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  • FIRST POST
    • Sally57
    • By Sally57 8th Apr 19, 1:49 PM
    • 141Posts
    • 41Thanks
    Sally57
    BLME Sharia 1Yr Fixed Rate 2.2%
    • #1
    • 8th Apr 19, 1:49 PM
    BLME Sharia 1Yr Fixed Rate 2.2% 8th Apr 19 at 1:49 PM
    I am thinking about opening a 1 year fixed rate Sharia account with BLME at 2.2%. As anybody else used BLME or Sharia accounts before? Any views would be really appreciated.
Page 1
    • Aidanmc
    • By Aidanmc 8th Apr 19, 2:20 PM
    • 197 Posts
    • 68 Thanks
    Aidanmc
    • #2
    • 8th Apr 19, 2:20 PM
    • #2
    • 8th Apr 19, 2:20 PM
    Hi Sally,
    I have just opened that account, very straightforward process. Opened the account online and 2 days later they sent account number to which deposit funds.No early withdrawal permitted.
    I've had positive experience with Sharia account with Al Rayan bank also. Profit figures have always been accurate.
    • manninman
    • By manninman 9th Apr 19, 12:35 PM
    • 10 Posts
    • 2 Thanks
    manninman
    • #3
    • 9th Apr 19, 12:35 PM
    • #3
    • 9th Apr 19, 12:35 PM
    Sally …
    I have twice in recent years invested with BLME and the whole experience was excellent. I would have no hesitation in recommending the bank [I have no other connection with the bank].
    There are some points to bear in mind with BLME and all sharia-based finance houses. Firstly, you are not earning interest (which is contrary to the sharia); rather, you earn profit by, in effect, investing in a project in partnership with the bank. In principle, the ‘profit’ is not strictly predictable, so theoretically cannot be guaranteed. In practice, if things go badly, the bank will advise you that the return on your investment is going to be less than expected and will allow you to withdraw your funds without penalty. However, you will almost certainly receive the return that you were promised up to that point.
    In addition, because your return is not ‘interest’, it will not be rolled over by the bank in the same way that interest can be compounded from year to year. Presumably, for this reason, the investment is not available as an ISA, although I wonder whether there might not be a case for arguing that a sharia investment should be available in a S & S ISA.
    • masonic
    • By masonic 9th Apr 19, 4:58 PM
    • 12,369 Posts
    • 9,959 Thanks
    masonic
    • #4
    • 9th Apr 19, 4:58 PM
    • #4
    • 9th Apr 19, 4:58 PM
    I hold a few of these accounts now. Have had no issues with BLME, bear in mind there is no online access.

    In practice, if things go badly, the bank will advise you that the return on your investment is going to be less than expected and will allow you to withdraw your funds without penalty. However, you will almost certainly receive the return that you were promised up to that point.
    Originally posted by manninman
    Not just almost certainly. All accrued 'expected profit' is guaranteed and backed up by FSCS protection. The only way BLME could renege on accrued interest profit is to go into administration, in which case all capital and accrued interest profit would be paid out by the FSCS. The worst case scenario is a rate change mid-term, with the option to withdraw without penalty.

    In addition, because your return is not ‘interest’, it will not be rolled over by the bank in the same way that interest can be compounded from year to year. Presumably, for this reason, the investment is not available as an ISA, although I wonder whether there might not be a case for arguing that a sharia investment should be available in a S & S ISA.
    BLME pays interest profit annually to an external account, while other Sharia compliant banks are happy to compound interest profit and pay it out at maturity. Other Sharia compliant banks do have ISAs available. Compounding and ISA availability appear to be a provider choice, rather than a Sharia restriction.
    • Notsop
    • By Notsop 9th Apr 19, 6:31 PM
    • 9 Posts
    • 5 Thanks
    Notsop
    • #5
    • 9th Apr 19, 6:31 PM
    • #5
    • 9th Apr 19, 6:31 PM
    If its not interest you would think it would not count towards your yearly £1000 HMRC tax free interest allowance, but instead towards your CGT allowance.

    But I guess not.
    • masonic
    • By masonic 9th Apr 19, 6:50 PM
    • 12,369 Posts
    • 9,959 Thanks
    masonic
    • #6
    • 9th Apr 19, 6:50 PM
    • #6
    • 9th Apr 19, 6:50 PM
    If its not interest you would think it would not count towards your yearly £1000 HMRC tax free interest allowance, but instead towards your CGT allowance.

