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Ethical Investing and Saving

Putting money into a savings account means that you lose control of that money, and the banks can invest that money or lend it to other businesses as they see fit. Investing your money in stocks and shares, investment funds, or even directly investing in a company, you still have no control over how that money gets invested.

However, there is a way of maintaining control of how your money gets lent or invested. It is called ethical investing and saving.

What Is Considered Ethical?

One person’s definition of ethical is different from the next person’s. Everyone has the right to choose the industries, companies, or products in which to invest. 

An example would be a person who wants to avoid investing in companies that use child labour. Another person might stipulate that their money is only to be used to invest in firms that have green credentials. There is a seemingly infinite amount of ethical investing and saving options available. 

However, there is a set of ethical investing and saving criteria, and these are provided through Islamic Law. Sharia-compliant investments and savings are set out in several principles:

  • Do not invest in products or companies that are related to gambling, pornography, or pork.
  • Earning interest is considered to be exploitation.

Choosing Ethical Investments and Savings

Ethical saving and investing require you to research the banks you use and the companies that you invest in. Check their ethical principles against the values that you hold in high regard. 

Is Sharia Investing and Saving a Good Option?

Sharia banks are not a new phenomenon, and they can offer some incredibly competitive rates. They certainly are more ethical in their approach to investing and saving compared to mainstream accounts. 

You can be guaranteed that your money will not be used to invest in alcohol, gambling, military equipment, pornography, or weapons. Regardless of your religious beliefs, it is likely that most ethical investors would want to avoid these areas for their investments. 

Opening a Sharia account means that your money can be invested in oil companies, which might go against some people’s values. Sharia accounts also do not pay interest, but they do pay an expected rate of profit, and they are generally very reliable in paying this out. 

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