Help! I need to invest £1000

a_female

I've been saving for ages and yet i've not got anywhere. As a muslim i can't earn interest. So i need to find a 'safe' way of putting the £10K i've saved so far into something that will boast it fast so i can buy a place. Help needed. I save about £700 each month and this has been going on forever. Yet I've only £12K to show for it. My mate saves £6K a year and in the same period she has £30K saved. I need to buy a place soon. Help :eek:

Ta

Aegis

Something like this any good for you?

http://www.islamic-bank.com/islamicbanklive/IAShariaaCompliant/1/Home/1/Home.jsp

lr1277

I don't know much about Islam so please don't be offended with the following:

Are you allowed to win money?

If so, would it be worth considering premium bonds. No interest as such, but if you are successful in the monthly draws, you can increase your holding.

Obviously nothing is guaranteed and you may win nothing or you could win the £1million.

BruceyBonus

Am I correct in saying that you can earn interest if you give it to charity? If so, I'd go for a bank's savings account.

Aegis

BruceyBonus wrote: »

Am I correct in saying that you can earn interest if you give it to charity? If so, I'd go for a bank's savings account.

I'm not sure that helps increase the capital though...?

loofer

Aegis wrote: »

Something like this any good for you?

http://www.islamic-bank.com/islamicbanklive/IAShariaaCompliant/1/Home/1/Home.jsp

Yup I would say the above.

I've just opened an account with them. They have a Direct Savings account with currently a target profit rate of 4%... so it's not far off from the market leading 6%+

Bare in mind there's very few banks about, but you've always got telephone/online banking.

a_female

Thanks for the input. Aegis. I'll def look at the saving account with the islamic bank. 4% is better than nothing.

lr1277 - Premium bonds are out i'm afraid! That was my first thought too. Nice idea, but as the winnings are made up from the interest from input of all the people in the bond. then it's still interest - but by a different name. Or something like that so don't quote me.

This is really hard.

a_female

Opps I just saw that I originally wrote £1K i meant £10K. Does that spark any new ideas?

Biggles

I think most banks have an Islamic account, I know Lloyds TSB does but that doesn't pay any interest http://www.lloydstsb.com/current_accounts/islamic_account.asp

(purely as a side note, I see from the FAQs:-

"Is the Islamic Financial Services only for Muslims?

"No. Islamic Financial Services are available to anyone who may wish to use interest-free banking"
Yeah, I bet they are!)

JayHabib

resurrecting the thread... hope this is still of some use to the OP...

whilst Islam does prohbit any involvement with interest, it doesn't prohibit investment (in fact it's actually encouraged), so you could look at something like a stocks and shares ISA, or put your money into a unit trust/OEIC. with the market so low right now, it could be the perfect time to do that. of course it comes with the risks inherent with investment - value of your investment can go up as well as down!

i would be careful putting any money with Islamic Bank of Britain. firstly, they have atrocious customer service and it's not hard to find media reports about customers who have closed their accounts because the service was so poor. in fact, i was one of those customers... direct debits not paid, cheques bouncing, salaries not arriving - and i had plenty of cash lodged with them, so you'd think they would be worried about losing me, but their staff are so apathetic they didnt even bother trying to keep me and just gave me a form to sign!

secondly, IBB have recently gone to the Middle East for a "bail out" by their main shareholder, the Qatar royal family. they are claiming that this is to help them with "expansion" plans, but the reality is that the company has essentially run out of money, having lost 80%+ of their start-up capital since they launched in 2004. AVOID!

if you still want to use them, then it would be naive to keep any more than £50k there. like all banks in the UK they are part of the FSA's compensation scheme, so should they go bust, you may not get all your money back!

Premium Bonds are controversial because some consider them a form of gambling, which is also forbidden for Muslims. however, as your capital is always guaranteed, others believe it is an acceptable investment. i'm not going to give a religious opinion on this either way, but would recommend you refer to an Islamic Finance expert.

HTH :A

and as for Biggles and his ignorant post-script comment... yes the Islamic banks are open to people of all faiths (or no faith). their principles are Islamic. their staff and customers do not have to be though (and the reality is that many of them are not Muslim). it's no different to a Catholic choosing to send their kids to a Church of England school.

LongTermLurker

JayHabib wrote: »

and as for Biggles and his ignorant post-script comment... yes the Islamic banks are open to people of all faiths (or no faith). their principles are Islamic. their staff and customers do not have to be though (and the reality is that many of them are not Muslim). it's no different to a Catholic choosing to send their kids to a Church of England school.

To be fair, I think Biggles' comment wasn't to do with faith, but regarding the idea of "anyone can opt for an interest-free account". Of course, it suggests he may not realise you still get an increase on your capital with Islamic accounts, it's just that the increase doesn't constitute "interest".

I think he was also specifically talking about the LTSB account, so maybe that doesn't give you any return at all, just a "safe" place to store your money.

Incidentally, the poll isn't answerable - an ISA is a wrapper, either for savings or stocks & shares, but because the OP doesn't give any indication of risk tolerance, tax status, age or a million and one other things, it siimply cannot be answered. What she does say is that she's desparate for the money to grow quickly, meaning she doesn't want a long-term strategy, and she has a goal (buying a house) that means her capital must be protected - therefore, the stock market is entirely out of the question.