Opening Bank Accounts

By Mufti Ebrahim Desai
Posted: 2 Rajab 1424, 30 August 2003

Q.) Is it correct to keep a saving or money market account (both account accrue interests) even if we dispose off interest to needy without any intension of reward? Please explain your answer? [Owais]

A.) As a general rule, no Muslim by his free choice should deposit his money into an interest bearing account. (Contemporary Fataawa pg.160; Mufti Taqi Usmani)

Depositing money in a commercial bank results in two evils, the taking of interest and aiding in haram on account of the bank using your funds to grant haram loans. (Ahsanul Fataawa vol.7 pg.14; Fataawa Raheemiyyah vol.2 pg.192). Thus, the ideal situation would be to protect the money in a safe place or use a safety deposit box. If out of necessity, one has to open up a bank account, then one should open an interest-free account. In case even that is not possible, one should dispose of the interest money by giving it to the needy without the intention of reward. (Fataawa Mahmoodiyah vol.4 pg.200)

Some banks offer accounts which do not reap interest, while at the same time no bank charges are levied on them. This is an alternative which could be adopted in the event of the need to open up a bank account.

And Allah Ta'ala Knows Best