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Affiliate Disclosure
Affiliate Disclosure DailyForex.com adheres to strict guidelines to preserve editorial integrity to help you make decisions with confidence. Some of the reviews and content we feature on this site are supported by affiliate partnerships from which this website may receive money. This may impact how, where and which companies / services we review and write about. Our team of experts work to continually re-evaluate the reviews and information we provide on all the top Forex / CFD brokerages featured here. Our research focuses heavily on the broker’s custody of client deposits and the breadth of its client offering. Safety is evaluated by quality and length of the broker's track record, plus the scope of regulatory standing. Major factors in determining the quality of a broker’s offer include the cost of trading, the range of instruments available to trade, and general ease of use regarding execution and market information.

Top Brokers with Segregated Accounts

Segregated Forex trading accounts have become the industry standard over the past two decades following several scandals involving brokers using client deposits. Forex traders should always use segregated account brokers to ensure the safety and security of their capital, but how can you tell if a broker segregates your deposits from their working capital? Read my segregated account brokers review, to learn how to protect your hard-earned deposits.

1
4.9/5
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
Client deposits segregated from corporate funds.
Reasonable commission-free Forex spreads from 0.9 pips.
2
4.9/5
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
Segregated client deposits & compliance with four regulators.
24/7 multi-lingual customer support & quality education.
3
4.8/5
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
Segregated client deposits at tier-1 banks.
Quality education and research for beginners & 24/5.
4
4.7/5
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
Segregated client deposits & clean ASIC regulatory track record.
$100 minimum deposit requirement & instant withdrawals.

  • AvaTrade, Highly regulated, choice of fixed or floating spreads.
  • FP Markets, ECN trading with leverage up to 1:500.
  • Pepperstone, Great ECN execution on MT4 platform.
  • DNA Markets, Super asset selection for Forex and cryptocurrency traders.

AvaTrade

In Summary Highly regulated, choice of fixed or floating spreads

I rank AvaTrade among segregated account brokers with the best features for novice traders due to its first-class education via the AvaAcademy. The MT4 Guardian Angel plugin and the fee-based Ava Protect insurance policy protecting against losses are quality beginner trading tools. It also has an excellent partnership program for passive income seekers, featuring 70,000 registered partners and $250,000,000+ in commission payouts.

AvaTrade offers its proprietary WebTrader and mobile app AvaTradeGO with Trading Central services, specialized trading platforms Ava Option and Ava Social, and MT4/MT5 for algorithmic traders. The well-balanced asset selection includes cryptocurrencies, ETFs, and options.

Read more on AvaTrade »
4.9/5 in this category

Pros & Cons

  • High quality educational offering via AvaAcademy
  • Excellent choice of trading platforms catering to various trading needs
  • Broad asset selection and cross-asset diversification opportunities
  • Well-regulated and trusted broker with oversight from a central bank
  • Trading costs competitive but nothing special

FP Markets

In Summary ECN trading with leverage up to 1:500

FP Markets upgrades MT4/MT5 with 12 plugins and Trading Central. It also offers cTrader, the geographically restricted IRESS trading platform, and connects social traders to TradingView, where 50M+ social traders interact and share ideas. MAM/PAMM accounts cater to traditional account management services. Meanwhile, copy traders can diversify via embedded MT4/MT5/cTrader services, the in-house FP Markets Copy Trading, Myfxbook AutoTrade, and the fee-based Signal Start. It places FP Markets as the segregated account broker ideal for copy traders.

The well-balanced asset selection includes cryptocurrency and ETF CFDs, and FP Markets offers low commission-based trading fees. VPS hosting ensures 24/5 low-latency Forex trading.

Read more on FP Markets »
4.9/5 in this category

Pros & Cons

  • Choice of trading platforms and auxiliary trading tools
  • Very competitive cost structure and excellent asset selection
  • Low minimum deposit requirement and leverage of up to 1:500
  • Well-regulated and trustworthy
  • Availability of Iress geographically restricted

Pepperstone

In Summary Great ECN execution on MT4 platform

I rank Pepperstone among the segregated account brokers with the most cutting-edge trading tools. It starts with Capitalise AI for algorithmic trading in a code-free environment, which separates Pepperstone from most Forex brokers. The 28-plugin Smart Trader Tools package and Autochartist upgrade MT4/MT5. Pepperstone also connects social traders to TradingView and offers cTrader.

VPS hosting is available for 24/5 low-latency Forex trading, while APIs connect advanced algorithmic trading solutions to the Pepperstone infrastructure. The well-balanced selection includes cryptocurrencies and ETFs. Pepperstone also features competitive, commission-based trading fees with raw spreads from 0.0 pips for a $6.00 commission per round lot.

Read more on Pepperstone »
4.8/5 in this category

Pros & Cons

  • Excellent choice of trading platforms consisting of MT4/MT5, and cTrader
  • Market-leading MT4/MT5 upgrade package, Autochartist, and API trading
  • Social trading support via Myfxbook, MetaTrader Signals, and DupliTrade
  • Leverage of up to 1:30 and superb trade execution
  • Demo accounts have 30-day time limits

DNA Markets

In Summary Super asset selection for Forex and cryptocurrency traders

DNA Markets maintains a competitive cost structure for Forex traders in its commission-based accounts with raw spreads from 0.0 pips for a commission of $6.00 per 1.0 standard round lot. It also maintains 800+ assets, ensuring traders can diversify their portfolios, including cryptocurrency CFDs. DNA Markets offers the MT4/MT5 trading platforms and has no restrictions on trading strategies.

