Saving and interest

This lesson asks you to identify financial goals, including earning and saving goals, and key steps towards them, and to explain interest rates and the fees that come with accounts and loans. The museum offers the jurists' account of saving and their definition of riba; it holds no record of bank products, so your class brings those. ¹

List a saving goal and write the steps to reach it. Then explain, in your own words, what a rate or a fee adds to the amount a person owes or receives over time.

Your class studies interest rates, as the expectation asks. The record here reports only what the jurists wrote, and it is theirs. The Kuwaiti encyclopaedia of jurisprudence records that riba is excess in the lexical sense, and that in the jurists' usage it is an excess on one of two counter-values in an exchange, or an excess on a debt in return for delay; the schools define it in different words ^{2 3}. It states that riba is forbidden by the Qur'an, the Sunna and consensus ^{4 5}. It adds that the commentators give reasons, among them that riba takes a person's property without a counter-value, turns people from earning, and cuts off good lending between them ^{6 7}.

On saving wealth beyond one's needs once its zakat is paid, the encyclopaedia records a difference in its entry on saving. The majority permit it, citing the saying of Sa'd ibn Abi Waqqas that leaving one's heirs wealthy is better than leaving them dependent on people ⁸. Abu Dharr al-Ghifari (may God be pleased with him) held that saving surplus beyond one's needs is forbidden even when its zakat is paid ^{8 9}. The encyclopaedia adds that saving to secure one's own needs and those of one's household is lawful saving ⁹. The museum gives no verdict.

The commentators' reasons for the ban on riba, as the record gives them, are that it takes property without a counter-value, turns people from earning, and cuts off good lending. In the system your class studies, accounts and loans carry interest rates and fees. Compare the two: what does each try to protect, and why might the people who built each see it that way?

• Riba: how the schools define it, the kinds the jurists distinguish, and the reasons the commentators give.
• Saving (idkhar): the jurists on saving by a person and by the state, and where they differ.
• Debt (dayn): what a debt is and how, in the jurists' account, it ends.

Read the records on saving (idkhar) and on riba. Write one sentence from each that you find easy to restate, and one question you would ask a teacher.