Islamic scholars and bodies ruling on bonds.
Who ruled·What they said·Where to read it
A bond is a loan with interest, and the bodies below rule it out whoever issues it and whatever it is called.
Last reviewed 26 September 2026.
Rulings and positions
The Academy's 1990 ruling is short and firm. A bond that promises its face value back plus interest, or plus a fixed profit, is an interest-bearing loan. Issuing it, buying it and trading it are all prohibited.
It makes no difference who issues it. The ruling applies "no matter whether their issuing authority belongs to the private sector or is a State-affiliated public entity." Renaming the product changes nothing either, whether the bond is sold as a certificate, an investment security or a savings certificate, or the interest is called profit, income or a commission.
Zero coupon bonds fail too, since they are loans sold below face value. So do prize bonds, which the Academy also likens to gambling.
SourcesIIFA Resolution 60
Jordan's Iftaa' Board was asked in 1990 whether orphans' money could be invested in development bonds and treasury bills. Its answer was no, because both are loans made on the basis of riba.
Foundations and principles
The prohibition of riba rests on Al-Baqarah 2:275-281, Ali 'Imran 3:130 and Ar-Rum 30:39. A bond is a loan that must be repaid with more than was lent, which is riba in its plainest form.
Further reading
References
- International Islamic Fiqh Academy (14 to 20 March 1990). Resolution No. 60 (11/6) on Bonds, Jeddah. Source
- Board of Iftaa', Research and Islamic Studies, Jordan (20 August 1990). Resolution No. 17: Ruling on Investing Orphans' Funds in Development Bonds and Treasury Bills. Source
ShariaQuant summarises what each body ruled, quotes the wording that matters, and links to every source so you can read the full ruling yourself. This is a record of their rulings, not a fatwa of our own.