Al-wadiah (deposits) and its types

7-3-2000 | IslamWeb

Question:

I want to know the history of al-wadiah and deposits, also the types of al-wadiah under fiqh muamalah.

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Answer:

Praise be to Allah, the Lord of the Worlds; and blessings and peace be upon our Prophet Muhammad and upon all his Family and Companions. al-Wadi'ah (deposit) is among the lawful Mu'amalat (dealings) in Islam. It is defined as "Any belonging that is left by its owner or his representative with somebody to take care of it". It is likable for the person who is confident that he could take care of the al-Wadi'ah to accept it. If he does, he should then handle it with care and should not dispose of it. Allah Says (Interpretation of meaning): (Help you one another in virtue, righteousness and piety. But do not help one another in sin and transgression) .[5:2]. As for the deposits that are accepted by banks from individual or institutions, to be invested in several fields, they could be divided into three types: 1- Fixed deposits that are limited to fixed term- not less than three months - and which can not be taken back before the end of this term. The banks give some fixed interest for the depositors on a percentage base and which increase according to the increase of the fixed term. 2- Depositing money with notification: In this case, the depositor can not withdraw what he has deposited unless he notifies the bank before the end of an agreed period of time. The banks give also an interest lesser than the interest they give for fixed term deposits. 3 - Call deposits, these could be withdrawn at any time. The owners of this kind of deposits are not given any interests from the banks. This type of deposits is called current account. Truly speaking, if somebody thinks about these kinds of deposits, he finds that they are pure loans under the name of Wadi'ah (deposits). As a result, the fixed deposits and the deposits under notification, which result in interests given by the banks are Riba, because they are nothing but fixed terms loans with interest. This kind of loans involves both the delay usury and the excess usury. As for the excess usury, it is in the interest that is given by the bank in addition to what it has taken according to the pre agreement with the customer. The delay usury is in delaying what the bank should pay to the lender who is, in fact, the depositor himself. As for the third kind of deposits, it is lawful, as it does not involve any interest. But if the bank is a usury-taking bank, the depositor is then helping them in their dealings. But if one is obliged by necessity to deposit his money in a usury taking bank, one must not take any interest from that and should not take that interest as part of his own properties. But one could take it and use in public Muslim interests with the intention of getting rid of that interest not as a pious work that brings one nearer to Allah. Allah knows best.