Investment In Government Saving Schemes And Employers Provident Funds
You can go the settings of your phone to make sure that notifications are turned on for Ask Ghamidi. Government savings schemes should be avoided because they work close to interest based loans that are haram. Employee retirement funds are not haram. They function on a completely different principle. They constitute a benefit that you receive for your work generally in lieu of pension.
Interest is a generic term that means many things. What’s prohibited is riba which is the demand of an additional amount on top of the principle in a loan transaction of a consumable item . Retirement funds in general can’t be considered riba because they’re offered as a benefit of employment as opposed to a loan. In contrast , as explained in the article shared by Umer Qureshi sahab above, government saving schemes are closer to riba because in essence they’re a way for the government to borrow money (loan). I am very certain of this opinion of Ghamidi sahab, however, if you would like to have a chance to speak with him directly, you can register for the next Ask Ghamidi Live event. The details of this event can be found at: Discussion 54434
Dear brother, try to understand the question :- 1. If letting go extra amount is different than demanding than why we keep money in current of bank instead of Saving. By keeping our money into current account we actually Forego the extra amount i.e. we are not demanding/ receiving extra amount on our deposits. Where as extra amount from banks is haram. This mean if you don’t forego extra amount , indirectly you are asking for it( through 3rd party, which is bank Incase of accounts). 2.By exploitation, I meant that GPF will be invested or lended to society in the same way as of in the case of Govt investment schemes or corporate banking scheme which will ultimately exploit the society. (Employer , Govt or corporate, will exploit the society same as in the case of individual investment) Regards,