Question: Which Junior ISAs are Shariah compliant?
The Fatwa
In the Name of Allah, the Most Gracious, the Most Merciful
The Answer
A Junior ISA (Individual Savings Account) is a special type of savings account designed for children in the UK. It’s a way for parents, guardians, or family members to save money for a child’s future in a tax-efficient manner. There are two types of Junior ISAs.
- Cash Junior ISAs
- Stocks and Shares Junior ISAs.
Conventional Cash Junior ISAs are not Shariah compliant. Cash ISAs are held in interest-bearing accounts, and as such, accrue Riba.
In regard to Stocks and Shares Junior ISAs, the underlying investments must be screened for Shariah compliance. In order to benefit from a Stocks and Shares ISA, one must ensure that the financial institution that is offering the ISA has a reputable Shariah board and has proper Shariah governance in place to oversee the ISA. If this is the case, then one may invest in a Shariah-compliant Junior ISA.
And Almighty Allah Alone Knows Best
Maulana Inaamul Hasan Chothia
Trainee Mufti
Reviewed and approved by
Mufti Faraz Adam
Darul Iftaa Muadh ibn Jabal
www.darulfiqh.com
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