Sharia Deposits: What are the Practices and Conditions?

Sharia Deposits: What are the Practices and Conditions?
Sharia Deposits: What are the Practices and Conditions?
Sharia Deposits: What Are The Practices And Conditions? – Sharia deposits are time deposit products whose money is managed by Sharia banks based on Sharia principles. The difference between conventional deposits and Islamic deposits is how the deposit funds are managed. If you invest in Sharia deposits, the funds you deposit in the bank will be processed in a mudharabah contract.

Sharia Deposit Practices in Banking

Conventional deposits are based on interest rate calculations, including deposit types that are not justified by sharia law. Therefore, the appearance of Sharia deposits is managed by banks based on the principle of Sharia Mudharabah.

The client and the bank cooperate with each other, and the client provides capital for the business, the bank will use and invest the capital to finance the kind of business that does not violate sharia principles. This type of contract includes a mudharabah contract to raise funds.

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Basically, the practice of mudharabah contracts in Sharia deposits allows you, as the owner of the funds, to make or lose money. Because, unlike conventional deposits that benefit from fixed deposit rates until the end of the deposit period, Sharia deposits do not. Sharia deposit earnings are calculated using a profit sharing system or ratio.

Also, note that Sharia Deposits do not charge a penalty for withdrawing deposits before maturity, because you are not required to set interest rates. This is of course different if you invest in conventional deposits, which will incur a penalty of 0.5% to 3% if you choose to withdraw your deposit before maturity.

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General Conditions of Sharia Deposits in Banking

Sharia deposits have been regulated in fatwa no: 03/DSN-MUI/IV/2000 regarding deposits. The conditions are as follows:

  • In sharia deposit transactions, the customer is the shahibul maal or the owner of the funds and the bank acts as the mudharib or fund manager.
  • As a mudharib, the bank may conduct and develop various types of business, but must not conflict with Sharia principles; including making mudharabah agreements with other parties.
  • The capital must be expressed in amounts, in cash and not in accounts receivable.
  • The profit sharing must be in the form of a proportion or profit sharing as described in the contract to open a Sharia deposit account.
  • The bank, as a mudharib or fund manager, bears the operating costs of the deposit using the proportion of profits to which it is entitled.
  • Banks cannot reduce the client’s profit rate without the consent of the client in question.
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Therefore, it can be said that all matters related to the practice of saving that are justified in Islamic teachings have been established in fatwa No: 03/DSN-MUI/IV/2000 on saving. Based on applied practices and regulations, investing in Sharia deposits can bring the following benefits:

  • Your funds are safe.
  • Desired benefit.
  • This practice is definitely halal, so you can earn money from investment activities in accordance with Islamic rules and Sharia law.
  • Sharia deposits can be used as collateral for financing.