I have just started using a debit card but i want an option for a savings account . Most saving accounts come with 0.5-1% interest rate so what exactly does that mean?
Also would like to know if this is religiously acceptable (islam) (only if anyone has that knowledge please, its alright if you dont, you can avoid mentioning it)
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Let’s say you open a savings account with 1% interest. This means the money you have in your account increases by 1% each year. So if you start the year with £100, you would have £101 at the end of year. Which isn’t a great deal sadly.
If you want to make money from interest, you need a decent sum of money to begin with, and better interest rate. In the UK, you can get 5% savings accounts at the moment. So if you earn a salary, and save some each year to build up a nice cash deposit like £50,000, you would get £2,500 a year in interest.
Interest is forbidden in Islam though, and many Islamic customers tell their bank not to pay them interest. However some Sharia banks have an alternative like *’Expected Return’* which is basically the same as interest, but it’s Sharia compliant. Ask your bank about that.
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