Yes. Your eligible deposits with Al Rayan Bank are protected by the Financial Services Compensation Scheme, the UK's deposit guarantee scheme, up to a total of £85,000. Most deposits are covered by the scheme.

Any deposits you hold above the FSCS compensation limit are unlikely to be covered, unless under specific circumstances, as determined by the FSCS.

Find out more about FSCS

Islamic banks pay profit to their savers rather than interest. This is because interest is strictly forbidden in Islam, as Muslims believe that it promotes unfairness in financial transactions, which leads to social inequality and injustice.

Therefore, instead of paying a guaranteed interest rate to their savers, Islamic Banks, such as Al Rayan Bank, invest customers’ deposits in ethical, Sharia compliant trading activities in order to generate a profit.

Investments are monitored on a daily basis by Al Rayan Bank to ensure that they will provide the expected profit rate which was quoted to the customer. This approach has proved extremely accurate; since Al Rayan Bank was founded in 2004, it has always paid the rate of profit it has quoted to its customers, and on numerous occasions, when investments have performed better than expected, it has even paid more.

Find out more about expected profit

Al Rayan Bank has developed the Home Purchase Plan as a Sharia compliant alternative to a mortgage. The main difference between a HPP and a conventional mortgage is that the lending/borrowing relationship does not exist. For this reason, interest does not form part of the arrangement.

As a Sharia compliant product, Al Rayan Bank’s HPPs are based on joint ownership and lease agreements arranged using two separate principles of Islamic finance:

With a HPP, of say 20 years, Al Rayan Bank and the customer buy the property jointly. The customer then has 20 years to buy the Bank’s share for the same initial purchase price. This is based on the Diminishing Musharaka (diminishing partnership) principle of Islamic finance.

At the time of completing the joint purchase, the customer will live in the property even though a large share of it is owned by the Bank. Therefore, until the customer becomes the full owner, they will lease the portion of the property still owned by Al Rayan Bank and pay a monthly rental to the Bank. This is based on the Islamic financing principle of Ijara (leasing).

When all acquisition payments have been made and the finance has been settled, ownership of the property transfers fully to the customer and they now own their home outright, without having paid any interest.

Al Rayan Bank is a UK bank with more than 90,000 customers throughout the country.  

The Bank is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Our firm reference number is 229148.

Al Rayan Bank is incorporated and registered in England and Wales with Registration No. 4483430. Registered Office: 44 Hans Crescent, Knightsbridge, London, SW1X 0LZ.

The parent company, and majority shareholder, of Al Rayan Bank PLC is Al Rayan (UK) Limited, the UK subsidiary of Masraf Al Rayan (MAR) Q.S.C.

Find out more about the Bank