Sharia compliant, tax free savings
Saad is a 42 year old doctor from London who recently moved to a more senior, research-based, role at a university hospital in Manchester. Saad is a very busy man; in addition to his research work, it is not uncommon for him to work 10 to 12 hour days in the hospital, often for seven days in a row.
Saad is a practising Muslim and uses a mixture of conventional and Islamic finance. His mortgage and current account are with a conventional high street lender, but in recent years, he has tried to move more aspects of his day-to-day finance to banks which provide a Sharia compliant option. He currently has two fixed-term savings accounts, one with Al Rayan Bank, formerly Islamic Bank of Britain (IBB) and another with a Sharia compliant bank based in London.
His salary is significantly above the national average, and with so little free time to spend his money, Saad is actively looking for Sharia compliant investment opportunities. He has considered investing in property, but doesn’t really have the time to take on the responsibilities of being a landlord. He’s therefore very pleased when he learns that Al Rayan Bank has launched the UK’s first Sharia compliant Cash ISA.
Saad already knows that ISAs allow you to earn a tax free income on your savings. He also knows that there is a limit to how much you can pay into an ISA in each financial year. When he checks Al Rayan Bank’s website, he learns that this limit is currently £15,000 and he can invest up to the full amount in either a cash ISA or a stocks and shares ISA.
Al Rayan Bank’s account is a Notice Cash ISA, which means that Saad has to provide notice to get access to his money, in this case 120 days. He is happy with all of the features and benefits of the ISA and calls Al Rayan Bank on the free phone number listed on the website. He speaks to a very helpful lady at Al Rayan Bank’s, UK based, contact centre. She confirms all the details that Saad had read on the website and sets the account up for him within 15 minutes.
Saad invests £10,000 into his Notice Cash ISA, although he could have set it up with an initial investment from as little £250. If he wishes, he can pay a further £5,000 into the same cash ISA or a a separate stocks and shares ISA in this current financial year. The lady from the contact centre explains that Al Rayan Bank also accredits a product called the Discretionary Portfolio Service (DPS). If he wants to, she can put him in touch with an Independent Financial Advisor (IFA) who will assess his investment needs and recommend a suitable fund that can be held within his stocks and shares ISA allowance. Saad’s keen to pursue this Sharia compliant investment opportunity and so the lady arranges for one of Al Rayan Bank’s IFA partners to contact him.
Saad is very happy to have opened his Notice Cash ISA; he’s satisfied with the tax-free expected rate of return and is looking forward to discussing further opportunities with the Independent Financial Advisor. Most of all, Saad is pleased that everything he has arranged is in line with the principles of his faith.
|Saad is a fictional character, but his situation is one that is shared by many of Al Rayan Bank’s customers. Al Rayan Bank now offers the UK’s only Sharia compliant Cash ISA, which means that customers can invest their money and make a tax free return without compromising the principles of their faith.|