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Opening Interest Bearing Account to Reduce Cost of Buying Stock

Answered according to Hanafi Fiqh by Albalagh.net

Opening Interest Bearing Account to Reduce Cost of Buying Stock

By Mufti Taqi Usmani


Q.) When trading through the Australian Stock Exchange, each transaction attracts a fee of A$34 (I may buy and sell 3 to 4 times a week, so each cycle of buying and selling costs A$64 so over the year, it will be quite a sum of money). If however, I open a preffered trader bank account, then that fee falls to A$16. The problem is that this bank account will pay me interest. I do not want the interest. All I want is to reduce the costs associated with trading on the share market. Please tell me what I should do. Should I open the account, and donate the interest at the end of the year, or leave the interest in the account, or not open the account at all. Please advise me what is permissible, and what is preffered. [Abdullah]

A.) In the situation mentioned by you in your question, you can open an account with the intention that the amount of interest, if any, shall be donated to a charity. It is not permissible for you to use that amount for your own benefit in any way. But in the particular circumstances you have referred to in your letter you may be forgiven by Allah Subhanahu Taala for opening interest bearing account.

This answer was collected from Albalagh.net, which is an Islamic site with Q&A and articles authored by many world renowned scholars from the Muslim world. Many of Mufti Taqi Uthmani’s fatawa in English are found exclusively on this site.

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