Are Dividends on Shares Halal or Akin to Interest?

Hanafi Fiqh

Answered by Shaykh Faraz A. Khan

Question: Is it halal to earn dividends on shares that you have bought for a certain company?  I invested an “X” amount of money in an energy company that pays “X” percent annual dividend…is that dividend halal or is it similar to interest?

Answer: Assalamu alaikum wa rahmatullah,

I pray this finds you in the best of health and states.

Dividends on shares are akin to profit, not interest. Hence they are halal as long as the company one invests in is itself halal to invest in.

Please see this related answer for more detail:

Investment in Stocks

And Allah knows best.

Checked & Approved by Faraz Rabbani