Answer
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:
Interest is not allowed in Islam. Hence, you can give it to the needy, the poor, or any Islamic charity.
In his response to your question, Prof. Dr. Monzer Kahf, Professor of Islamic Finance and Economics at Qatar Faculty of Islamic Studies, states:
The principle is: you should not use interest generating account unless the amount is relatively large and there are no Islamic banks nearby.
Earned interest, according to the Shari`ah, is not yours and you should take it from the bank (the interest practitioner) and give it, as soon as it is credited, to a poor Muslim family or to a trusted Islamic charity.
Almighty Allah knows best.
Editor’s note: This fatwa is from Ask the Scholar’s archive and was originally published at an earlier date.