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Can A Muslim Keep A Fixed Deposit Account? - Islam for Muslims - Nairaland

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Can A Muslim Keep A Fixed Deposit Account? by abbeydot: 9:47am On Apr 07, 2009
Salam everyone,

Due to the emphasis on avoiding Riba, I have always stayed away from interests on my savings account giving it out to Charity when i feel it is getting close to 500 naira. Of late I have been thinking of growing my money and some people say FIXED DEPOSITS are allowed while some say no. Pls can anyone with a good Islamic Finance Background enlighten me on this. Thanks

Regards,
Ma Salam
Re: Can A Muslim Keep A Fixed Deposit Account? by bilms(m): 1:42pm On Apr 07, 2009
fixed deposit is allowed in islam.

the reason why its allowed is this.

the money has to stay for some certain period.

during this period, the bank use the money for business and the return they give u is ur share from the profit of the business.

so u can put ur money there.

masallam
Re: Can A Muslim Keep A Fixed Deposit Account? by Jarus(m): 7:26pm On Apr 07, 2009
bilms:

fixed deposit is allowed in islam.

the reason why its allowed is this.

the money has to stay for some certain period.

during this period, the bank use the money for business and[b] the return they give u is ur share from the profit of the business.[/b]

so u can put ur money there.

masallam
1, What if the company doesn't make profit?
2, Does the company know the amount of profit they will make before giving you the rate of interest from the onset?
Re: Can A Muslim Keep A Fixed Deposit Account? by Remii(m): 10:29am On Apr 08, 2009
Fixed deposit is allowed with a clause in Islam. 

1. The predetermined interest rate is expected but should not be rigidly binding. The bank would work towards achieving that profit, if they make less you would have to take less if they make more you should get more

2. The bank must make profit through Halal means.

3. So if the terms are as stated above among others, yes you can invest.
Re: Can A Muslim Keep A Fixed Deposit Account? by humblesoul(m): 3:04am On Apr 19, 2009
At the heart of the Islamic prohibition of usury (Riba) is the maxim that if you do not plant, you cannot reap. This constitutes a rejection of the false claim to a ‘time-value’ of money. Money by itself cannot increase over time without any input of labor, or without the risk (of loss or of gain) inherent in an authentic business transaction.

The blessed Prophet declared that any transaction involving an exchange of ‘money’ for ‘money’ must be an equal exchange, i.e., with no difference in amount of money exchanged. He declared that an unequal exchange (that would open the door for money to increase over time) would be Riba. Islam also insists that all business transactions must involve risk – and hence ‘profit’ or ‘loss’. Allah Most High can then intervene to distribute and redistribute wealth by taking from some and giving to others. In this way the rich would not remain permanently rich, and the poor would not be imprisoned in permanent poverty

In his masterpiece entitled ‘Merchant of Venice’, William Shakespeare likened Riba or usury to a ‘pound of flesh’. And in a dream Prophet Muhammad saw the moneylender exposed as a ‘bloodsucker’ since he was standing in a river of blood. We noted earlier that the Prophet cursed “all four”, and declared that “they were all equally guilty—the ones who ‘took’ Riba, ‘gave’ Riba, ‘recorded the transaction’, and ‘the two witnesses’.” Whoever dies with the curse of a Prophet upon him can never escape the hellfire. The Qur’an itself declared that the moneylender would be punished with eternal hellfire:

“Those who devour usury will not stand (before their Lord for Judgment) except as stands one whom Satan by his touch hath driven to madness.That is because they claim that: ‘Business is like lending on interest,’ but Allah hath permitted business and forbidden usury. Those who after receiving direction from their Lord, desist, shall be pardoned for the past; their case is for Allah (to judge); but those who persist (in claiming the interest due from fixed deposits or other such loans on interest) are Companions of the Hellfire; they will abide therein (forever).”
(Qur’an, al-Baqarah, 2:275)

What, then, is the status of someone who makes a ‘Fixed Deposit’ with his money in a bank or any other financial institution? It should firstly be clear that he has not gifted the money. It must also be recognized that he has not entered into a ‘business’ transaction since he is guaranteed the return of his money plus an additional amount. There is no risk. There is no possibility of loss. And hence that is not business! In fact, in making a ‘Fixed Deposit’, he has lent his money on interest (Riba), and has hence become a cursed moneylender.
Re: Can A Muslim Keep A Fixed Deposit Account? by Remii(m): 10:57am On Apr 24, 2009
humblesoul:

At the heart of the Islamic prohibition of usury (Riba) is the maxim that if you do not plant, you cannot reap. This constitutes a rejection of the false claim to a ‘time-value’ of money. Money by itself cannot increase over time without any input of labor, or without the risk (of loss or of gain) inherent in an authentic business transaction.

