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Additional Savings Account That Attracts Interest

Answered as per Hanafi Fiqh by Darulifta Azaadville


I have a ______ bank account. The account, like other banks, incurrs interest every month. _____, has of recently introduced what they call “live savings account”. This is an additional account linked to a person’s existing account. The purpose is basically for two reasons. 

1)It allows one to save “change” in this way, that every time a person swipes his card for an odd figure(R197. 56) example…, the bank will debit(round off) R200. The actual R197. 56 will go to the shop for that purchase and the change will go into that “live savings account”. This helps one to save money. 

2)The monthly interest will no more be retained in the mainstream account. It will automatically be transferred to this “live savings account” every month.  

We have a choice of activating both of the above or not or one. Can we activate the interest part. That will actually help us get rid of the interest more efficiently because it is visibily seen on the app of the phone all the time. Where as, otherwise, it is there, but hidden in between all the other transactions. Here, it is clear. Also, the bank itself automatically transfers the interest into this “separate” account. This makes it easy to ‘transfer’ the interest to a valid shar’ee recipient thereafter. 


However, the doubtful part is that, in this “live savings account”, the interest multiplies. Hence, ordinarily, if the interest was in the mainstream account, it would be example R20. Now, when this R20 is transferred to the “live savings account”, then that R20 is going to generate more interest on top of it. If the change goes in there, the interest will be even more. The question is, is it advisable or permissible to use this facility, not for the change(to save money), but rather, as a good clear and convenient way of removing interest from one’s account. 


In the queried scenario, it will not be advisable to activate the “life savings account” even though the interest funds are clearly visible there. The interest funds can be withdrawn from the main account on a monthly basis and disposed of to the correct recipients as soon the account is credited with interest. Also, the interest funds credited to one’s account is clearly indicated on one’s bank statement and can be easily removed without any confusion.   

By activating the “life savings account” one will gradually become inclined towards transferring additional funds or change into the account so that it may attract interest. This is obviously not permissible. Our intention for placing funds into a bank account is for safe keeping and this objective is being fulfilled with the original account that is held with the bank, hence there remains no need for an additional account. We therefore do not approve of having this second account.        

Checked and Approved By:

Mufti Muhammed Saeed Motara Saheb D.B.

This answer was collected from the official Ifta website of Darul Uloom Azaadville, South Africa. Most of the answers are checked and approved by Mufti Muhammed Saeed Motara Saheb D.B.

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