I have a daughter and I want to enroll into education savings plan. It is optional, I contribute a said amount of money in a fund until my daughter is eighteen, then we withdraw the money. The whole time the fund accrues bearing interest. Is it legal?

I have a daughter and I want to enroll into education savings plan. It is optional, I contribute a said amount of money in a fund until my daughter is eighteen, then we withdraw the money. The whole time the fund accrues bearing interest. Is it legal?

Answer

(Fatwa: 548/527/N=1434)

Interest based dealing is unlawful and haram in Islam. The hadith warns against it severely. Hence it is not lawful to take education saving plan and it is necessary for Muslims to avoid it.

Allah (Subhana Wa Ta’ala) knows Best

Darul Ifta,
Darul Uloom Deoband