Sukuk investment certificates are comparable to bonds, but they aren’t dependent on debt, hence they’re halal. Interest payments on debt due are seen as usury, exploitative of the debtor, and are thus prohibited under Islamic teachings (haram). As a result, conventional bonds and other debt products that earn interest revenue are prohibited under Islamic rules. Sukuk investments are halal since they aim to profit from the underlying assets’ investment income rather than interest and principal payments. Sukuk may look to be similar to bonds on the surface: They have maturities, can be evaluated by major credit rating agencies like S&P or Moody’s, and earn regular investment income payments, comparable to the coupon payments from traditional bonds. So, what distinguishes halal sukuk investments? They must meet the CORE Criteria listed below.
Are bonds kosher?
Islamic bonds are asset-based and are commonly referred to as Islamic bonds. Because they are part of the ‘fixed income’ market, they are considered cautious investments. Sukuks are a type of Islamic bond that can create income for halal investors without violating Sharia law.
Why are bonds considered halal?
Halal investing entails making investments in firms that follow Islamic investing guidelines. Many traditional investment products are non-compliant. Profiting from debt, for example, is forbidden, thus observant Muslims cannot invest in bonds or GICs. Halal investing also prevents firms from profiting from certain activities, such as alcohol, cigarettes, gambling, pork, and weapons.
Is it forbidden to invest in cryptocurrency?
The national council of Islamic experts in Indonesia has declared cryptocurrency trading, such as Bitcoin, to be prohibited for Muslims, as the popularity of digital currencies surges in the world’s largest Muslim-majority country.
Use a shariah-compliant robo advisor or investing platform
Joining an Islamic robo-advisor or online investing platform is one of the simplest methods to invest in halal assets.
These platforms are regulated to guarantee that only shariah-compliant stocks and businesses are available to customers.
Wahed, a global Islamic investing robo-adviser with over 150,000 clients, is one such popular platform. You can choose an investing portfolio based on your risk appetite, fill your account, and watch your money grow using the Wahed app.
Is it permissible to finance a car in Islam?
- Riba (Interest) – Receiving or paying interest is forbidden in Islam. It is considered haram. In terms of vehicle finance, this means that Muslims who desire to follow Sharia law cannot borrow money with an annual percentage rate (APR). An annual percentage rate (APR) is a type of interest rate that is forbidden in Islam.
- Contract Simplicity: Islamic Sharia principles mandate that all dealings be honest, transparent, and open. This means that if you’re leasing an automobile, you should make sure there’s no unnecessary risk, speculation, or gambling involved. The contract should be equitable to both parties and easy to understand.