Defence saving schemes interest

Mu' meneen Brothers and Sisters,

As Salaam Aleikum wa Rahmatullahi wa Barakatuh.  (May Allah's Peace, Mercy and Blessings be upon all of you)


One of our brothers/sisters has asked this question:

Could you please advise that Saving Schemes like" Defence Saving Certificate" Are Halal or Halam


(There may be some grammatical and spelling errors in the above statement. The forum does not change anything from questions, comments and statements received from our readers for circulation in confidentiality.)




Defence saving schemes interest

In the name of Allah, We praise Him, seek His help and ask for His forgiveness. Whoever Allah guides none can misguide, and whoever He allows to fall astray, none can guide them aright. We bear witness that there is no one (no idol, no person,  no grave, no prophet,  no imam,  no dai,  nobody!) worthy of worship but Allah Alone, and we bear witness that Muhammad(saws) is His slave-servant and the seal of His Messengers.


We are not absolutely sure what exactly are the ‘Defense Saving Schemes’, and would appreciate an elaboration on the scheme, how and where it invests the savings, and what are the returns of this scheme.  Only then could we possibly give you a satisfactory answer in light of the Quran and Sunnah.


Saving schemes in its essence are not considered haraam in Islam; the thing that is clearly declared haraam by Allah and His Messenger (saws) is if these savings are invested in ‘interest’ bearing schemes, which is then paid to the investors over and above their principal amount invested.  The increase of the ‘interest’ in the principal amount, would be deemed absolutely haraam for the believers.


Allah says in the Holy Quran Chapter 2 Surah Baqarah verse 274-276: But those who devour ‘riba’ become like the one whom Shaitaan has bewitched and maddened by his touch.   They have been condemned to this condition because they say,  Trade is just like ‘riba”,  whereas Allah has made trade halaal and ‘ribaharaam.   Henceforth,  if one abstains from taking ‘riba’ after receiving this admonition from his Lord,  no legal action shall be taken against him regarding the ‘riba’ he had devoured before:  his case shall ultimately go to Allah.   But if one repeats the same crime even after this,  he shall go to Hell,  where he shall abide for ever!   Allah deprives ‘riba’ of all blessing and develops charity,  and Allah does not like an ungrateful,  sinful person.


Allah says further in the Holy Quran Chapter 2 Surah Baqarah verse 278: O Believers!,  fear Allah and give up that ‘riba’ which is still due to you,  if you are true believers.   But if you do not do so,  then you are warned of the declaration of war against you by Allah and His Messenger!


Without going into the details of any savings scheme, the thumb rule to determine whether these schemes are ‘interest’ based or not is if they offer guaranteed returns on the principal amount invested.  If they do offer guaranteed returns, chances are the schemes are ‘interest’ based, and would not be legal or halaal for the believers.


Whatever written of Truth and benefit is only due to Allah’s Assistance and Guidance, and whatever of error is of me.  Allah Alone Knows Best and He is the Only Source of Strength.


Your Brother in Islam,





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