Is an Online Deferred Gold Purchase Savings Plan Permissible in Islam?
Hanafi Fiqh
Answered by Mawlana Ilyas Patel
Question
If I have a contract with a Muslim company where I send a monthly sum of money, and they buy gold in the customer’s name (or, if available, provide the customer with the gold from their stock) and add it to their savings plan, would this contract be problematic due to the hadith of the Prophet (Allah bless him and give him peace) forbidding deferred exchanges between gold?
Some ‘Ulama consider gold and silver’s effective cause to be their use as currency, which they extend to modern currency. This means money and gold should be exchanged hand-to-hand. Is it permissible for someone in that savings plan to continue this contract?
Answer
In the Name of Allah, the Most Merciful and Compassionate.
I pray you are in good faith and health. Thank you for your question.
Respected Muftis and jurists hold that purchasing gold online is permissible. Card payments create an immediate accounting entry in the bank account, indicating that payment has been made. The delay of a few hours or a day for the transfer to complete does not affect Sacred Law compliance.
Likewise, transferring money to a digital wallet and buying gold with those funds is considered permissible. If the seller also immediately registers and allocates the gold to the buyer’s name, then the transaction is allowed.
Exchanging Gold and Silver with Fiat Currency
According to several scholars from India and Pakistan, the exchange of gold and silver with fiat paper currencies would not be considered an exchange of gold/silver (bay‘ al-sarf). The sale would still be considered valid if possession of the item is transferred from one party only. [Taqi ‘Usmani, Fatawa ‘Uthmani]
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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 has received traditional education in various countries. He started his schooling in the UK and completed his hifz of the Quran in India. After that, he joined an Islamic seminary in the UK, where he studied secular and Aalimiyya sciences. Later, he traveled to Karachi, Pakistan, and other Middle Eastern countries to further his education. Mawlana has served as an Imam in the Republic of Ireland for several years and taught the Quran and other Islamic sciences to both children and adults. He also worked as a teacher and librarian at a local Islamic seminary in the UK for 12 years. Presently, he lives in the UK with his wife and is interested in books and gardening.
