• Home
  • About
    • About Us
    • Testimonials
    • The Team
  • Q&A
    • Worship
      • Purification
      • Salah
      • Zakat
      • Fasting
      • Hajj
      • Qurbani/Udhiyyah
      • Death & Burial
    • Commerce, Finance & Investment
      • Trade & Business
      • Jobs & Services
      • Investments
      • Schemes & Products
      • Islamic Finance & Banking
    • Nikah & Divorce
      • Nikah
      • Divorce
    • Social Issues
    • Medical Issues
    • Wills & Inheritance
    • Advice
  • Research & Essays
  • Articles
  • Contact Us
  • Nisab

chat
Darul Fiqh Darul Fiqh
Darul Fiqh Darul Fiqh
  • Home
  • About
    • About Us
    • Testimonials
    • The Team
  • Q&A
    • Worship
      • Purification
      • Salah
      • Zakat
      • Fasting
      • Hajj
      • Qurbani/Udhiyyah
      • Death & Burial
    • Commerce, Finance & Investment
      • Trade & Business
      • Jobs & Services
      • Investments
      • Schemes & Products
      • Islamic Finance & Banking
    • Nikah & Divorce
      • Nikah
      • Divorce
    • Social Issues
    • Medical Issues
    • Wills & Inheritance
    • Advice
  • Research & Essays
  • Articles
  • Contact Us
  • Nisab

Question:

What is the Islamic perspective on Premium Bonds?

Answer:

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

In the UK, a premium bond is defined as a nonmarketable government security issued by National Savings & Investments at £1 each.  Periodical interest is not paid; instead the investment is entered into a draw every month to win prizes from £25 to £1 million.  The bonds are repayable upon demand.[1]

In simpler terms, a premium bond is a type of bond that you can buy as part of a UK government system in which you have the chance to win money each month for as long as you do not sell the bond.[2]

When analysing this transaction Islamically, effectively, the premium bond holder is advancing a loan to the bond issuers.  The bond holder/lender is entitled to a surplus once the stipulated condition in the contract matures.
As a principle, a loan with a conditional increase above the principal amount is interest.[3]  Therefore, it is impermissible to invest in Premium Bonds.

And Allah Ta’ālā Knows Best

Mufti Faraz
www.darulfiqh.com


[1] http://www.qfinance.com/dictionary/premium-bond
[2]  http://dictionary.cambridge.org/dictionary/business-english/premium-bond

[3]  كُلُّ قَرْضٍ يُشْتَرَطُ فِيهِ مَنْفَعَةٌ فَهُوَ حَرَامٌ هَذَا إذَا كَانَتْ الْمَنْفَعَةُ مَشْرُوطَةً فِي الْعَقْدِ فَإِنْ لَمْ تَكُنْ مَشْرُوطَةً فَدَفَعَ أَجْوَدَ فَلَا بَأْسَ (درر الحكام في شرح مجلة الأحكام ج 3 ص 94 دار الجيل)

Total
0
Shares
Share 0
Tweet 0
Previous Article
  • Q&A

Is Smoking Shisha permissible?

  • August 2, 2021
Read More
Next Article
  • Commerce, Finance & Investments
  • Jobs & Services
  • Q&A

Can I work as a security guard for an insurance company? Will my wages be halal?

  • August 2, 2021
Read More
You May Also Find
Read More
  • Commerce, Finance & Investments
  • Q&A

What is the ruling of trading memorabilia coins with a mark up to their face values?

Read More
  • Commerce, Finance & Investments
  • Q&A

Is Invoice Discounting Acceptable?

Read More
  • Commerce, Finance & Investments
  • Q&A
  • Schemes & products

Is my Orange phone contract Shari’ah Compliant?

Read More
  • Commerce, Finance & Investments
  • Investments
  • Q&A

To what extent can a rabbul maal interfere in the affairs of the mudharib?

Read More
  • Commerce, Finance & Investments
  • Q&A
  • Trade & Business
  • Uncategorized

Is possession necessary at the time of the transaction?

Read More
  • Commerce, Finance & Investments
  • Q&A
  • Schemes & products

Are the following interest bearing transactions?

Read More
  • Commerce, Finance & Investments
  • Investments
  • Q&A

Is it permissible to invest in CD’s (Certificate of Deposits)?

Read More
  • Commerce, Finance & Investments
  • Islamic Finance & Banking
  • Q&A

What makes a contract Shari’ah compliant?

Subscribe to our Newsletter
Recent Posts
  • Consuming a sauce with crustacean-based ingredients
    • March 14, 2023
  • How many Sadja Tilawa have to be performed if one listens to multiple Sajda verses from different students?
    • March 12, 2023
  • How to fill a gap in the row in front of you
    • March 7, 2023
  • Is the Jus-Roll Puff Pastry Halal?
    • February 27, 2023
  • Does a Pension Investment Form Part of the Sharia Estate of the Deceased?
    • February 27, 2023

Darul Fiqh is a Fatwa website providing Islamic answers to everyday Fiqh issues and questions.

Powered by

Subscribe to Our Newsletter
Follow Us

Input your search keywords and press Enter.