Investing the Shariah Compliant way

are investments allowed in islam?

There are many forms of Shariah-compliant investments.
Investments in specific industries are prohibited by Islamic law. These include:

  • Alcohol
  • Adult Entertainment
  • Gambling
  • Traditional Finance (e.g., Banks)
  • Pork Products

Many Islamic scholars also advise against investing in tobacco and certain cases the weapons manufacturing industries.

What is the difference between an Islamic bank savings (term deposit) versus a shariah-compliant investment?

Islamic bank savings and term deposits are banking products. They are often referred to as investments in South Africa. It is important to distinguish between a bank product and a market-related investment product.

What types of Shariah compliant investments are available to South Africans?

Fortunately, most financial institutions in South Africa now offer some type of shariah-compliant investments.
However, it becomes difficult to navigate how to access all these investments on one investment platform or with one financial institution.

  • Stocks/Shares/Equities
  • Funds/Unit Trust
  • Sukuks
  • Gold and Precious Metals
  • Real Estate
  • Structured Notes


As long as the share is Shariah-compliant, it is acceptable to invest. However, companies that deal in prohibited industries or are considered excessively risky should be looked at with extra caution or excluded depending on your interpretation.

Funds/Unit Trusts

Equity mutual funds, unit trusts, exchange-traded funds (ETFs), and index funds follow similar rules as shares to be permissible. The only thing to be extra careful of is that funds are composed of many shares, so there are more companies to investigate than when you’re buying an individual share.


Sukuks are similar to bonds (government and corporate bonds), but they are not debt-based. While bonds are essentially loans, and the investor profits on interest from that loan (and thus not halal), Sukuk investors profit from the investment income.

Gold and other precious metals

Gold and other metals are typically viewed as halal as they appreciate over time but pose no other halal-related risks.

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Banking and lending can be hard to understand.

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