What, then, is the status of someone who makes a ‘Fixed Deposit’ with his money in a bank or any other financial institution? It should firstly be clear that he has not gifted the money. It must also be recognized that he has not entered into a ‘business’ transaction since he is guaranteed the return of his money plus an additional amount. There is no risk. There is no possibility of loss. And hence that is not business! In fact, in making a ‘Fixed Deposit’, he has lent his money on interest (Riba), and has hence become a cursed moneylender.


Bro Humblesoul

I visit Middle East regularly, Qatar and UAE to be precise and I know that Islamic banks there have fixed deposit account for their customers, instead of blanketly shutting Muslims away from banks there is need to find out the Islamic way of running the accounts.

Like I stated above the term "fixed" is flexible and you could get less or more than agreed amount depending on business outcome. The agreed amount would then serve as a means of making the bank strife to encourage your repeat business,

The prophet of Islam, (SAW) encourage us to learn and expand our depth of awareness, Allahu alam.
Re: Can A Muslim Keep A Fixed Deposit Account? by humblesoul(m): 12:10pm On Apr 24, 2009
Remii:

Bro Humblesoul

I visit Middle East regularly, Qatar and UAE to be precise and I know that Islamic banks there have fixed deposit account for their customers, instead of blanketly shutting Muslims away from banks there is need to find out the Islamic way of running the accounts.

Like I stated above the term "fixed" is flexible and you could get less or more than agreed amount depending on business outcome. The agreed amount would then serve as a means of making the bank strife to encourage your repeat business,

The prophet of Islam, (SAW) encourage us to learn and expand our depth of awareness, Allahu alam.


Bro Remii, thanks for the update, May Allah keep us on the right path, salam
Re: Can A Muslim Keep A Fixed Deposit Account? by littleb(m): 1:32pm On Apr 24, 2009
Salam everyone,

Due to the emphasis on avoiding Riba, I have always stayed away from interests on my savings account giving it out to Charity when i feel it is getting close to 500 naira. Of late i have been thinking of growing my money and some people say FIXED DEPOSITS are allowed while some say no. Pls can anyone with a good Islamic Finance Background enlighten me on this. Thanks

Regards,
Ma Salam

The intention of keeping money in bank has to be purified first as to the fact that people do that because of many reasons. Islam against interest and one should try and stay away from as much as one can. Prophet muhammad stated it as one of the sign of last hour that the usury/interest will be so much common that hardly that even muslims could not escape it. This is evidence by many circumstances we find ourself today, for example loan facilities from bank and financial organizations.
Now, keeping a fixed deposit is like normal account if the intention is purified from enjoying the interest accumulation. This could probably, for future use or any other genuine reasons. Wallah Alaam.
Re: Can A Muslim Keep A Fixed Deposit Account? by davidylan(m): 5:27pm On Apr 26, 2009
littleb:

Salam everyone,

The intention of keeping money in bank has to be purified first as to the fact that people do that because of many reasons. Islam against interest and one should try and stay away from as much as one can. Prophet muhammad stated it as one of the sign of last hour that the usury/interest will be so much common that hardly that even muslims could not escape it. This is evidence by many circumstances we find ourself today, for example loan facilities from bank and financial organizations.
Now, keeping a fixed deposit is like normal account if the intention is purified from enjoying the interest accumulation. This could probably, for future use or any other genuine reasons. Wallah Alaam.

ridiculous "sign of the last hr" . . . lending money out for profit is as old as over 2000 yrs ago! cheesy Even the word "usury" is way older than Mohammad himself . . . so what exactly was this "sign of the last hour"?
Re: Can A Muslim Keep A Fixed Deposit Account? by temi 4 rea(f): 9:46am On Apr 27, 2009
@Poster
Of course yes all he has to know is talk with the bank on the interest issue and thats all or better stl give the interest out as sadaka!
Re: Can A Muslim Keep A Fixed Deposit Account? by kandiikane(m): 3:40pm On May 31, 2012
Erm, I opened an Isa account because I'm a student n they put on an interest of 8p or 9p depending on how much I put n how long its been there. O.o
Re: Can A Muslim Keep A Fixed Deposit Account? by ismhab(m): 3:45pm On May 31, 2012
WHAT ARE U WAITING GO OPEN ACCOUNT WITH JAIZ BANK, LEAVE ALL THESE YEYE RIBA BANKS.
Re: Can A Muslim Keep A Fixed Deposit Account? by MR MICKMEN: 3:58pm On May 31, 2012
NOOOO a muslim cannot use fixed deposit its haram according to S.A.W. use the money to sponsor jihad and boko haram and heaven is yours. hypocritical

