No-deposit bonus versus a demo account
A demo account and a no-deposit bonus differ in the money used, the kind of account and how a withdrawal works. A plain comparison.
Published ・ MyBrokerBonus Editorial
A no-deposit bonus and a demo account both let you try trading without putting in your own money, so they are easy to confuse. They are different things. A demo account is a practice account that uses virtual funds. A no-deposit bonus is something a broker adds for real trading, not virtual funds. This guide sets the two side by side on three points, then looks at three ways a demo account meets a live account, using the wording of the terms.
The bonuses and the demo contests are offered by the brokers, not by this site. This article does not say which is better and does not rank any broker. Amounts and dates are left out of the text, because brokers change them. Read each broker’s official page for the current details.
The two side by side: the money, the account and a withdrawal
Gains and losses on a demo account are not real money. For that reason a profit on a demo account cannot be withdrawn. This is the general idea of a demo account, not the specification of any one broker. The data on this site does not hold the demo-account specifications of individual brokers.
A no-deposit bonus is added by the broker; it is not money you deposited. Its form differs by offer. AXIORY’s is credit on a live account. Tickmill’s Welcome Account is a separate account that receives a complimentary balance, and its terms say it has trading conditions identical to the live Raw account. How a withdrawal works is written in the terms of each offer.
Demo account
A practice account. Gains and losses are not real money.
No-deposit bonus
Trades use real trading conditions, not a demo. The bonus amount itself is stated as not withdrawable in the terms we checked.
The demo column is the general idea of a demo account. The bonus column follows the terms of the offers listed on this site.
The English terms of an AXIORY no-deposit offer say this about the credit itself.
The NDB is non-withdrawable and may be used as margin for trading purposes only.
AXIORY, official page
What it means. In this AXIORY offer the credit works as margin for trading, and it cannot be withdrawn as it is. The quote says nothing about the profit. You have to check the profit in a separate clause.
The way a profit can be released falls into one of the kinds in the next figure: no condition, unlocked by conditions, within a limit, or moved once and then the account ends.
No condition
The terms say profit made with the bonus can be taken out freely.
Unlocked by conditions
Volume, number of trades or a first deposit must be done first. Until then the profit stays locked.
Within a limit
Only a stated range of the profit can be moved out. The rest is not paid.
Moved, then the account ends
The profit is moved to another place, and the account that made it can no longer be used.
The length of each bar is drawn only to show the difference. It is not any broker's amount.
Three ways a demo account meets a live account
On its own, a demo account is a practice account. Yet the terms do contain places where a demo account meets a live account. The data on this site confirms three.
- You stay on the demo account. The funds stay virtual and no real money moves.
- You upgrade the demo account to a live account and claim a bonus.
- You compete in a demo contest, and the prize goes to a live account.
- Stay on the demo accountThe funds stay virtual. No real money moves in or out.
- Upgrade the demo account to a live account, then claim a bonusThe path written in AXIORY's steps. The account that receives the credit is a live one.
- Compete in a demo contest, and the prize goes to a live accountHFM and Traders Trust describe it this way. The contest is on demo; the prize is not.
Whether another broker offers any of these is in its own terms. The data does not say.
The second way is written in AXIORY’s steps. If you are using a demo account, you upgrade to a live account first, and the credit is received on the live account.
The third way is the demo contest. HFM’s contest is named Virtual to Real, and its terms describe it as having no monetary risk.
Participate in our ‘Virtual to Real’ Demo Contest where there’s no monetary risk
HFM, official page
What it means. You can take part in the Virtual to Real demo contest without monetary risk. You compete on a demo account, but how the prize is treated is written in a separate clause. The prize amount is left out of this article because it can change.
How a demo contest is read is explained in HFM demo contest: rules and how to enter and Forex trading contests and demo contests. For the restrictions on a no-deposit bonus, see No-deposit bonus restrictions.
Point
Two questions tell them apart. "Am I using virtual funds, or credit on a live account?" and "Can the profit on that account be withdrawn?" Even when a name includes "bonus" or "contest", check both in the wording of the terms.
Checklist before you apply
- Is the account that receives the offer a demo account or a live account?
- If it is a demo account, is there a step to upgrade it to a live account?
- Can the credit itself be withdrawn, or only the profit?
- For a contest prize, into which account does it go, and in what form?
- Is your country of residence eligible?
All of this stays within what the data on this site holds. For the demo-account specification of a broker the data does not cover, read that broker’s official page.
Risks to keep in mind
Trading with leverage can lose money quickly. Using a bonus does not remove the loss on a trade. This article does not recommend any broker. Read the broker’s full terms before you open an account, and only trade with money you can afford to lose.
