Interest-free savings accounts: what participatory banks offer
AmanaFi team · Updated · 1 min read
Participatory banks offer accounts and financing designed to avoid interest, with contracts such as murabaha or mudaraba. Before opening an account, understand what you are actually buying.
Two main kinds of account
Two logics are generally distinguished.
- Current account: the money is a deposit available at any time, with no promised return.
- Investment account: the money is entrusted to be invested, with profit sharing and a possible loss depending on the contract.
What differs from interest
In a lawful investment account, the gain comes from a real activity and is not guaranteed in advance. A fixed, guaranteed return on a loan of money is interest, which Islam forbids.
Questions to ask
To choose, ask for written answers.
- Is the capital guaranteed or not?
- How is profit calculated and shared?
- Which compliance board approved the product?
- What fees apply?
Frequently asked
Is an interest-free account always risk-free?
No. A current account is available but earns nothing; an investment account can gain or lose. No product avoids the trade-off between availability, safety and return.
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