While most customers will be those who want to bank according to Islamic law, Sharia accounts are open to all regardless of religion or culture. Some non-Muslim savers may find the higher savings rates on offer tempting.
Sharia-compliant savings accounts work in the same way as standard accounts but with one key difference.
Paying or charging interest on money is against Islamic law, so instead savers get a share of the bank’s profits, known as the expected profit rate, or EPR.
This is the figure that appears on the bank’s website and in the best buy tables, but unlike interest it is not guaranteed, said Anna Bowes, founder of savings rate service Savings Champion. “If the bank cannot pay the EPR, it offers savers the option to cancel the bond, and pocket the sum earned up to that point.”
Their track record so far is good. For example, Since Al Rayan Bank was founded in 2004, it has always paid the rate of profit quoted to customers.