Answered by: Maulana Sibghat Ullah
Question
Are Child Trust Funds allowed?
Overview
A Child Trust Fund (CTF) is long-term tax-free savings account for children.
These were opened on behalf of my children by the government when they were born my children are nearly 18 years old and asking about these. What can they do with the money if they receive this?
In the name of Allah, the Most Gracious, the Most Merciful
Answer:
If the trust fund set by the government has an interest, then to take that extra amount, i.e. the interest will be unlawful.
Your children can take and spend the actual amount, which was deposited by the government, as that will be lawful. Anything extra, however, will be of interest, thus unlawful.
The excess amount should be given to the poor without the intention of any reward [i].
Only Allah knows best.
Written by Maulana Sibghat Ullah
Checked and approved by Mufti Mohammed Tosir Miah
Darul Ifta Birmingham
[i] Fatawa Usmania, Book 7, Page 289, Al Asr Academy.