Are you searching for a Sharia Saving Account in the United Kingdom? You’ll find that this type of account is designed to offer the same day-to-day functions as a regular UK current account.
However, the major difference is the fact they don’t offer overdrafts and won’t give you a ‘return’ on your money. This means you won’t earn interest on your savings or investments because the principle of paying or charging interest is against Islamic law.
In addition, Islamic rules also forbid charging interest on loans, mortgages or treating money as a pure exchange. Equally being in-debt is not encouraged and money should only be borrowed when essential.
There’s lots of different providers in England, where you can sign up for a Sharia bank account.
Islam is the second largest religion in the United Kingdom, the UK Muslim population is around 2.7 million people. A Sharia bank account can be ideal for you if:
Who should get a UK Sharia Bank Account?
You would like to use a bank account according to Islamic law
You would like your savings to grow through Sharia profits, not interest
You do not want access to an overdraft facility
You don’t want your bank to loan your money to industries that offer goods or services such as alcohol, tobacco and gambling
Where to get a Sharia Bank Account in England?
There’s a few different options if you’re searching for a sharia-approved banking accounts, please click on one of the following links below:
How do Islamic Accounts and Banks Work?
Sharia approved banks and accounts use your money in ways that’s allowed by Islamic beliefs, normally the bank follows the ‘advice’ of a panel of Muslim bank advisers, this is to make certain any profit-generated is sharia-compliant.
For example, instead of charging interest and making money like a traditional UK bank, an Islamic bank typically uses contracts that are permitted under Sharia law. This includes leasing contracts, sale contracts and partnership contracts.
This means when a UK bank will ‘lend’ money for a mortgage and charge interest on the payments, an Islamic bank will usually purchase the house then allow the customer to buy the house from them, normally at an increased price.
How safe are Sharia Saving Accounts?
Generally, you should try and use a provider which is regulated by the Prudential Regulation Authority, this is protected by the Financial Services Compensation Scheme (FSCS). This means any cash you ‘put into’ a UK bank or building society is protected up to £85,000 under the Financial Services Compensation Scheme.
Should the bank or building society go ‘bust’, your money (up to the £85,000 limit) is protected per ‘authorised firm’. An authorised firm is generally a banking group, which may own other banking brands. As some banking brands are part of the same authorised firm, you may not be fully protected if you have money in different banks.
To find out which banks are part of which authorised firms on the Bank of England website .