IslamQA

Interest and Insurance

Answered according to Hanafi Fiqh by Askimam.org

 i am living in India and here we have to pay lot of Taxes to Govt. we cant escape from that, my question is that i have an RD (Reoccuring Deposit) account in a Govt. bank,  every month i deposit 10000 Rs from my Saving to that account and after 2 years Bank will pay me all my saved Money and interest on that, my question is that can i use intrest money which bank gave me on my savings if not than why we are going for Insurance in India as Insurance is also wrong as per Islam, if we do not go for Insurance than we cant save a money as Insurance save Taxes in India and if we pay full taxes than 30% of salary will go to Govt. in form of Tax, In India most of the Muslims are in Dillema related to Govt Bank Intrests, also when we open RD account bank we sign a paper in which bank mentions that bank has right to reduce inerest rate anytime, so this eliminates the possibilty of 100% profit as per my knowledge Interest money is haraam in which there is no loss all 100% profit

Please answer these Questions

Jazakallaha khair

Mehboob Anwar

India

Answer

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

 

Interest as well as insurance, both are prohibited. We do not understand your explanation on insurance and saving money.

However, if you deposited money in a government bank and you earned interest on that amount, the interest should be disposed of by giving it to the poor and needy. There is a leeway for you to pay bank charges to the same bank and government taxes with the interest earned.

And Allah Ta’āla Knows Best

 

Mufti Ebrahim Desai.

 

 

This answer was collected from Askimam.org, which is operated under the supervision of Mufti Ebrahim Desai from South Africa.

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