Are you interested to learn about the Absa Islamic term deposit in South Africa? Then check out this guide!
This product is Halal compliant and based on the Mudarabah principle of investments.
We will first show you the requirements to apply for this account.
What Are The Requirements
Below are the basic requirements to apply for this account:
- You should have an existing Absa bank account
- You should provide your South African ID
- You need proof of residence such as a lease or rent bill not older than three months
- You need an initial investment of at least R1000
You can apply for this product online through Absa online banking or the Absa mobile app.
You do not have to be Islamic to apply for this account.
These are the requirements to apply for the Absa Islamic term deposit in South Africa.
Absa Islamic Term Deposit
You cannot withdraw funds from this account at any time during the term unless it’s in exceptional circumstances in which you lose your share of the proceedings.
There is no interest gained from this account, but instead, you get a share of the profits r losses made from the investment.
Transparency is practiced, and there are no hidden administration fees charged.
You can open this account for an individual or a company.
The investment term is from 8 days to 5 years.
These are the features of the Absa Islamic term deposit in South Africa.
What Is The Mudarabah Principle
We will now briefly explain what the mudarabah principal states about investments.
The mudarabah principle states that you are entrusting Absa with your capital as an investor, and the bank is expected to invest the funds further for profit.
The proceeds from the invested funds must be shared according to the predetermined profits sharing ratio you initially agreed upon with Absa.
In this account, you agree on the profit-sharing ratio and not interest rates like in other Absa fixed deposit accounts.
The amount you get as profit depends on the success of the investment made by the bank.
You can also make a loss from the investment, and you will have to share the loss with the bank.
This is all you need to know about Absa Islamic term deposit in South Africa.