Depositing an amount in the bank for the children's educational expenses
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Fatwa number ( 10576 )
Q: If the Danish government encourages parents to deposit, for example, three thousand dollars in interest-based banks while their children are studying in primary schools, and when the children reach eighteen years of age, the government returns twelve thousand dollars to them for educational expenses and so on, knowing that none of this is compulsory, but Muslims deposit this amount in banks to build their children's future, as they claim: 1- Is this permissible or not? 2- Is it permissible for us to refuse the interest from the bank and be content with the principal only, leaving the interest to the interest-based banks? 3- Is it permissible for Muslims to take the entire amount, including their principals, and spend the interest on the poor and the needy? Explain, may you be rewarded.
A: First: It is not permissible for the guardian of the student to deposit the aforementioned amount or similar amounts in the bank in order to receive more than that after a period of time, whether that is for education or otherwise; because it contains usury of excess and usury of deferment. And the fact that they make the deposit non-compulsory provides the opportunity for the guardian of the student not to deposit in this manner.
for education or otherwise; due to the riba al-fadl (usury of excess in a like-for-like exchange) and riba al-nasi'ah (usury of deferment) involved in it, and because they made the deposit non-compulsory, which provides the opportunity for the student's guardian not to deposit in this manner. Second: If this does occur, the student's guardian must withdraw the deposited amount and its interest; to rid himself of continuing in an interest-based contract, then he should keep the principal and spend the excess on acts of righteousness and kindness.
Q: If the Danish government encourages parents to deposit, for example, three thousand dollars in interest-based banks while their children are studying in primary schools, and when the children reach eighteen years of age, the government returns twelve thousand dollars to them for educational expenses and so on, knowing that none of this is compulsory, but Muslims deposit this amount in banks to build their children's future, as they claim: 1- Is this permissible or not? 2- Is it permissible for us to refuse the interest from the bank and be content with the principal only, leaving the interest to the interest-based banks? 3- Is it permissible for Muslims to take the entire amount, including their principals, and spend the interest on the poor and the needy? Explain, may you be rewarded.
A: First: It is not permissible for the guardian of the student to deposit the aforementioned amount or similar amounts in the bank in order to receive more than that after a period of time, whether that is for education or otherwise; because it contains usury of excess and usury of deferment. And the fact that they make the deposit non-compulsory provides the opportunity for the guardian of the student not to deposit in this manner.
for education or otherwise; due to the riba al-fadl (usury of excess in a like-for-like exchange) and riba al-nasi'ah (usury of deferment) involved in it, and because they made the deposit non-compulsory, which provides the opportunity for the student's guardian not to deposit in this manner. Second: If this does occur, the student's guardian must withdraw the deposited amount and its interest; to rid himself of continuing in an interest-based contract, then he should keep the principal and spend the excess on acts of righteousness and kindness.
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.