Are bank current account reward schemes halal? The income is not considered as interest for tax purposes but what is the Islamic view? As you will be aware these are accounts that pay you a small amount of cash if you pay in a certain amount of cash each month, such as salary, pay out direct debits and use the debit card. Some charge a fee such as Halifax Rewards, whilst others are free such as Co Op Everyday Rewards.
Thanks for the advice.
Our view is that these schemes are best avoided.
This is because technically a bank account is an “on-demand deposit” where you are lending the bank whatever amount you put in your account (but you have right to get it paid back by the bank every time you withdraw money). That is why banks pay interest on your deposit - as you have loaned them that money and they need to pay you interest on that loan.
So under that characterisation of a modern bank account - it would not be permissible to receive back from the Bank anything more than what you put in. You cannot take the interest they pay and you cannot also take any other bonuses or incentives they give to induce you directly to deposit money with them. This is because it becomes akin to interest (as it is above and beyond what you deposit with them).
Another view is that bank accounts should not be seen in the technical light but more broad-brush as what most people understand it to be - just a place for safekeeping of money. Similar to a safe-box service. A safebox service can offer you incentives to use them of course and that’s fine.
But the difference here is that you pay a safe box a monthly amount for their service. You don’t usually pay the bank anything.
Now if you do pay the bank something to avail of its “service” of safekeeping and providing the pipework for your transactions (and don’t get paid any interest by the bank) - then I think an argument could be made that it is okay to accept bonuses from a bank.
But those situations are remote and uncommon.
So best avoided in our humble view.
Bismlillah,
I agree with Ibrahim’s view.
The reward schemes for most conventional bank accounts require you to have defined amounts as deposits to qualify for the rewards.
Considering that these on-demand deposits are loans to the banks from a Shariah perspective, gaining a conditional & additional benefit in lieu of such deposits will fall in the ambit of Riba.
Allah knows best