Answered by Shaykh Omar Subedar
I would like to know what I am to do with interest money on a RESP. I heard you could use this money to buy things, such as toilet paper, toilets and the like, but want to confirm and obtain reliable guidance in the matter.
In terms of disposal, contemporary scholars have likened the interest money accumulated through such sources to a lost object that is picked up by someone (luqta). When the owner of the item cannot be located and no one comes forth to claim it then the person who has picked it up will donate it to the poor.
Abu Hurayrah رضى الله عنه reported, “Allāh’s Messenger صلى الله عليه وسلم was asked about [the ruling on] picking a lost item up. So he explained, “Such items are impermissible to use. Whoever picks up any such object, he must make people aware of it for an entire year. If its owner comes forth then he shall return it to him. If the owner does not come then he will donate it in charity.” [Sunan Al Dār Quṭnī: 4343]
Hence the interest money must be donated to the poor however without any hope of reward from Allāh.
And Allāh Knows Best
This answer was collected from Mathabah.org. It’s an Islamic educational institute based in Canada. The questions are generally answered by Sheikh Yusuf Badat and Sheikh Omar Subedar.