Are ‘Child Trust Funds’ permissible?

Q: Are ‘Child Trust Funds’ permissible?


الجواب حامدا ومصليا ومسلما ومنه الصدق والصواب

A: The concept of a CTF in which money is set aside for a child until he/she reaches 18 years of age is one that is in conformity with Verse 6 of Surah al-Nisa.  However, it is how the money is invested, if at all, that is of concern to Muslims.  Quite clearly, if the money is put in to an interest bearing account or is invested in a manner that is repugnant to Shari’ah then this is not permissible.  However, if the money is invested in a Shari’ah compliant manner then this is acceptable.

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