Is investing through Systematic Investment Plan(SIP) permissible? Systematic Investment Plan(SIP)- is a type of mutual fund where every month a fixed amount is deposited for a period. For example: 5,000 is deposited every month for 15 years it results in 9,00,000.00 at the end of 15 years bank assures 25,22,880.00 at rate of 12% return which is again subjected to market risk (it can increase or decrease). Please guide in this matter.
بسم الله الرحمن الرحيم
(Fatwa: 449/365/D=6/1438)
If the rate of interest is decreased or increased due to some risk or without it, then also it does not make the interest based dealing lawful.
Whatsoever amount the bank gives you as interest after you deposit five thousand rupees each month it shall be interest and this will be considered interest based dealing. Thus it is haram to earn benefit in this way.
Allah knows Best!
Darul Ifta,
Darul Uloom Deoband