‘Islamic Target Save’ account

Question:-

Kindly advise if ‘Islamic Target Save’ by Absa is permissible? Once a year the investor receives 5% returns which are termed as Halaal profit. Is an interest-free banking account permissible? If it is not permissible, where should one keep one’s money safely? Is there any bank or institution that is Shariah compliant?

Answer:- 

1. We are not fully aware of the “Modus Operandi’ of the ‘Islamic Target Save Account.’ The only information that we were able to access is as follows:

“An Islamic target save account from Absa Islamic banking provides you with returns based on the Mudaraabah (profit share) principle which is ring-fenced and managed independently from other Absa funds.”

This is insufficient information for us to conclude on the Shariah compliancy of the investment. However, when in doubt, one should adopt caution and refrain from using the ‘profits’ earned from the investment.

2. Opening a banking account to protect one’s funds is in order. However, one should ensure that any interest or profits earned in the account should be given out in charity without any intention of reward.

3. We are not aware of any bank that is fully Shariah compliant.

ALLAH TA’ALA KNOWS BEST!

ANSWERED BY:

Mufti Mohammed Desai

Date: 17 Jumadal Ula 1444 / 12 December 2022