Fixed Deposits in Banks

27-5-2001 | IslamWeb

Question:

Is keeping money in banks as "fixed deposit" acceptable in Islam or not, because it generates and doubles the amount one deposits after a period of 5 years? This involves no risk at all and Islam says where there is no risk its "Haram". Please confirm this matter.
If I want to deposit money as fixed deposit and after 5 years I withdraw double the amount and give 50% of the generated money (minus my actual deposit) to the poor to buy a house or any other thing. Can I do that? Please confirm. Thank you.

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Answer:

All perfect praise be to Allah, The Lord of the Worlds. I testify that there is none worthy of worship except Allah, and that Muhammad is His slave and Messenger.

All bank interest is forbidden. In fact, interest is nothing but Riba (usury and interest), and the prohibition of Riba is well known to all Muslims.

As for your depositing an amount in a bank that deals in Riba in order to get some interest and give that interest or part of it to the poor or the needy, then such a transaction is forbidden. Riba is vicious and evil. So, it is unlawful to own it.

Allah is good and accepts only that which is good. So, if you do what you intend to do, you will commit a sin even if your intention is to give the interest as alms.

We advise you to invest your money in an Islamic Bank and we believe that you may receive more profit than with a usury-taking bank.

You may then give 50% of this lawful profit to the poor and the needy. And we hope Allah will accept it then.

For more benefit, please refer to Fataawa 82049 and 81375.

Allah knows best.