Question:
Is it permissible to invest in CD’s (Certificate of Deposits)?
Answer:
In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.
A Certificate of Deposit is a savings certificate at various denominations issued primarily by commercial banks where the holder receives interest at a specified rate upon maturity.
Unlike savings accounts, a CD has a maturity date, after which you can withdraw your funds in full with an additional interest. If you choose to withdraw before that date, you’ll have to pay an early-withdrawal fee.
Investing in Certificates of Deposits is impermissible as it is an interest bearing investment.
And Allah Ta’āla Knows Best
Mufti Faraz Adam,
www.darulfiqh.com
