What is a Deposit Bonus in Forex Trading?
By Space Coast Daily // July 10, 2022
Brokerage companies use promotional offers to gain more customers, and one of the most commonly used ones is the forex deposit bonus. The deposit bonus works in such a way that the trader is rewarded for depositing into the trading account for the first time, and it is called the welcome bonus in forex.
The reward can be based on a percentage of the amount deposited or a fixed amount of money.
Most traders receive the deposit bonus after depositing for the first time into their accounts. Some brokerage deposit bonuses are claimable by the users every time they deposit into their accounts. This form of deposit bonus is called reload deposit bonus. Traders can increase their trading capital with the deposit bonus since opening new positions will be possible. Also, the profits realized from trading will increase with increased trading capital.
A good brokerage will offer a reasonable amount or percentage of money as their welcome deposit bonus. However, traders should not get carried away with the welcome deposit bonus as other factors like the terms and conditions, quality of trade execution, and commission structure are worth considering when selecting a brokerage. Thus, checking the deposit bonus any brokerage offers is imperative before opening an account with them.
Types of Forex Deposit Bonuses
The forex deposit bonus is of different types, with some offered to new users after depositing once and some offered every time they make a deposit. Every broker always has its terms and conditions attached to the deposit bonus, making it important for new users to read to avoid having problems with using or withdrawing the deposit bonus. The terms and conditions differ from one trading platform to another since the brokers have the prerogative to make the rules themselves. The allowing are the different types of Forex Deposit bonuses:
Welcome Forex Deposit Bonus
As the name implies, it is a welcoming bonus and only available for traders who just an open account with a trading platform. Most times, it is the highest bonus usually received by new users, requiring depositing into the new account to be eligible for the bonus. After registering with the broker and depositing, the bonus becomes claimable. The offer expires after you start trading. An example of a broker that offers this type of bonus is MTrading which offers a 200% welcome forex deposit bonus.
Imagine getting an additional amount for every deposit you make; that is what the reload bonus is all about. Traders will have the opportunity to increase their trading capital every time they deposit into their accounts. However, compared to the welcome deposit bonus, it is usually lesser since the welcome deposit bonus is a one-time payment. The major disadvantage to the reload bonus is for traders that do not deposit into their accounts consistently. Some already have money in their trading account, which they use in trading. They do not have a reason to deposit into the account again since the amount there is enough to trade, thus, depriving them of benefitting from the reload bonus.
However, some brokers offer such traders the opportunity to benefit from the cashback bonus. The cashback bonus does not involve depositing to get credited. It is paid based on the number of trades executed in which the trader will receive a certain percentage of the money used in trading.
How to Receive Forex Deposit Bonus
Before discussing the differences between the deposit bonus and other types of bonuses, it is imperative to discuss the steps involved in claiming these bonuses. First, new users need to take to receive the forex deposit bonus. There are basic steps peculiar to all the brokerages when trying to claim deposit bonuses. Although, there is additional information on each broker’s terms and conditions, which vary. Generally, follow the steps below to revive the forex deposit bonus:
- Go to the broker’s website and register for the trading account.
- Verify your telephone number and email.
- Upload your passport or any other means of identification for verification.
- Deposit at least the minimum required amount into the trading account.
After completing the steps above and complying with any other requirements as stated in the terms and conditions, you are in the position to receive the Forex deposit bonus. But the time it will take for the account to be credited depends on the broker. It only takes a few minutes for some brokerages to credit the account of the new users, whereas some brokerages take more than that. At most, within 24 hours, new users ought to have received their deposit Forex bonus.
Differences between Forex Deposit Bonus and Other Types of Bonuses
The Forex deposit bonus is just one of the promotional packages for their users. A popular promotional offer is the no deposit bonus, whose difference from the welcome forex deposit bonus is glaring. Unlike the welcome forex deposit bonus, the no deposit bonus does not require depositing into the trading account before being claimable by new users. Also, the no deposit bonus amount is usually small compared to the deposit bonus. Most no deposit bonuses are usually in the range of $5 to $100.
The cashback bonus is another promotional offer brokers provide their users, and unlike the deposit bonus, it does not require depositing into the trading account to be eligible. The number of trades executed usually determines the size of the bonus.
Brokers use different means to entice new users to create a forex account, and one of the commonly used means is the deposit bonus. The deposit bonus is one of the promotional offers of brokers that involve the new users depositing money into the newly opened account. Some brokers offer a fixed amount for the deposit, whereas some offer a fixed percentage of the user’s deposit. As a trader wanting to open a new forex account, always check the broker’s promotional offer before opening an account. Also, knowing the terms and conditions of the bonus is important for easy claiming and withdrawal.