INCOME FUND WITH FCB
QUESTION:
As Salaamu Alaikum,
I was wondering, if you all are familiar with First Citizens, they have an investment account called the Abercrombie account. Is it permissible to join that account?
ANSWER:
Wa Alaikum As Salaam,
The Abercrombie Fixed Income Fund is an investment fund with FCB on which interest is obtained. As stated by FCB, ‘Interest is compounded monthly on this account’. Therefore, this will not be permissible, since it brings interest to the account holder, and not a profit on investment. FCB has also mentioned that it has zero (0) level risk. According to the principles of Islamic Finance, a halal investment must have a risk which the investor must be prepared to accept. But here, it has a ‘zero level risk’ which makes it speculative as to what is the true nature of this fund.
The FCB has also stated that ‘The Abercrombie Fixed Income Fund’ invests in bonds and securities. These are known to be interest-bearing loan instruments and as such, are totally Haram in Islam. Therefore, it will not be permissible to join/invest in the Abercrombie Fixed Income Fund of First Citizens Bank.
And Allah Knows best
Mufti Waseem Khan
15/06/2022