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Re: Can A Muslim Keep A Fixed Deposit Account? by Dyt(f): 4:04pm On May 31, 2012
are u kiddin me?
blinkin . . . . . .
wat kind of a muslim am i oooooo

i nid 2 know d rules of Islam fast
Re: Can A Muslim Keep A Fixed Deposit Account? by kandiikane(m): 4:06pm On May 31, 2012
Lol @dyt
Re: Can A Muslim Keep A Fixed Deposit Account? by maclatunji: 4:12pm On May 31, 2012
Nice and tidy please.
 
Re: Can A Muslim Keep A Fixed Deposit Account? by Dyt(f): 4:14pm On May 31, 2012
kandiikane: Lol @dyt
lyk seriously wen i read n hear sm rules am always lyk wat?
Re: Can A Muslim Keep A Fixed Deposit Account? by ashson: 4:17pm On May 31, 2012
All forms of interest in islam is prohibited, No any option.
 
Re: Can A Muslim Keep A Fixed Deposit Account? by freecocoa(f): 4:28pm On May 31, 2012
Seriously?

Now this is something.
Re: Can A Muslim Keep A Fixed Deposit Account? by scopusng(m): 4:31pm On May 31, 2012
Foo.ls, shine yah eyes op
Re: Can A Muslim Keep A Fixed Deposit Account? by reloboy(m): 4:37pm On May 31, 2012
I don't think there's anything wrong with that undecided
Re: Can A Muslim Keep A Fixed Deposit Account? by ziccoit: 4:48pm On May 31, 2012
davidylan:

ridiculous "sign of the last hr" . . . lending money out for profit is as old as over 2000 yrs ago! cheesy Even the word "usury" is way older than Mohammad himself . . . so what exactly was this "sign of the last hour"?

Read and understand.
Islam left nothing unexplained. Just think of it.
Islam is certainly the true religion of Allah. I thank Almighty Allah for making me a Muslim and I pray Him to make me a better one.
Re: Can A Muslim Keep A Fixed Deposit Account? by CHESSBOARD(m): 4:52pm On May 31, 2012
Dyt: are u kiddin me?
blinkin . . . . . .
wat kind of a muslim am i oooooo

i nid 2 know d rules of Islam fast

U need my address for tutorial??..first class I tell you,
And you Muslims I can help you open it on ur behalf wink.
Re: Can A Muslim Keep A Fixed Deposit Account? by fesse(f): 5:07pm On May 31, 2012
So many issues with this "religion of peace" undecided undecided

1 Like

Re: Can A Muslim Keep A Fixed Deposit Account? by ifyalways(f): 5:12pm On May 31, 2012
Interesting. . .
Re: Can A Muslim Keep A Fixed Deposit Account? by rawtruth(m): 5:34pm On May 31, 2012
Remii:

Bro Humblesoul

I visit Middle East regularly, Qatar and UAE to be precise and I know that Islamic banks there have fixed deposit account for their customers, instead of blanketly shutting Muslims away from banks there is need to find out the Islamic way of running the accounts.

Like I stated above the term "fixed" is flexible and you could get less or more than agreed amount depending on business outcome. The agreed amount would then serve as a means of making the bank strife to encourage your repeat business,

The prophet of Islam, (SAW) encourage us to learn and expand our depth of awareness, Allahu alam.

Your views and those of Humblesoul represent the moderate and extreme positions that have remained the bane of mankind's attempt to apply purely religious concepts on every fact of life. Apply Humblesoul's extreme position on moral issues and the resultant effect could be anything but orderly.

1 Like

Re: Can A Muslim Keep A Fixed Deposit Account? by komole: 6:04pm On May 31, 2012
Fixed deposit is allowed in saving the money on the condition that at the end of the fixing period (expiration of contract) there is no interest to by added to the bank on the fixed account. i.e if N200 was fixed for the months, then the same N200 should be paid without adding a kobo on it as interest.

