Help! I need to invest £1000

Biggles

JayHabib wrote: »

and as for Biggles and his ignorant post-script comment...

I was merely referring to the fact that I was quite sure the bank (any bank) would be only too happy for people to 'use interest-free banking'.

amcluesent

IIRC it's advantageous to use an islamic bank to provide a pension. If you give a high-street bank the annuity to provide income and die the next day, they keep the lot. If you use an islamic bank then some of the annuity comes back to the estate of the deceased.

LongTermLurker

amcluesent wrote: »

IIRC it's advantageous to use an islamic bank to provide a pension. If you give a high-street bank the annuity to provide income and die the next day, they keep the lot. If you use an islamic bank then some of the annuity comes back to the estate of the deceased.

That's an interesting thing to look into when the time comes round.

a7man

Your main options are investments in commodities and funds that are sharia compliant, there are a few available. There is now an Islamic Banking qualification available so you could see a financial planner than specialises in this area. It depends on your risk level but suitable funds and investments are available. There are also some deposit accounts that do not provide interest but provide a tiny cut from profits of the bank.

JayHabib

Biggles wrote: »

I was merely referring to the fact that I was quite sure the bank (any bank) would be only too happy for people to 'use interest-free banking'.

Ah right. I see. Apologies. I misunderstood what you were saying. You're right, of course. Any bank would love to have customers who refuse interest or a return on their investment.

Re: the Islamic Banking qualifications, in the UK there are only really 3 worth mentioning:

IIBI Diploma - more for product managers and marketing/operations staff.
Securities Institute IFQ - again it's more for people who want to work in the industry.
CIMA CertIF - more for accountants and those wanting to work in Finance departments.

sadly, there is no Islamic banking equivalent of CeMAP of CeFA, so finding an expert to tell you where/how to invest is very difficult, as most of those selling the products have a vested interest in selling their employers products.

that probably means you'll have to do your own research and find the product that's right for you.

loofer

JayHabib wrote: »

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!

Hi, anychance you could provides some links to support the above. Ican't seem to find anything.
I've got a fair bit tied up with them and it's one of them investment bonds untill end of April so can't withdraw immediately. I would be looking to follow IBBs trouble strories very closely.

JayHabib

Hi loofer.

As IBB is a public limited company, any such information is always available via the London Stock Exchange website. For this specific matter see the following link:

http://www.londonstockexchange.com/LSECWS/IFSPages/MarketNewsPopup.aspx?id=2031184&source=RNS

They claim it's all about "opportunities" and "taking advantage of market conditions" is quite frankly complete bull.* If you analyse the company's accounts you will see that they started with about £50 million, but have managed to lose about £40 million of that in the past 4 years. This essentially suggests they have a very flawed business plan. So it's hardly surprising that their share price has plunged from a high of 90p+ to a recent low of less than 5p a share. "Risky" is one way of describing any investment in that company. Having experienced their attempt at customer service, i think "suicidal" would be more accurate.



*For those who can't quite fathom where the details of why this company is so bad can be found, the link above will lead you to the following bits of non-plain English mumbo jumbo:

• Regulatory capital. The Board is conscious of its responsibilities to ensure that IBB has sufficient regulatory capital to manage and grow the business. The Board closely monitors the Company's capital position to ensure compliance with the FSA's capital requirements through the Internal Capital Adequacy Assessment Process (ICAAP). New capital is required to support the future growth in customer assets, including the new House Purchase Plan ("HPP") product, and ensure that an appropriate buffer is maintained over the minimum regulatory requirement.

• Funding. New capital is required to initially fund new long term customer assets, until longer term customer deposits are established. This is intended to help ensure that IBB continues to achieve its liquidity and funding requirements.

"Regulatory Capital" is essentially about the minimum amount of money a bank must have so that it can meet the demands of customers if they want to withdraw their savings. The fact they mention this clearly points to the IBB not having enough money to cope if customers all start asking for their deposits back. And the "Regulatory" part suggests the FSA has expressed concerns too.

"Liquidity and funding requirements" is all about them not having enough long-term savers, making them susceptible to a bank run a la Northern Rock, leading to a collapse.


If you want to keep your money there then feel free. In all good conscience, i just couldnt recommend them to anyone though. If you really MUST have Islamic bank accounts then feel free to speak to either HSBC (Amanah) and Lloyds TSB (although LTSB have been accused of being unfair to Muslim customers so you may want to avoid them).

gregz0012

Using shares as a short-term savings vehicle is a sure way to get your fingers burnt. When you find the right property you don't want to be trying to time the market to sell the shares or waiting to recoup losses from short-term fluctuations.

The only option is a Sharia bank account which pays a good return, maybe consider a 30-Day or 90-Day notice account if you can find one. However investing this tax efficiently using your ISA would only account for £3,600 which is 5 months worth of contributions. Unless using your ISA would put you in a significantly better tax position I wouldn't recommend using it for such a short term goal, you are better using you ISA as a retirement pot alongside your pensions.