What is the Islamic view on savings accounts?


The nazim of Dar-ul-Ifta [department for Islamic verdicts] requested Huzooraa for guidance on depositing money in state-owned banks and using the profit earned on that money on personal needs. Huzooraa, in his letter dated 21 November 2017, gave the following reply:

“My point of view on this issue corresponds with the decision that was made during the Khilafat of Hazrat Khalifatul Masih IVrh.”

The decision that was made during the Khilafat of Hazrat Khalifatul Masih IVrh is as follows:

“The following recommendations on this issue were submitted to Hazrat Khalifatul Masih IVrh by Sadr Anjuman Ahmadiyya Pakistan:

‘Sadr Anjuman Ahmadiyya is not earning interest of any kind on the money deposited in banks, nor is the provident fund money being deposited in such banks whose business model or means of earning is based on interest. The funds are rather invested in a public body under the government’s national savings scheme.

‘This body invests its profits in national welfare programmes (and not in any interest-based businesses). As a result, the economy is growing and more employment opportunities are being created, which again increases in the revenue collected by the state. In this way, the government shares the profits with the depositors and terms it as profit. Whenever a depositor needs his money, he takes it out at will.

‘Due to this difference between banks and national savings schemes, the provident fund money was invested in this public body with the permission of Hazrat Khalifatul Masih IIIrh. Likewise, with the permission of Hazrat Khalifatul Masih IVrh, the funds collected through Bilal Fund and Tazkiyah Amwal Fund have also been invested in the savings schemes.

‘It is also the view of the mufti of the Jamaat ([then] Hazrat Malik Saifur Rahman) that one can participate in the savings schemes launched by the government.

‘He writes, “If someone wishes, they can participate in the savings schemes that have been launched by the government and can utilise the profit that is generated from them for his personal needs.”

‘Moreover, there is no alternative system or secure institutions where one can invest their money and which could keep their capital safe, profitable or at least unharmed by inflation. (Hence, instead of investing money in banks, where there is money trade, which is clearly based on interest, the funds have been invested in such schemes which have been declared free from interest by the government because the profit is being invested in national welfare and other constructive causes or at least such public bodies are not clearly and definitely involved in interest-based businesses.)

‘A possible solution could also be that the Jamaat initiates such businesses using its capital that are definitely free from the filth of interest. However, the current environment of the country through which the Jamaat is going is not conducive for such an investment.

‘Hence, investment in the national savings schemes is a kind of compulsion while on the other hand, there is no alternative system of investment available in the country.’”

Hazrat Khalifatul Masih IVrh accepted these recommendations by Sadr Anjuman Ahmadiyya Pakistan on 13 August 1987 and wrote,

“It is fine.”

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