'Expected profit' on Sharia savings accounts

whelkmice

Looking at a 1 year fixed-rate Sharia account (Al Rayan via Prosper, 4.56%) for a large lump sum deposit & just wanted to hear any Forumites experiences with Sharia 'expected profit'.

Anyone had less profit at maturity than that advertised when account was opened? Or is it likely/possible to get more than the advertised rate?

If there's an FAQ I've missed on Sharia accounts, please post a link.

Any good or bad experiences or advice welcome - thanks.

masonic

It's possible, but very rare, to get more or less. The rate can be changed without notice, but you can pull your money immediately without penalty if they reduce it. So all that is guaranteed is the accrued profit.

I am happy to use these accounts when the rates are attractive enough.

eskbanker

whelkmice said:

Looking at a 1 year fixed-rate Sharia account (Al Rayan via Prosper, 4.56%) for a large lump sum deposit & just wanted to hear any Forumites experiences with Sharia 'expected profit'.

Anyone had less profit at maturity than that advertised when account was opened? Or is it likely/possible to get more than the advertised rate?

If there's an FAQ I've missed on Sharia accounts, please post a link.

Any good or bad experiences or advice welcome - thanks.

Al Rayan failed to pay out its expected rate on some of its accounts, albeit way back in 2008, when trading as IBB:

https://web.archive.org/web/20201111234815/https://www.alrayanbank.co.uk/media/37102/actualsavingsprofitratesjanuary2008.pdf

whelkmice

masonic said:

It's possible, but very rare, to get more or less. The rate can be changed without notice, but you can pull your money immediately without penalty if they reduce it. So all that is guaranteed is the accrued profit.

I am happy to use these accounts when the rates are attractive enough.

Thanks for the information.
I thought the rate was attractive given the BoE is pretty certain to lower the base rate on Thursday - any thoughts?

masonic

whelkmice said:

masonic said:

It's possible, but very rare, to get more or less. The rate can be changed without notice, but you can pull your money immediately without penalty if they reduce it. So all that is guaranteed is the accrued profit.

I am happy to use these accounts when the rates are attractive enough.

Thanks for the information.
I thought the rate was attractive given the BoE is pretty certain to lower the base rate on Thursday - any thoughts?

It is currently topping the rate tables, and yes, following the Fed's rate cut decision I'd be very surprised if the MPC don't do likewise. If I had money I wanted to fix for a year, then I'd go for this if still available (I note Al Rayan have already pulled it to offer 4.40% now if you go direct).

mills112

i have had many of these accounts over the years and they have always paid out as expected from my experience.

you have the option of taking your money out immediately if they drop their rates, without penalty so you won't be tied in if they fail to deliver.

allegro120

mills112 said:

i have had many of these accounts over the years and they have always paid out as expected from my experience.

you have the option of taking your money out immediately if they drop their rates, without penalty so you won't be tied in if they fail to deliver.

Same here.  I used Al Rayan and Gatehouse on and off for a while and never had any problems with them.  Always paid out as expected.

Ayr_Rage

I have deposited with Al Rayan many times.

They have never failed to pay the expected profit.

I am pretty sure that there is a paragraph in their Ts and Cs that says that if an investment makes more than expected they do not have to pay it out.

I've never been paid more than the published rate.

jaybeetoo

I have used Al Rayan for several years. They’ve always paid the expected profit.

artyboy

A cynic might almost think it was some sort of fiddle to make ostensibly interest bearing accounts acceptable to a wider customer base...

Bigwheels1111

I have accounts with Al Rayan, Gatehouse and ISIS.

All have paid out the advertised rate for the last 3 years.

I would not even think twice before investing in another Sharia account.

I have a good chunk of money with them.

Only limited by the old FSCS limit on each account.