Overnight swap and swap-free accounts
What you learn in 3 minutesA swap is the daily cost of holding a leveraged position overnight, and on one standard lot of USD/INR it can be a visible rupee amount. A swap-free account removes that charge, but it usually replaces it with a different fee, so the total cost still matters. This lesson shows how to compare the two using ₹ figures, not just the word free.
One lot held overnight: swap against swap-free
| Step | Amount | Note |
|---|---|---|
| Position size | 1 standard lot | USD/INR, 100,000 units |
| Price used | 83.2500 | example rate, not a live quote |
| Value of one pip | ₹10 | 100,000 x 0.0001 |
| Swap on a standard account | ₹45 | 4.5 pips charged for one night |
| Swap on a swap-free account | ₹0 | no overnight interest charge |
| Administration charge on swap-free | ₹60 | fixed charge for the same night |
| Standard account total | ₹45 | swap only |
| Swap-free account total | ₹60 | administration charge only |
Brokers vary in how they calculate and round swap, when they apply it, and what they charge on a swap-free account. Some add a wider spread or a fixed fee instead. Always check the broker's own schedule.
The mistake people make here
The common mistake is choosing a swap-free account only because the word free sounds cheaper. In the example above, the swap-free account costs ₹60 while the standard account costs ₹45, so free is not automatically less. Another mistake is holding a position for weeks without checking whether the daily charge is eating into the result. Instead, ask the broker for the exact swap or administration charge, then multiply it by the number of nights you expect to hold.Check yourself
A standard account charges 3 pips per night on one standard lot of USD/INR. What is the swap cost in ₹ for four nights?
One pip is ₹10, so 3 pips is ₹30 per night. Four nights cost 4 x ₹30 = ₹120.
A swap-free account charges ₹50 per night. Is it cheaper than the standard account in the previous question over four nights?
No. The swap-free cost is 4 x ₹50 = ₹200, which is more than the standard account's ₹120.
In India
- Regulator
- SEBI
- Example instrument
- USD/INR
- Example rate
- 83.2500
- Value of one pip on one standard lot
- ₹10
- Common payment methods
- UPI and bank transfer