    But I guess not.
    Originally posted by Notsop
    It's closer to a dividend than a capital gain, but HMRC is perfectly capable of determining which category of income it belongs to, and it's the same one as bank interest and P2P lending income.
    • Sally57
    • By Sally57 10th Apr 19, 1:35 PM
    • 141 Posts
    • 41 Thanks
    Sally57
    • #7
    • 10th Apr 19, 1:35 PM
    • #7
    • 10th Apr 19, 1:35 PM
    BLME pays interest profit annually to an external account, while other Sharia compliant banks are happy to compound interest profit and pay it out at maturity. Other Sharia compliant banks do have ISAs available. Compounding and ISA availability appear to be a provider choice, rather than a Sharia restriction.
    Originally posted by masonic
    So just to clarify/confirm, as a non earner if I invested £30K into BLME for a year and the 'profit' was £660 then although this is not exactly classified as 'interest' it should still be included in my £1000 tax free savings allowance?
    • poppy10
    • By poppy10 10th Apr 19, 2:33 PM
    • 6,216 Posts
    • 7,545 Thanks
    poppy10
    • #8
    • 10th Apr 19, 2:33 PM
    • #8
    • 10th Apr 19, 2:33 PM
    So just to clarify/confirm, as a non earner if I invested £30K into BLME for a year and the 'profit' was £660 then although this is not exactly classified as 'interest' it should still be included in my £1000 tax free savings allowance?
    Originally posted by Sally57
    Yes. Allah won't class it as interest but HMRC will
    • eskbanker
    • By eskbanker 10th Apr 19, 4:24 PM
    • 11,434 Posts
    • 14,195 Thanks
    eskbanker
    • #9
    • 10th Apr 19, 4:24 PM
    • #9
    • 10th Apr 19, 4:24 PM
    So just to clarify/confirm, as a non earner if I invested £30K into BLME for a year and the 'profit' was £660 then although this is not exactly classified as 'interest' it should still be included in my £1000 tax free savings allowance?
    Originally posted by Sally57
    If you're a non-earner then the income may fall within either your £12.5K personal allowance or the £5K starting savings rate rather than the £1K personal savings allowance as such....

    https://www.moneysavingexpert.com/banking/tax-rates/
    • matty_art
    • By matty_art 13th Jun 19, 5:38 AM
    • 168 Posts
    • 42 Thanks
    matty_art
    I’ve just applied for this account with BLME - what I didn’t realise at the time is that there is no online access.

    I’ve just had a letter through the post with bank details to pay my deposit into - however professional experience of dealing with paying suppliers means I don’t feel overly comfortable just paying in based on a letter with no ability to confirm accuracy of these bank details online - I’m sure it’s fine but I’m an accountant and heard scare stories so not really best practice from BLME!

    I presume everyone else received a letter with the bank details too?
    • Aidanmc
    • By Aidanmc 13th Jun 19, 8:04 AM
    • 197 Posts
    • 68 Thanks
    Aidanmc
    Yes this is how its done, they will probably send an email also with the details. You could also phone them to double check if you wish. After you transfer the funds and in the account you will receive confirmation. Quite straightforward really.

    Iíve just applied for this account with BLME - what I didnít realise at the time is that there is no online access.

    Iíve just had a letter through the post with bank details to pay my deposit into - however professional experience of dealing with paying suppliers means I donít feel overly comfortable just paying in based on a letter with no ability to confirm accuracy of these bank details online - Iím sure itís fine but Iím an accountant and heard scare stories so not really best practice from BLME!

    I presume everyone else received a letter with the bank details too?
    Originally posted by matty_art
    • masonic
    • By masonic 14th Jun 19, 7:22 PM
    • 12,369 Posts
    • 9,959 Thanks
    masonic
    I’ve just applied for this account with BLME - what I didn’t realise at the time is that there is no online access.

    I’ve just had a letter through the post with bank details to pay my deposit into - however professional experience of dealing with paying suppliers means I don’t feel overly comfortable just paying in based on a letter with no ability to confirm accuracy of these bank details online - I’m sure it’s fine but I’m an accountant and heard scare stories so not really best practice from BLME!

