Is it Permissible to Accept an Interest-Based Grant?

09 March, 2019

Q As-salamu `alaykum. Two years ago, I was a student in Britain. I used to receive my academic grant through a bank account which gave basic interest on the funds available in the account. At the time, I did not separate the interest money from my personal money because I didn’t know exactly how much it was and exactly how I should actually separate it from my own money, especially that it wasn’t a fixed amount of money. Since then, I have used up almost all my money apart from a little which remains in my bank account. My questions are: 1- Is it permissible to take out the interest out of money now? If so, how should I do this? Could I merely estimate the amount of interest which entered my money and then take it out in my local currency? 2- With regard to the money still available in my bank account (approximately $1,000), and which I have been saving for the past two years in order to pay the entry fees to an examination in the UK; should I pay Zakah for this money every year lunar year (hawl)?

Answer

Wa `alaykum as-salamu wa rahmatullahi wa barakatuh.

In the Name of Allah, Most Gracious, Most Merciful.

All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.

In this fatwa:

You can resort to the bank to know the real amount of interest that interfered in your grant. If you fail, you can estimate the amount and get rid of it to make sure that your income is interest-free.

In response to the question you raised, the European Council for Fatwa and Research (ECFR) issued the following fatwa:

As for the manner in which you should deal with the interest money; you should first try to find out the exact amount of this money from your bank.

If this attempt comes to no avail, then you are allowed to estimate its amount so that you try your utmost to make sure that none of it remains in your possession.

After doing so, you should give out this money to the poor and the needy and not make any personal use of it.

As for paying zakah for your savings, the amount of money which becomes liable for zakah should amount in value to 85 grams of pure gold, the value of which can be found in the newspapers and financial markets.

Therefore, if your savings are equal or exceed that amount, then you should pay zakah every year.

However, it appears from your question that your savings are not liable for zakah as they are savings for an actual basic need and requirement.

Allah Almighty knows best.

Editor’s note: This fatwa is from Ask the Scholar’s archive and was originally published at an earlier date.