Q: Is a Muslim better off earning no interest on money in the bank, or taking interest with the intention of giving it to the poor?
الجواب حامدًا و مصليًا و منه الصدق و الصواب
A: If it is possible to open an account with an Islamic bank or the Islamic window of a conventional bank and each adheres properly to Sharīʿah principles then one should do so. If one is not able to do so, one should open a non-interest bearing account with a conventional bank. If one only has access to an account that gives the account holder interest or, if unclaimed, the accumulated interest is given to charities that propagate a non-Islamic ideology, then, as the lesser of two evils, one should take the interest and distribute it amongst the poor or to public welfare projects without the intention of reward. If an account that adheres to Sharīʿah principles or that does not earn any interest is available then one cannot open an interest bearing account with the intention of giving the interest to the poor.
And Allah knows best.
Mufti Mohammed Zubair Butt
Chair Al-Qalam Sharia Scholars Panel