Sharia Banking Experience

allegro120

DarcySarto said:

Morning All
MSE highlights that AlRyan bank has a good 1 year fixed savings rate. Does anybody have any experience of this bank and/or sharia banking in general - either positive or negative?

Yes, I opened my first account with Al Rayan in Sept 2019.  Very positive experience, communication and customer services are good.  I also had 2 fixed term accounts with Gatehouse, don't have anything negative to report. 

The only downside with Sharia accounts is that whilst your capital is FSCS protested, your profit is not.  

masonic

allegro120 said:
The only downside with Sharia accounts is that whilst your capital is FSCS protested, your profit is not.  

That's not quite true, accrued profit is covered. I went into a bit more detail in a post in a previous thread here: https://forums.moneysavingexpert.com/discussion/comment/79495374/#Comment_79495374

Malchester

Have no time for Al Rayan but that's nothing to do with Sharia just banking incompetence. Have found Gatehouse Bank to be excellent for everything but again not to do with being Sharia just good service 

lr1277

Sorry slightly off topic. So I am asking out of curiosity.

Yesterday for the 1st time I looked at an Islamic/Sharia savings account. I noticed they make quite clear they don't pay interest but pay profit instead.

Does this affect how you fill in your self-assessment tax return? Is the money from this style of account classed as interest, dividend or something else?

And however it is declared, does this affect the relevant personal allowances for tax purposes?

eskbanker

lr1277 said:

Sorry slightly off topic. So I am asking out of curiosity.

Yesterday for the 1st time I looked at an Islamic/Sharia savings account. I noticed they make quite clear they don't pay interest but pay profit instead.

Does this affect how you fill in your self-assessment tax return? Is the money from this style of account classed as interest, dividend or something else?

And however it is declared, does this affect the relevant personal allowances for tax purposes?

As usually said on here when this comes up, Allah may not regard it as interest but HMRC do:

https://www.gov.uk/hmrc-internal-manuals/savings-and-investment-manual/saim2250

https://www.legislation.gov.uk/ukpga/2007/3/part/10A

lr1277

Thanks @eskbanker

ToastLady

Can you only make one payment to Al Rayan for a fixed account? It implies that in their t's and c's. 
Also how long does a payment take to show up in your account?

Band7

ToastLady said:

Can you only make one payment to Al Rayan for a fixed account? It implies that in their t's and c's. 
Also how long does a payment take to show up in your account?

I have made more than one, though all on the same day

ToastLady

Just for info, opened 1 yr and 2 yr fixed savers with Al Rayan over weekend. Funded one on Saturday, money didn't show until this morning. Funded 2nd one this morning and it went through very quickly and showing in account.

allegro120

ToastLady said:

Just for info, opened 1 yr and 2 yr fixed savers with Al Rayan over weekend. Funded one on Saturday, money didn't show until this morning. Funded 2nd one this morning and it went through very quickly and showing in account.

Al Rayan don't process payments over weekends (incl. Friday evenings).