Recommended Islamic Bank Current & Savings Account

navstar5

Hi,

I am currently in the market for the above account type for religious purposes.

I would be grateful if somebody can recommend a bank and share their experience.

TheTracker

navstar5 wrote: »

Hi,

I am currently in the market for the above account type for religious purposes.

I would be grateful if somebody can recommend a bank and share their experience.

I'm not Muslim but I use Al-Rayan for notice accounts and rate their services highly. Good rates, very good customer experience. I used the Islamic Bank of Britain (IBB) before Al Rayan took them over. I chose them purely on their rates and customer experience. I'm a happy customer of 2+ years.

MSE has a little section on Ethical Banking but they should really expand it to include Sharia accounts in this day and age, particularly as Al Rayan's 24 month rate beats the listed rate. Maybe MSE doesn't see it as ethical.

Paul_1977

Is it covered by the FSA?

colsten

Paul_1977 wrote: »

Is it covered by the FSA?

The Food Standards Agency has nothing to do with banks. You might be thinking of the FSCS - if so, according to their website, deposits with Al-Rayan are FSCS protected.

Paul_1977

No, Financial Services Authority, I am getting confused but not with food.

colsten

The Financial Services Authority ceased to exist over two years ago. It never did what the FSCS does.

10pence

FSA (Financial Services Authority) is now the FCA (Financial Conduct Authority).

Al Rayan are regulated by them: LINK

Paul_1977

Ok, now I am confused.

FSA = Financial Services Authority (closed)
FSCS = Financial Services Compensation Scheme
FCA = Financial Conduct Authority
PRA = Prudential Regulation Authority

The FSCS is funded by levies on firms authorised by the PRA and the FCA. The FSCS's costs are made up of management expenses and compensation payments

Think I understand now.

Anyway the bank is covered. Personally I would want to know more about this banks owner before it got my custom. Its based in Qatar, its big, but I can't find anything about who owns Masraf Al Rayan.

MAR is a Qatar-based Islamic bank providing banking, financial, investment and brokerage services through a network of 12 branches located across Qatar. The Bank was incorporated in January 2006 and is licensed by Qatar Central Bank. MAR is the second largest Islamic bank in Qatar by market value. Its structure consists of three main business divisions: Retail Banking, Wholesale Banking and Private Banking.

MAR is listed on the Qatar Exchange and its top 20 shareholders are blue chips in the Qatar investment, corporate and high net worth community.

Herbalus

TheTracker wrote: »

MSE has a little section on Ethical Banking but they should really expand it to include Sharia accounts in this day and age, particularly as Al Rayan's 24 month rate beats the listed rate. Maybe MSE doesn't see it as ethical.

I *believe* MSE don't include sharia/islamic products because those accounts don't pay interest, but rather pay a share of the profits which isn't fixed i.e. can change. MSE don't want to be seen recommending a product that offers an estimated x% of the profits as a return, as it could change (though I have no idea if this ever does in reality).

At least that was the view a few years ago.

TheTracker

Herbalus wrote: »

I *believe* MSE don't include sharia/islamic products because those accounts don't pay interest, but rather pay a share of the profits which isn't fixed i.e. can change. MSE don't want to be seen recommending a product that offers an estimated x% of the profits as a return, as it could change (though I have no idea if this ever does in reality).

At least that was the view a few years ago.

Reckon thats a good theory as to why, but it could be disclaimed in a few words. As a saver the way I see it is an interest-paying bank account provider reserves the right to change the rate for the next period, whereas in theory a profit-paying bank account provider reserves the right to change the rate for the current period, though in my personal experience thats never happened.

BTW at least with Al Rayan, they don't pay a fixed share of the variable profits but rather a share of the profits that equates to a fixed rate. I get exactly 1.8%pa paid monthly on my 120d notice account.

Chino

TheTracker wrote: »

MSE has a little section on Ethical Banking but they should really expand it to include Sharia accounts in this day and age, particularly as Al Rayan's 24 month rate beats the listed rate. Maybe MSE doesn't see it as ethical.

If a product is genuinely disbursing a share of its profits, it's an investment product and not a savings product and so shouldn't appear in any list of savings accounts.