Living on interest from bank deposits
18-5-2002 | IslamWeb
I've read about considering banks interest as Reba. And I'm asking you to give me clear vision on this issue that would help me to make the right decision, Insha Allâh. Banks in Egypt claims to give varying interest which is around 9.5percentage: 10.5percentage these days. I'm not sure if the bank invests all its money in loans with fixed interest or it invests money also in projects that profits the bank. I would like to know what specific transaction of the bank that is considered Reba. I'm an Egyptian studying in USA, I've no fixed income right now, and I've some money in a bank in Egypt that I inherited from my family. The interest of this money represents my main source of income that helps me to cover my living expenses. If banks have Reba, then what is the alternative? Please advice me if there are Islamic banks that I can invest my money in. I understand that solidifying the money in gold or other fixed assets would not be a right thing to do.
Praise be to Allah, the Lord of the World; and may His blessings and peace be upon our Prophet Muhammad and upon all his Family and Companions.
Every bank that provides a fixed interest rate that does not subject to the principal of partnership concerning the matter of loss and profit, is a usury-taking bank, since giving loan with a fixed interest rate is the same practice that was used in pre-Islamic period. The ruling will not change even if the bank invests in permissible projects.
Therefore, you should draw your money from such a bank and it is forbidden for you to use the interest money or spend it on those who are under your sponsorship. Likewise, it is also not permissible to leave the interest for the bank; instead take it and spend it on what is beneficial for Muslims with the intention of getting rid of it, not with the intention of charity.
Allah knows best.