Can I Cash-Out Bonds That Were Given to Me as a Gift?

Answered by ShaykhIrshaad Sedick



I’m a convert, and when I was a child, my grandparents gave my bonds as gifts that would mature years down the road. The bonds have matured now, and I’m wondering if it’s permissible or not to cash them, given that they primarily accrue based on riba. And if not halal, can I cash them, keep the initial investment, and then donate the interest?



In the Name of Allah, the Most Merciful and Compassionate. May Allah alleviate our difficulties and guide us to what pleases Him. Amin.
The accrued interest is not permissible, but you may accept the principal amount, and Allah knows best.
I commend your commitment to seeking Islamic guidance on this matter. Dealing with financial matters following Islamic principles is paramount for a Muslim.
In your situation, addressing the issue of Riba (usury/interest) is crucial. Riba is prohibited in Islam, and it is considered a grave sin. When bonds accrue interest, they typically involve Riba, and it is not permissible for a Muslim to benefit from such interest.
Regarding your bonds that have matured, here is a recommended course of action:
Take the interest, but give it away: As a Muslim, avoiding any benefit from riba is essential. When your bonds mature, you do not own the accrued interest. It should be returned to its rightful owners but note that this is not charity (sadaqa) and does not receive reward. Please see this related answer on what to do with impermissible income.
Keep the initial investment: The principal amount (the original sum you invested) is permissible for you to keep.
Please remember that seeking knowledge and acting per Islamic principles is commendable and may your journey as a convert be filled with peace and blessings.
I pray this is of benefit and that Allah guides us all.
[Shaykh] Irshaad Sedick
Checked and approved by Shaykh Faraz Rabbani

Shaykh Irshaad Sedick was raised in South Africa in a traditional Muslim family. He graduated from Dar al-Ulum al-Arabiyyah al-Islamiyyah in Strand, Western Cape, under the guidance of the late world-renowned scholar, Shaykh Taha Karaan. 

Shaykh Irshaad received Ijaza from many luminaries of the Islamic world, including Shaykh Taha Karaan, Mawlana Yusuf Karaan, and Mawlana Abdul Hafeez Makki, among others.

He is the author of the text “The Musnad of Ahmad ibn Hanbal: A Hujjah or not?” He has served as the Director of the Discover Islam Centre and Al Jeem Foundation. For the last five years till present, he has served as the Khatib of Masjid Ar-Rashideen, Mowbray, Cape Town.

Shaykh Irshaad has thirteen years of teaching experience at some of the leading Islamic institutes in Cape Town). He is currently building an Islamic online learning and media platform called ‘Isnad Academy’ and has completed his Master’s degree in the study of Islam at the University of Johannesburg. He has a keen interest in healthy living and fitness.