I know this is an age old topic, and as far as I have heard on multiple occasions, scholars have said to avoid interest and give it away if you otherwise couldn’t avoid it. Furthermore, you get no reward for giving interest, you simply avoid the sin of consuming it.
I have also heard that if a bank is giving you interest, you should take it and give it away rather than leaving it with the bank.
Is there any scholarly opinion that it is acceptable or better to take the highest yield interest account with the intention to give away the interest?
If the rate given by the bank is less than the federal interest rate, are banks turning around and lending it back to the Fed to get that interest rate?
Am I actually avoiding my money being lent out at interest if I keep my money in a checking account vs a high interest savings account? If not, then it doesn’t make sense. I’m currently getting fraction of a percent interest at a major US bank and give that away (pocket change in any case).
Hoping someone else has researched this better than me and can provide pointers/links that answers the above.
Waalaikumussalam, my brother in Islam, Allah SWT has very clearly prohibit taking and giving of interest in addition Rasool Allah SA’s several ahadith have clearly forbidden interest dealings. This is also declared war against Allah and his Rasool. This idea of taking interest and giving to poor to help them is one of the tool of Iblees to deceive a believer into involving in war with Allah, and we all know that no one can win against Allah. Allah SWT punished Hazrat Adam for going and eating from a tree and he along with Hazrat Hawa were removed from Jannat and send to this world. Similarly in our time in this dunya interest is a tree and Allah has commanded us not go near it and consume its fruits as much as it is humanly possible, but if you won’t obey the punishment is from dunia to Jahannam. May Allah bless us with understanding and protect us.
Wa alaikum asalam brother, I’m very aware of the aya and is why I don’t take the matter carelessly.
There was one fatwa I read that you shouldn’t seek to get interest to give to the poor the same way as one shouldn’t steal to give to the poor. I thought that was an interesting analogy with some validity. If I was directly lending to someone else at interest then it makes sense.
In this case, it seems the corresponding analogy would be I gave the robber (bank) a weapon (my deposits) to use to steal money from someone else (interest). If that is true, and I follow the thinking of some Muslims, I am not responsible for what the bank does. As long as it hands me back the same amount of money, I am supposedly fine. That thinking doesn’t sit well with me…
I think the right answer here is maybe I shouldn’t give my money to the bank beyond necessity. If there is a trick of Shaytan it may be in making us think we have no other choice when there maybe a better one (e.g. invest more, keep less cash and learn to be more tolerant of the resulting risk). But if put in a situation dealing with harm or haram, we should seek the less bad option.
To put it in a general analogy: If a thief stole from someone you couldn’t identify, should you intervene to give some of what he stole to an unrelated needy person? Or should you stay out of it?
I reviewed what is out there from modern scholars and imams and thought about it some more. I realized the better thing would be to reduce what I have in the conventional bank so there is less potential harm to be involved in. JAK br. Arif for the reminder.
I hope some day we would have an independent Islamic bank in the US that is FDIC insured yet avoids sharia arbitrage and any other shenanigans that tie into conventional interest based lending. There was one bank I investigated but I was not comfortable with it as I’d mentioned in another post.