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Is Lloyds TSB’s guaranteed return investment halaal or haraam?

Answered as per Hanafi Fiqh by Muftisays.com
ASA,
I am interested in opening an investment account with Lloyds TSB. They offer guaranteed return of at least 15% gross (2.83% AER) over 5 years. The returns are linked to the performance of shares in the FTSE 100 Index. The minimum investment is for 5 years. My query is that they can guarantee a no risk investment. Would this amount to interest or usary? Is this investement going to be halaal or haraam?

JK.

Answer
Bismillah

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

The investment account you mentioned above is called guaranteed investment account. This type of investment is Haram as it involves Riba (interest). Hence, to open any investment accounts with any conventional banks will not be permissible.

And Only Allah Ta’ala Knows Best.

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Moulana Qamruz Zaman
London, UK

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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.

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