Fatwa ID: 07584
Answered by Alimah Shireen Mangera-Badat
Question
I got to know about an app in which if I deposited 2600 bucks then the app will give me 100 bucks in return on a daily basis. Is that money haram, does that money come under riba according to Islam?
In the name of Allah, the Most Gracious, the Most Merciful
Answer
In addressing your question regarding whether the money earned through an app that promises a daily return on a fixed deposit falls under riba (interest) and is considered haram in Islam.
- Understanding Riba (Interest) in Islam
Riba refers to any guaranteed increase on a loan or deposit without a corresponding service or trade. The Qur’an explicitly prohibits riba, and the prohibition is severe in all schools of thought, including the Hanafi school. Any transaction where money generates money without any legitimate trade or service is considered riba, and it is haram (forbidden).
- Fixed Return on Investment (Without Risk or Trade)
If the app guarantees you a fixed return (e.g., 100 bucks daily) on your deposited amount (2600 bucks) without engaging in any actual business, trade, or service, this falls directly under riba. In Islamic finance, a return on investment must be tied to risk-sharing in a business or trade. If you are guaranteed a return without any risk, this is considered interest, which is haram. In this case, if you are depositing money and receiving a fixed return without any trade or business activity, it constitutes riba.
- Investment in Islam
In Islam, for an investment to be halal, the money must be used in legitimate business ventures where there is both potential for profit and risk of loss. This is known as Mudarabah (profit-sharing) or Musharakah (partnership). Any arrangement that promises a fixed return without engaging in a legitimate business or bearing the risk of loss is impermissible.
- Conclusion
- The money you receive from the app, if it guarantees a fixed return (100 bucks daily) on your deposit (2600 bucks) without any trade or business activity, falls under riba and is haram according to Hanafi Fiqh.
- In Islam, investments must involve real business or services where the investor bears both profit and loss risks. Guaranteed returns on deposits are not permissible.
Thus, it is advisable to avoid such transactions to ensure that your earnings are halal and free from riba.
Only Allah knows best.
Written by Alimah Shireen Mangera-Badat
Checked and approved by Mufti Mohammed Tosir Miah
Darul Ifta Birmingham
“كل قرض جر نفعا فهو ربا”
(Al-Hidaya, Vol. 3, Pg. 160)
Iqtisaadi Islaami, page 13- footnotes
“ولا يجوز للمسلم أن يستربح على مال إلا في تجارة مشروعة أو عمل منتج”
(Fath al-Qadir, Vol. 6, Pg. 65)
