Derbyshire man makes £1k thanks to Islamic banking

Neil Sinclair says it was a 'no brainer' to open an account with Al Rayan Bank.
Neil Sinclair says it was a 'no brainer' to open an account with Al Rayan Bank.

A Derbyshire man has made £1,000 after putting his money into an Islamic bank.

Neil Sinclair opened a deposit account with Al Rayan Bank last year.

He had never used an Islamic bank before and came across Al Rayan after searching online for lenders offering the best interest rates.

Mr Sinclair said: “I was looking for a savings account to start putting some money away for my children.

“I searched online and Al Rayan’s rate was the best by far.

“It was a no-brainer.”

Mr Sinclair, a non-Muslim, said he deals with the bank over the phone and has never felt the need to go into a branch.

He deposited £33,000 into a two-year fixed Individual Term Deposit account in July, 2016.

His most recent statement, dated the middle of October, shows this has grown to £34,003.63.

Mr Sinclair said: “I’m really pleased with the return so far.

“I picked Al Rayan after shopping around but I also like what Islamic banking is about.

“I like that my money is going to be used for products and services that are ethical.”

What is Islamic investing?

An Islamic bank operates in a completely different way from a typical high street bank. 

The principle behind Islamic finance is not to make money from money. 

Therefore, Sharia-compliant banks are not allowed to pay or charge interest. 

Instead, they make money by focusing on business, rental and trade activities to generate profits.

This means customers are not offered a guaranteed interest rate on their savings but are offered a target profit. 

In practice, this profit rate is usually achieved but of course there is a chance it may not be.

Islamic banks are becoming increasingly popular with non-Muslim savers due to their attractive rates and their ethical principles - Islamic banks will not finance businesses in the tobacco, alcohol, gambling, defence and adult entertainment industries.