Can I Open a Bank Account That Pays the Least Interest?
Hanafi Fiqh
Answered by Mawlana Ilyas Patel
Question
I have a transaction account with NAB, and they allow me to set a savings goal without opening a savings account. But, with the transaction account, the bank gives you a 0.01% p.a. interest rate; is this riba even if you didn’t ask for it? Because the other accounts all have higher interest rates, I thought that since the transaction account is an everyday account and I only use the money I deposit without taking out any loans, it would be fine.
Today I discovered that the transaction account pays interest. Is it riba?
The first bank I used in Australia takes a debit excess interest rate, is that also considered riba?
Answer
In the Name of Allah, the Most Merciful and Compassionate.
I pray you are well.
One should only open up a bank account that does not give and offer interest. If there is none, one can open an account with the least offering interest, like in your case. You can just give the accrued interest to charity without expecting any reward.
In principle, as we have many Islamic banks now, some scholars encourage the use of the services of certified Islamic banks. If not available, some conventional banks have Islamic window accounts, and one should opt for this if it is sharia compliant. If Islamic windows are unavailable, a person may open a current account at a conventional bank that does not offer interest. If no accounts are non-interest-based, one can open up the account that offers the least interest and donate the interest to charity without expecting any reward.
The summary is one should open a non-interest-based account in a conventional bank. If this is not available, then a bank account that offers the least interest. However, it is also encouraged to use the services of Islamic banks to assist the growth of Islamic Finance. [Usmani, Fiqh al-Buyu]
Related:
Is It Halal to Keep My Money in a Riba-Based Bank
How to Get Rid of Interest Money Accumulated on an Account?
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I pray this helps with your question.
Wassalam,
[Mawlana] Ilyas Patel
Checked and Approved by Shaykh Faraz Rabbani
Mawlana Ilyas Patel is a traditionally-trained scholar who has studied in the UK, India, Pakistan, Syria, Jordan, and Turkey. He started his early education in the UK. He went on to complete the hifz of the Quran in India, then enrolled in an Islamic seminary in the UK, where he studied the secular and ‘Aalimiyya sciences. He then traveled to Karachi, Pakistan. He has been an Imam in Rep of Ireland for several years. He has taught hifz of the Quran, Tajwid, Fiqh, and many other Islamic sciences to children and adults onsite and online extensively in the UK and Ireland. He taught at a local Islamic seminary for 12 years in the UK, where he was a librarian and a teacher of Islamic sciences. He currently resides in the UK with his wife. His interest is a love of books and gardening.
