Al Rayaan Fixed Term Deposit Account

Everyday Islamic Finance Personal and Family Finance
#1

Asalam Alaikum,

Can someone explain to me how Al Rayaan is almost guaranteeing a fixed rate in their fixed term deposit accounts?

It feels almost as if it is like a interest rate. They even say that if the returns are lower than the fixed rate specified, they will give an option to close the account.

Can anyone comment on how this is shariah-compliant and how it works in general (how are they able to almost guarantee a fixed-rate which is so surprisingly close to the Bank of England interest rate)??

#2

Assalaamu alaykum,

The profit is not “fixed”, the term of investment is fixed.

From their website:

Can Al Rayan Bank change the expected profit rate?

The expected profit rate is agreed at the outset. If for any reason we are not able to achieve the expected (target) profit rate, we will give you the option to close your account. If you choose to close your account, we will return your funds, along with the profit accrued on your deposit up until the date of termination.