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Itโs necessary to register with reputable brokers who provide ZAR-denominated accounts if you want to start trading on the South African foreign exchange market.
The Rand (ZAR), which serves as the nationโs official currency, enables South African Forex brokers to perform all required financial transactions.
In order to offer convenience and flexibility to traders from South Africa, a sizable number of forex brokers permit them to open ZAR accounts.
Additionally, you should look for a broker platform that is user-friendly for beginners and that provides a number of trading tools if you want a more simplified trading experience. Here, we explore 5 reasons to trade with a ZAR account Forex broker.
1. You wonโt have to pay currency conversion fees
Trading with Forex brokers with ZAR account has this as its biggest benefit. When you deposit or withdraw money in ZAR using a USD trading account, your broker or bank may assess conversion costs in addition to possible commission.
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Most foreign brokers will also provide you with a subpar ZAR to USD conversion rate, resulting in further financial losses. If you are a high-volume trader, these losses may accumulate over time.
2. You wonโt have to convert currencies when trading
This only applies if you trade currency pairs with the ZAR as the quotation currency, such as USD/ZAR or EUR/ZAR. However, it is still a significant benefit.
These trading expenses might add up over time because certain brokers will also charge a commission and provide you with a subpar exchange rate.
Having a ZAR account could eventually work against you if you primarily trade currency pairs with another currency than the ZAR as the quote currency, such as EUR/USD.
3. Deposits and withdrawals will be faster
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Making deposits and withdrawals from ZAR Accounts typically, although not always, happens considerably more quickly than with USD accounts. Whether your forex broker maintains your ZAR trading account in a South African bank will determine this.
Even if you store your ZAR trading account abroad, it may still take two to three days for deposits and withdrawals to appear.
4. Bank costs will be cheaper
For traders who fill their accounts with bank transfers or credit cards, ZAR accounts are also less expensive. You risk losing 7โ10% of the value of your deposit if you ask your bank or credit card provider to fund a USD account due to conversion costs and other fees.
Additionally, local banks are far faster at transferring money, so traders may typically make deposits and withdrawals within 24 hours.
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5. You will enjoy legal protection
In the event that your broker files for bankruptcy, your funds will be safeguarded under South African law if they are held in a bank located in that country.
This is one further advantage of holding a ZAR account. If you have a USD account with an international broker, this will not be the case. Even if your assets are maintained in a segregated account, the cash will still be stored in an offshore bank account.
