Money Advice Service

Sharia-compliant accounts provide the same day-to-day banking services as mainstream current accounts. However, they don’t give you a return on your money or offer overdraft facilities as the principle of paying or charging interest is against Islamic law. Any money invested will be kept separate from other bank accounts – it won’t be used to generate interest or be invested in prohibited businesses.

When might a Sharia-compliant account be for you?

A Sharia-compliant bank account is for you if:

  • You want to bank according to Islamic law.
  • You want your savings to grow through Sharia-compliant profits, not through interest.
  • You don’t want your bank to lend your money to businesses that provide goods or services – such as alcohol, tobacco and gambling – that are against Islamic principles.

How Sharia compliant savings work

With a Sharia-compliant savings account, instead of lending out your savings and charging interest then passing some of this on to you, the bank uses your money in a way that’s consistent with Islamic beliefs.

Your bank will follow the advice of a panel of Muslim bank advisers to make sure that profit-generating activities are Sharia-compliant.

Some of the profit the bank earns from these activities is returned to you, allowing you to grow your savings without earning interest.

Where to get a Sharia-compliant savings account

These banks offer Sharia-compliant accounts to customers in the UK:

  • Lloyds. This account is no longer available.
  • BLME.

Al Rayan Bank and UBL offer a more extensive range of Sharia-compliant accounts, including savings accounts.

Help us keep this list up to date – if you provide Sharia-compliant savings products to retail UK customers, please contact Money Advice Service.

How secure are Sharia-compliant accounts?

Cash you put into UK banks or building societies (that are authorised by the Prudential Regulation Authority) is protected by the Financial Services Compensation Scheme (FSCS).

The FSCS savings protection limit is £85,000 (or £170,000 for joint accounts) per authorised firm.

It is worth noting that some banking brands are part of the same authorised firm.

If you have more than the limit within the same bank, or authorised firm, it’s a good idea to move the excess to make sure your money is protected.

Follows the links below for more information:

If things go wrong

If you’re unhappy with the service you get from your bank or you want to make a complaint, read Sort out a money problem or make a complaint.

This article is provided by the Money Advice Service.