What part of a guaranteed investment certificate is Haram ?

Fatawa Question

What part of a Guaranteed Investment Certificate is Haram ? My questions are about purifying myself because of my investments. I have money in a GIC (guaranteed investment certificate) which focuses on blue chip companies : There portfolio breakdown is as follows : 20 % Energy, 10 % Conglomerates, 10 % Utilities, 10 % Telecommunications Services, 10 % Mines and Minerals, 10 % Financial Services, 10 % Media, 10 % Real Estate, 10 % Industrials. I was told the actual companies might change but the portfolio % stay around the same. The earliest I can get my money out is 2 years and they guarantee return of original investment + .5 % annually up to a maximum of 4.5 % 1-Could you list all the Haram / Riba aspects of the transaction ? 2-Do I purge the interest I make from the 10 % financials ? if so how ? and are there anything else I have to do to purify it / myself ? 3-Just to understand the issues : if hypothetically there was an GIC portfolio that didn’t invest in financials and disliked companies, and they only guaranteed return of investment but a possible increase (not guaranteed) would that be allowed ?

Fatwa

Click hereto view more

Publisher

al-Qalam Shariah Scholar Panel

Publication Date

2012-02-04

Country of Publication

United Kingdom

Main Subjects

Financial and Accounting Sciences
Religion
Islamic Studies

Topics

• Islamic jurisprudence
• Investments
• Bonds
• Taboos
• Hedge(Finance)
• Usury

No. of Pages

1

Data Type

Fatawa

Language

English

Record ID

BIM-726813

• APA
• MLA
• AMA