Buying share, stocks and mutual funds : limited mutual funds choice of 401 K

Fatawa Question

Assalamu Alaikum I work for a corporation which offers a 401 K. I only have 9 mutual funds to choose from and one option which pays a fixed rate of interest. 1. If I put money into the fixed account, could I just give the interest earnings away to make my savings Halal ? 2. None of the mutual fund options are Halal, but some are better than others. For example, I would not choose a bond fund, but do have money in a growth equity fund because it is all stocks. The problem is that some of those stocks are financial, e.g., bank of America. I have no control over the actual stocks in a fund. 3. The only reason I use the 401 K is because of the tax savings and because my company matches my contribution up to $ 150 per month. If I do not contribute then I do not get that extra $ 1800 per year. My concern is that the choices are not Halal so would I be better off passing on the $ 1800 and saving on my own. 4. Is there anyway to be within the confines of Halal activity when the stock market and the way of doing business in the US is Haram ? I appreciate your answers and Hadith. I know the basic tenets of Halal investing, but I cannot see how to make them work in the reality of this country. If I cannot invest Halal should I not invest at all or just invest and not worry about whether the choice is "less Haram" than another choice ?

Fatwa

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Publication Date

2002-01-14

Main Subjects

Economics & Business Administration
Financial and Accounting Sciences
Islamic Studies

Topics

• Islamic jurisprudence
• Islamic economics
• Financial markets
• Mutual funds

No. of Pages

1

Data Type

Fatawa

Language

English

Record ID

BIM-726852

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• MLA
• AMA