brokers may have different requirements depending on the jurisdiction and how its business operates. Simply choose a CFD broker and CFD trading account that meets your needs, follow the account opening process and you will be able to start trading CFDs online.