What's the difference between an Islamic bank account and a 'normal' account?
I've seen Lloyds offer Islamic bank accounts and just want to satisfy my curiosity.
Religion & Spirituality - 5 Answers
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Answer 1 :
Islamic accounts can't have any lending involved or earning interest.
Answer 2 :
It limits the amount you can borrow, I think. It's Shariah approved :D so you don't have to go to hell for borrowing too much.
Answer 3 :
This question's been asked before and the answer makes sense. Hope this helps. Cheers, Steve http://uk.answers.yahoo.com/question/index?qid=20090613044806AAVwdZX
Answer 4 :
To be Sharia compliant, a bank account must not offer or demand the payment of interest. Obviously banks are quite happy to keep anyone's money without paying them interest, but they won't loan money without payment of some kind. In order to get around this, technically the bank doesn't loan money, but instead it buys the item for you. You rent the item from them whilst saving up in your non-interest account until you can afford to buy it outright - usually but not always at the original purchase price - from the bank. Obviously this is just a form of words, but it's enough to get around the interest problem by calling it rent. So the change of wording is enough to satisfy Muslims, but in reality it should be no different to paying interest on a loan. One possible difference could be that if the bank did buy something that increases in value - a house for example, when you'd saved up enough money to pay off the original purchase price there would be nothing to stop the bank insisting that as its value has gone up, they will raise the price, despite the fact that you've already been "renting" the item from them.
Answer 5 :
Further to previous answers Islamic account holders also pay lower charges if they overdraw.
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