Segregated Account: The Most Important To Look At When You Choose A Forex Broker

When you trade the forex market through your forex broker, make sure that your broker applies a segregated account policy which can make your fund safe and avoid the broker from using it for their own benefits such as using it for expanding their business or other things. To understand more about a segregated account, let us delve into its definition of it.

Segregated Account

On Securion Pay website explained that a segregated account is a different account that has a different entity from a company's bank account. This means that if you deposit your money to your forex account where the broker is needed, then, your money will be safe in case your broker files bankruptcy because your money is placed in a different account that is completely separated from the broker's bank account.

Aside from that Hellwig (2021) from Investopedia also explained that if the forex broker does not have a segregated account policy, it can make your money susceptible where the broker can use your money whether to buy houses or cars or even take your money without a trace. That is why you have to double-check your broker to know if a segregated account policy is applied.

How Do I Know If My Forex Broker Has A Segregated Account Policy?

Well, to answer this you have to know your forex broker that you use very well by researching the company through its legal documents (usually on its official website) or even from the internet such as the reviews of people who use it. Thus, by knowing the nature of its company you would be able to judge whether the broker that you currently use is decent or not.

Conclusion

A segregated account is really important to check because when you put your money into your forex trading account, your broker must take responsibility for its clients' fund by applying a segregated account policy that separates the broker's money and the fund from its clients. If the broker that you use does not have a segregated account policy then be prepared to lose your money.

Written by Andre I.

References

Hellwig, Basia. 2021. How to Spot a Forex Scam. Retrieved from Investopedia (Accessed June 12, 2022): https://www.investopedia.com/articles/forex/09/spot-a-forex-scam.asp

Securion Pay. A Segregated Account: What It Is and Why You May Need One. Retrieved from Securion Pay (Accessed June 12, 2022): https://securionpay.com/blog/segregated-account/#:~:text=A%20segregated%20account%20is%20a,and%20the%20company's%20bank%20account.