Islamic banks in UK

rebecca1

How is it that these banks are able to offer the top rate ISA rates (2.2%) and every other financial institution rates in the UK are so low?


I looked at the Santander 123 account instead of the ISA accounts but that is a lot of faffing around with 2 direct debits and a minimum £500 going into account...etc - these financial institutions love creating hurdles for us to jump over for minimal return !


Rebecca

jimjames

rebecca1 wrote: »

How is it that these banks are able to offer the top rate ISA rates (2.2%) and every other financial institution rates in the UK are so low?


I looked at the Santander 123 account instead of the ISA accounts but that is a lot of faffing around with 2 direct debits and a minimum £500 going into account...etc - these financial institutions love creating hurdles for us to jump over for minimal return !


Rebecca

It's hardly any effort to setup and once done then zero. I'd much rather have that and get a decent return and no different really from having to move your cash ISA every year to chase best rate.

MARTYM8`

Islamic banks don't pay interest as they operate under sharia rules.

So they merely provide an expected profit rate on any assets acquired with the cash - so its only an expected rate not guaranteed. But at least its backed by something real.

masonic

MARTYM8` wrote: »

So they merely provide an expected profit rate on any assets acquired with the cash - so its only an expected rate not guaranteed. But at least its backed by something real.

Backed by something real? What it that?

darren72

masonic wrote: »

Backed by something real? What it that?

Financial Services Compensation Scheme (FSCS) ?

masonic

darren72 wrote: »

Financial Services Compensation Scheme (FSCS) ?

I don't think the estimated "share of the profits in the business" would be covered, unlike traditional interest, which if owed at the time of default would be honoured and paid by the FSCS.