    I presume everyone else received a letter with the bank details too?
    Originally posted by matty_art
    It appears the account is a holding account in your name, from which the money is transferred into the fixed term product. You'll receive quarterly statements showing activity on this account. If you open more fixed term accounts you'll be asked to transfer into the same holding account, so it's just the first transfer that's a bit of a leap of faith.

    They don't send these details by email, but would probably confirm them if you wanted to double check (obviously phoning them is the way to go here, not email). They do confirm receipt of your deposit by email, usually the next morning.
    • canarybaby
    • By canarybaby 15th Jun 19, 9:29 AM
    • 2 Posts
    • 0 Thanks
    canarybaby
    In the letter I received from BLME it states I can make a payment from an account in my own name. Does this have to be my linked account or can it be any account in my name?
    • masonic
    • By masonic 15th Jun 19, 11:09 AM
    • 12,369 Posts
    • 9,959 Thanks
    masonic
    In the letter I received from BLME it states I can make a payment from an account in my own name. Does this have to be my linked account or can it be any account in my name?
    Originally posted by canarybaby
    My understanding is that the linked account is used at maturity and it doesn't need to be the same as the funding account, though I've always used the same account for both.
    • zilla6
    • By zilla6 17th Jun 19, 3:14 PM
    • 33 Posts
    • 7 Thanks
    zilla6
    Easy to deal with
    I've used BLME for several years now and have never had a problem. I've always had the expected returns. And they send maturity reminders with enough time to deal with them.
    • MiserlyMartin
    • By MiserlyMartin 18th Jun 19, 10:41 PM
    • 1,918 Posts
    • 1,372 Thanks
    MiserlyMartin
    This sharia compliant stuff is all rubbish really. It's interest really under a different name. How did we get to this stage in our country?
    • eskbanker
    • By eskbanker 18th Jun 19, 11:11 PM
    • 11,434 Posts
    • 14,195 Thanks
    eskbanker
    This sharia compliant stuff is all rubbish really. It's interest really under a different name. How did we get to this stage in our country?
    Originally posted by MiserlyMartin
    Don't see a problem with it myself, it's not massively dissimilar in principle to the plenty of folk on here bending the rules a bit by (mis)using current accounts as savings accounts. If you don't want to use these accounts, nobody's forcing you....

    Or does the reference to 'in our country' and the slightly why-oh-why tone of your last sentence signify some sort of reactionary Daily Mail agenda behind your concern?
    • masonic
    • By masonic 19th Jun 19, 5:46 AM
    • 12,369 Posts
    • 9,959 Thanks
    masonic
    Personally, I'm glad these accounts are available to us. Without them I'd have to resort to accounts paying less interest.
    • Zanderman
    • By Zanderman 19th Jun 19, 7:38 AM
    • 2,392 Posts
    • 5,288 Thanks
    Zanderman
    This sharia compliant stuff is all rubbish really. It's interest really under a different name. How did we get to this stage in our country?
    Originally posted by MiserlyMartin
    What is this 'stage' to which you refer?

    Of course it's interest under a different name!

    But that doesn't mean that sharia compliant stuff is 'rubbish' - it's a banking system compliant with a particular belief. That's all.

    You can use the bank whether you share the belief or not.

    If you do share the belief it's an important aspect. If you don't it doesn't matter. At all.

    If you think it does matter, to you (though I cannot see why it should), then don't use a sharia-compliant bank. Simples. There are many other banks out there, the vast vast vast majority not being sharia-compliant. So you have plenty of choice.
    • gingercordial
    • By gingercordial 19th Jun 19, 12:47 PM
    • 1,385 Posts
    • 1,564 Thanks
    gingercordial
    This sharia compliant stuff is all rubbish really. It's interest really under a different name. How did we get to this stage in our country?
    Originally posted by MiserlyMartin
    And why are you only complaining about it now? I was involved in setting up Sharia-compliant investment funds back in 2003 as a trainee accountant, and it wasn't new even then. Whatever "stage" we are at in "our" country (which is also the country of plenty of people who believe in different religions) we've been there for a long time as far as Sharia investment goes. The world hasn't ended in the last 16+ years just because some people prefer to call their return on investment by a different name, which you've only just noticed. And it doesn't matter to you at all what it's called. You're even allowed to invest in it if you like the returns, call them what you like.
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