Fixed monies are used by islamic banks to borrow others who are also to return same without paying the bank interest.

ISLAM IS SUCH A BEAUTIFUL RELIGION

Allah Perfected it in other not to stress anyone.


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Re: Can A Muslim Keep A Fixed Deposit Account? by sharp man(m): 6:13pm On May 31, 2012
abbeydot: Salam everyone,

Due to the emphasis on avoiding Riba, I have always stayed away from interests on my savings account giving it out to Charity when i feel it is getting close to 500 naira. Of late i have been thinking of growing my money and some people say FIXED DEPOSITS are allowed while some say no. Pls can anyone with a good Islamic Finance Background enlighten me on this. Thanks

Regards,
Ma Salam

That is the irony in Islamic Banking / Finance.

In it's strictest form, fixed deposit is not allowed as the depositor is earning interest on an investment. Islamic banking is clearly against earning any form of fixed interest or any interest for that matter.

But in my opinion, whether you call it interest or profit.......it is simply an addition to your investment. So i believe Islamic banking is not different from the conventional banking.....its just a case of changing names while the substance is the same.
Re: Can A Muslim Keep A Fixed Deposit Account? by saintneo(m): 6:23pm On May 31, 2012
bilms: fixed deposit is allowed in islam.

the reason why its allowed is this.

the money has to stay for some certain period.

during this period, the bank use the money for business and the return they give u is ur share from the profit of the business.

so u can put ur money there.

masallam
Do you know what business it is? What if the money is used by a Bank Customer that trades in Nigerian Breweries products.

Sorry to spoil the plan but when thinking of business, think about Profit then People.
Re: Can A Muslim Keep A Fixed Deposit Account? by LagosShia: 6:34pm On May 31, 2012
Rulings on deposting money in banks as per the view of Grand Ayatullah Ali Sistani:

Q62: What is the ruling on depositing money in banks sponsored by Muslim and non-Muslim governments, with the stipulated condition of receiving interest?

A: Depositing in banks of non-Muslim countries is permissible in every case, even if it is under the stipulated condition of obtaining interest. As for depositing in government banks of Muslim countries under the stipulated condition of obtaining interest, then it is prohibited. But, if it is without this condition, then the issue is free of interest (riba) but it is not permissible to spend the acquired money without referring to al-hakim al-shar'ie (legal expert in islamic jurisprudence) or his representative. (FM, p. 405)

Q63: Is there a difference here between the principal and interest which the banks (in Muslim countries) give to the depositor?

A: No, there is no difference between them. One is not permitted to spend from anything taken from government banks in Muslim countries except by referring to al-hakim al-shar'ie or his representative. (FM, p. 405)

Q64: If I know that the bank will give me interest even without stipulating the conditions, is it permissible for me to deposit in a savings account that takes the form of a term-deposit?

A: Yes, it is permissible, as long as you do not stipulate the conditions of interest. (FM, p. 406)

Q65: Is it permissible to take interest from unbelievers, especially for those who live in their countries?

A: Yes, apparently one is allowed to take interest from the unbelievers, whose property is not honored. God knows best. (MMS, p. 27, Q49)

Q66: A national bank (in a Muslim country) offers a project to its clients in which a person deposits a sum of money in the order of 1,000 dirhams as a deposit which can be withdrawn at any time. It announces that after a period of time, a lottery will be drawn and the bank will grant a specific gift to the investors. Is it permissible to deposit with this intention?

A: Depositing with the condition of a gift is usury and therefore prohibited. By condition is meant to make the deposit with the requirement that the bank should give the gift. But the mere knowledge that the bank will grant it (gift) does not harm the permissibility of investing and the lawfulness of the granted gift. God knows best. (MMS, p. 36, Q76)

Q67: A person does not own a house to reside in. Is it permissible for him to borrow from government banks with interest for the purpose of building his own house?

A: It is not permissible to borrow with the condition of interest for any reason, but it is permissible to take the money from it (bank), though not with the intention of a loan, and to legitimize its spending by referring to al-hakim al-shar'ie or his representative. (FM, pp. 406-7)

http://sistani.org/index.php/biography/index.php?p=251364&id=50&pid=2440

Question :
If a Muslim tries to get from the bank’s cash dispensing machine some of his own money and more money than what he had asked for is dispensed, is he allowed to take the extra money without the bank knowing about it?

Answer :
It is not allowed.

read more on related issues:

http://www.sistani.org/index.php?p=616687&id=1132

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