I rank DNA Markets among segregated account brokers with the best deposit and withdrawal infrastructure. Traders can deposit in twelve fiat currencies plus cryptocurrencies. DNA Markets also pays for the first three months of fee-based copy trading provider Signal Start.

Read more on DNA Markets »
4.7/5 in this category

Pros & Cons

  • Competitive, commission-based trading fees
  • Choice of payment processors, including cryptocurrencies
  • Excellent choice of Forex and cryptocurrency pairs
  • MT4/MT5 trading platforms for algorithmic and copy trading
  • Limited commodity asset selection and no ETF trading

What Is a Segregated Account?

A segregated account refers to the separation of client deposits from corporate funds. It means that the broker accepting deposits cannot use client deposits for any purpose except satisfying margin requirements for open positions. Segregated account brokers are the industry-standard, and segregation of client deposits is a regulatory requirement. Therefore, traders should always deposit with a broker operating with a license and a clean track record from a reputable regulator.

Why Do You Need a Segregated Account in Forex?

Traders must use segregated account brokers, as it is the only guarantee, ensuring legal protection that brokers act as custodians of capital without misusing funds for internal purposes. It also confirms regulatory compliance, boosts confidence, and ensures that traders can access their funds as they please, as segregated account brokers will always honor valid withdrawal requests.

Regulation & Segregated Accounts

Segregated account brokers fully comply with regulators, as they must prove client segregation from corporate funds to obtain a regulatory license. Regulators also check if brokers comply with all rules and regulations annually and are quick to issue fines or suspend licenses if brokers fail to follow all requirements satisfactorily. It makes trading with segregated account brokers in reputable jurisdictions a core risk management strategy. Traders should always avoid unregulated brokers or those operating in jurisdictions where segregated accounts are not mandatory.

Differences Between Segregated Accounts and Managed Accounts

Traders must understand the differences between segregated and managed accounts. Segregated account brokers may offer the infrastructure for managed account services under their corporate umbrella.

Aspect
Segregated Accounts
Managed Accounts
Account Structure
Segregated account for each client
Pooled investments of multiple clients
Capital Protection
Protected capital in case of broker insolvency
No protection
Decision Making
Clients make all trading decisions
Fund managers make all trading decisions
Fees
Broker fees
Management fees, which include broker fees
Involvement
Active involvement by clients
Passive involvement by clients
Ownership
Clients’ own capital
Clients trust capital with fund management
Purpose
Safeguard client deposits
Manage client deposits
Regulatory Requirements
Regulatory-mandated segregation of capital
Regulatory oversight with varying degrees
Strategy
Clients choose strategy
Fund managers choose a strategy
Transparency
Clients can monitor the capital status
Dependent on fund manager transparency

How to Determine Whether a Broker Uses Segregated Account

Segregated account brokers always note their segregation of client deposits from corporate funds, and the most transparent segregated account brokers list the banks they use. The easiest way to know whether a broker uses segregated accounts is by trading with a regulated broker with a license from a reputable regulator, a mandatory requirement checked by regulators annually.

Segregated Accounts vs. Separate Accounts

Segregated account brokers always segregate client deposits from corporate funds, offering legal protection of capital against misuse, fraud, and theft. A separate account has no legal protection and could refer to a sub-account within a corporate account where an unregulated broker deposits capital.

Segregated Accounts - Pros & Cons

Before funding accounts with segregated account brokers, traders should consider the pros and cons of segregated account brokers.

The Pros of Segregated Account Brokers

  • Protection of client funds under a legal umbrella.
  • Regulatory compliance, as reputable regulators make client segregation mandatory.
  • Risk mitigation, as brokers cannot use client funds for internal purposes.
  • Transparency and accountability by brokers.

The Cons of Segregated Account Brokers

  • There are no cons to using segregated account brokers.

Bottom Line

Segregated account brokers are the industry standard and ensure that client deposits have legal protection against misuse and fraud. Before client segregation became a regulatory requirement with reputable regulators, brokers could access funds, and fraud was more common.

Trading with segregated account brokers does not just legally safeguard deposits but is a necessary risk management approach by traders and brokers. Regulators ensure that brokers comply with the segregation of client deposits and all other requirements to maintain the license.

FAQs

Is a segregated account safe?

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A segregated account held at a tier-1 bank is safe, as nobody but the depositor can legally access the funds. Brokers act as custodians and must respect the instructions given by traders to access their funds at any time.

Who sells segregated funds?

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Segregated funds are not for sale, which is illegal, as they remain safeguarded by laws. Funds in a segregated account are 100% receivable by the depositor, and the company cannot use them for any purpose.

What is a client-segregated account?

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A client-segregated account is an account held at a bank separate from company bank accounts receiving the deposit.

What is a segregated account?

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A segregated account is an account a company cannot legally access, remains protected by law, and ensures client deposits remain safeguarded. It is the operating standard at regulated brokers.

What is a segregated depository account?

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A segregated depository account refers to a deposit received by a financial institution, like a trader depositing with a broker, that the recipient manages in an account segregated from a corporate account.

Are brokerage accounts segregated?

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Brokers regulated by a reputable regulator must segregate client deposits from corporate accounts.

Christopher Lewis
About Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.