MUSLIMCREED The new Islamic banking division of University Bank has officially opened its doors to the public, and we are eager to answer your questions! Is there an interest rate associated with my account? How do you feel about micro-payments? You’ve got questions, we’ve got answers! Visit our new Islamic Banking section of the University Bank website or ask us your questions in the comments below!
What is Islamic Banking?
Islamic Banking has been around since the time of the Prophet Muhammad in the 7th century. It’s a type of finance that follows Islamic law, which prohibits banks from charging interest. The foundation of an Islamic Bank is shared equity between investors and depositors. For example, you could deposit $1000 for one year and receive $1100 after 12 months at an annual rate of 10%. As with any other bank, you can deposit money and withdraw it at any time without penalty.
What are the key benefits of Islamic Banking?
With the increasing number of Muslims living in the United States and abroad, University Bank has announced their newest service: Islamic Banking. With many misconceptions about this type of banking, we’re here to help you understand everything you need to know about it.
First, how does Islamic Banking work? Under sharia law, usury or interest is forbidden. Therefore loans are given without interest charges or with a below-market interest rate (profit-sharing).
Second Secondly, how do I open an account with Islamic Banking? Opening an account requires only two documents: a passport and a copy of our sharia compliance certificate.
Thirdly, can anyone open an account? Yes! Our products are available to all customers regardless of religion.
How does Islamic Banking work?
Islamic Banking, or Shariah-compliant finance, operates under the belief that money should be invested in a way that doesn’t lead to excessive risks. This means an Islamic Bank will not lend money for things like alcohol, gambling, and interest-bearing loans.
But what does this mean for you? Well… firstly, all transactions are with tangible assets such as real estate or commodities, so if you want to buy a car, for example, instead of taking out a loan from the bank you would buy the car outright.
The value of the car would then decrease over time as it depreciates and eventually becomes worth less than what was originally paid.
What products and services does the new Islamic Banking division offer?
The Islamic Banking Division offers services tailored to the Muslim community. University Bank will offer a full range of financial services including checking and savings accounts, home loans, credit cards, auto loans and business financing.
The Islamic Banking Division will also provide investment-related products such as sharia-compliant mutual funds, annuities and segregated accounts. These products are compliant with Islam’s prohibition against charging or paying interest and would involve investments based on profit-sharing arrangements. Investments in these types of securities may not be appropriate for everyone. Please consult with your tax advisor before investing.
Read : HOW ISLAMIC BANKING WORKS
How can I get started with Islamic Banking?
If you are interested in opening an account with Islamic Banking, you can contact a branch of University Bank to discuss the options that are available. All University Bank branches have staff who are fully trained in Islamic Banking and will be happy to answer any questions you may have. How much interest do I earn on my savings?: The interest rate varies from time to time, depending on the current market conditions.
What about credit cards?: You can apply for our Platinum Credit Card as long as it has been issued by a partner institution that adheres to Islamic guidelines.
Can I still take out a loan? Sure thing! A home mortgage or car loan would need to meet Sharia principles for lending.