Home » Hanafi Fiqh » Muftisays.com » Is it permissible to open and share an investment account in a credit union?

Is it permissible to open and share an investment account in a credit union?

Answered as per Hanafi Fiqh by Muftisays.com
Bismillahir Rahmanir Rahim,
As salaam aliakum wa rahamtullahi wa barakatuh,

I would to know is it is permissble to open and share account? The share account is an investment in a credit uniion where you collect dividends on one share of ownership in the credit union.



Al-jawab billahi at-taufeeq (the answer with Allah’s guidance)

Credit union: A non-profit financial institution that is owned and operated entirely by its members. Credit unions provide financial services for their members, including savings and lending. (Investorwords)

How does it work? 1. Members save in a common fund 2. This fund provides low-interest loans to members 3. The interest generated from these loans is used to cover administrative costs 4. Any surplus is returned to members as a dividend.

Investing in a credit union will not be permissible. The reason is that it is based on interest dealings.

Alternatively, one may invest in credit unions based on Islamic principles, prior seeking consultation from their local scholar.

And Only Allah Ta’ala Knows Best.

Moulana Qamruz Zaman
London, UK

This answer was collected from MuftiSays.com, based in London (UK). It is one of the fruits of Darul Uloom London. Many ‘ulama are involved in answering the Q&A on the site, including: Shaikul Hadeeth Mufti Umar Farooq Sahib, Mufti Saifur Rahman Sahib, Mufti Abdullah Patel Sahib, Maulana Qamruz Zaman Sahib, Mufti Abu Bakr Karolia Sahib.

Read answers with similar topics: