Question # 7: I’m opening an account in a bank and will receiving interest @ 4% p.a. Should I keep that one and donate the amount received as interest every year to some poor families or should I ask them not to give me interest or should I close and open one with no interest. I might even keep more and feel it’s better to take the interest and give to our brethren needy families then to let bank keep it. But wanted to ask because it’s not about what I feel good it’s what is more correct. Please advise.
bismi-llahi r-raḥmani r-raḥīm,
Assalamu ‘laikum warahmatullahi wabarakatuh,
All praise and thanks are due to Allah (سبحانه و تعالى), and peace and blessings be upon His Messenger (صلى الله عليه و سلم).
First of all, we implore Allah (سبحانه و تعالى) to help us serve His cause and render our work for His sake.
Shorter Answer: Putting money in the bank for interest is emphatically forbidden, and is a major sin. Consequently, it is not permissible to put money in a riba-based bank except if there is the fear that the money may be stolen etc. If there is no other means of protecting the money except by putting it in the bank, then in that case it is enough to put it in a current account that does not bear any interest, because in cases of necessity, things that are ordinarily forbidden may be permitted, but only to the extent that is necessary. Also Refer Question # 112 & Question # 224
Long Answer: Putting money in the bank for interest is emphatically forbidden, and is a major sin. Allah says: “O you who believe! Be afraid of Allah and give up what remains (due to you) from Riba (from now onward) if you are (really) believers. And if you do not do it, then take a notice of war from Allah and His Messenger but if you repent, you shall have your capital sums. Deal not unjustly (by asking more than your capital sums), and you shall not be dealt with unjustly (by receiving less than your capital sums)” (Soorah al-Baqarah, 2:278-279)
Consequently, it is not permissible to put money in a riba-based bank except if there is the fear that the money may be stolen etc. If there is no other means of protecting the money except by putting it in the bank, then in that case it is enough to put it in a current account that does not bear any interest, because in cases of necessity, things that are ordinarily forbidden may be permitted, but only to the extent that is necessary. This is line with the Qa’idah (legal maxim) that states that “Yakhtaaru ahwanu al sharraini” (The lesser of two evils is to be chosen).
Few ahadith to ponder in this regard:
- Muslim narrated that Jaabir (رضي الله عنه) said: The Messenger of Allah (صلى الله عليه و سلم) cursed the one who consumes riba and the one who pays it, the one who writes it down and the two who witness it, and he said: they are all the same.
- The Prophet (صلى الله عليه و سلم) said: “A dirham of riba that a man consumes knowingly is worse before Allah than committing zina thirty-six times.” Narrated by Ahmad and al-Tabaraani; classed as saheeh by al-Albaani in Saheeh al-Jaami’.
- Allah has forbidden riba in many verses of the Qur’an, the last of which to be revealed, according to a saheeh report narrated from Ibn ‘Abbas (رضي الله عنه), is the passage in which Allah (سبحانه و تعالى) says: “275. Those who consume Riba will not stand (on the Day of Resurrection) except like the standing of a person beaten by Shaytaan leading him to insanity. That is because they say: ‘Trading is only like Riba,’ whereas Allah has permitted trading and forbidden Riba. So, whosoever receives an admonition from his Lord and stops consuming Riba, shall not be punished for the past; his case is for Allah (to judge); but whoever returns (to Riba), such are the dwellers of the Fire — they will abide therein. 276. Allah will destroy Riba and will give increase for Sadaqat (deeds of charity, alms). And Allah likes not the disbelievers, sinners.” (Soorah al-Baqarah 2:275-276)
- It is also forbidden in the hadith which was narrated by al-Bukhari, Muslim and others from Abu Sa’eed al-Khudri (رضي الله عنه) who said: The Messenger of Allah (صلى الله عليه و سلم) said: “Gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, salt for salt, like for like, hand to hand, and whoever gives more or asks for more has engaged in riba; the taker and the giver are both the same.”
All the scholars are unanimous in their opinion that riba includes all additions to the money borrowed or deposited on the basis of a precondition and this is haraam in Islam.
Allahu A’lam (Allah (سبحانه و تعالى) knows best) and all Perfections belong to Allah, and all mistakes belong to me alone. May Allah (سبحانه و تعالى) forgive me, Ameen.