What are Halal Investments?
Halal is an Arabic word that relates to something being lawful or permitted. It is a common word among Muslims to define approved practices.
Halal investment is an inclusive option for anyone to invest in, especially Muslims who consider certain social welfare and moral standards when investing.
Interestingly, this form of investment has existed since the 7th century. But only started to experience formalization in the 1960s. Another interesting part is that the entire halal finance industry hovers around a $2 trillion valuation!
In this article:
- What are Halal Investments
- Types of Halal Investments
- Halal Investments with Cowrywise
- How to set up a halal investment plan
Types of Halal Investments
The major types of halal investments are:
- Sukuk Bonds
- Ijarah
- Murabaha
- Halal equity funds
How do you earn returns on Halal Investments?
The principle of halal investment is zero-interest. However, you can earn returns through Sukuk bonds, Ijarah and halal equities. Its earning philosophy focuses on profit and loss sharing, not the outright charge of interests.
Sukuk Bonds
These are similar to regular bonds–long-term loans. But under a Sukuk arrangement, the lender does not own a certificate that guarantees periodic payment with interest. Rather, they own a part of the asset and gain from the earnings of the asset.
Let’s break this down further. If a regular $10 million bond is issued to build an airport at 10% for 10 years, the borrower is obligated to pay (with the agreed interest) whether the airport makes money or not. On the other hand, a Sukuk investor (the lender) gets part payments of the $10 million–every year–without any interest. They only gain if the airport makes money–because they own a part of it.
A key advantage of the Sukuk is that it encourages the fair allocation of returns. However, the downside is Sukuk bonds are limited in number. Since they must have an underlying asset for investors to own a part in, they can’t be issued easily like regular bonds.
Ijarah Investments
In basic terms, this simply means rental income. The owner of an asset–say a building–transfers the rights to another party for an agreed fee over a period of time. For example, an ijarah arrangement was set up to build a shopping complex. The investors only earn from the fixed rental charge.
Halal Equities
Assume you have a personal rule not to eat cakes. It definitely won’t feel right investing in a cake business. Halal equities exist to cater to such principles. Only screened businesses get invested in. A common one is to avoid investing in firms that produce alcohol.
Halal Investments with Cowrywise
The above investment options come at really high prices, and they are also hard to acquire–premium deals. Thankfully, with the help of fund managers, that manage halal mutual funds you can gain from these investments. Currently, we have four of such funds on Cowrywise:
- ARM Ethical Fund
- Lotus Halal Fixed Income Fund
- Lotus Halal Investment Fund
- United Capital Sukuk Fund
» Already have an account? Log in to check the top Halal Funds here
New here?
How to set up a Halal Investment plan
- Signup here
- Login and tap “Actions”
- Select “Invest in Mutual Funds”
- Choose your preferred halal fund
With these offerings and many other investment options, we make sure you keep your money working–regardless of your faith. Start investing today.
Watch this video to learn more about how to have a Halal account on Cowrywise:
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Good evening, my question to you please if open an account today in naira his the money will converted to us dollar to running the account
If you are investing in a dollar fund, yes.
Can the funds be traded rather than investing to increase gains?
What if your money is in cash(Dollar)
Please I already have an account, will I have to re-open another account before investing in dollar?
Can I invest in the next eurobond using dollar (cash)? If yes, will my returns be in dollar as well or it will be converted to naira??
Hi Helen, you can invest in Eurobonds at any time. However, we only accept naira deposits at the moment. Also, your returns accrue in dollars.
So which is best to earn the second way or first?
Focusing on returns will be better
Hi, what is the minimum amount you can invest with.
Hi there. You can invest the naira equivalent of $100
Hi Ope, does that mean I’d need two accnts to operate the fund, I.e a naira account to put in the naira funds which is d only 1 u currently accept, then a domicilary account where my returns would accrue in?
I want to invest in your Eurobond.
I have re-installed your new app an still can get the eurobond plan?
How much is the minimum equivalent dollar for a start?
Can i get an overview of all the benefits and rules of this plan?
***and still can’t get the eurobond plan?
Do you allow people from south Africa
Hello, my question is if I invest in the dollar mutual fund how do I get the returns?
Will it be in naira or in dollars and will I have to open another account for the returns to go into
Can’t you go down to 50USD
Hello Nsikak, currently the minimum is $100 but we we are looking at a possible review in the future.
The new minimum is $10
Hello will I have to re-open another account before investing in dollar?
luckysolomon444@gmail.com
I have invested in dollars mutual fund… It means I Will get my return in one year
Hi Jonathan,
How is the return/interest on your investment from November 27,2020 so far??
No you don’t have to, just click on invest in mutual funds, you will see the options there. You can navigate and alot with your account.
If I invest in the euro bond, it is expected that my return accrues in dollar, right? And how do I withdraw the dollar? Do I need to convert it to naira, if yes, how can I convert my dollar to naira on the app. Lastly, how long do I need to leave my investment on cowrywise? Or can I withdraw anytime?
Am interested. Let’s say I put in a $1,000. What the ROI…within 1 year.
Your interest is 6.6% then calculate it for one year, I think so
Hello,
As a Nigerian, can I save my money in dollars even though I don’t want to invest in a dollar mutual fund?
Pretty soon, yes!
If l invest in naira am l going to get it back in dollar
You’d be getting it at the prevalent naira exchange value of the dollar.
Am going to save in naira am going to get it back in dollar
You’d be getting it at the prevalent naira exchange value of the dollar.
Hello ope pls how much is $10 in naira
How long does the investment last.i.e when can I get my returns
I will give BIG CONGRATULATIONS to the entire Management of COWRYWISE for this wonderful opportunity to be a good investor with simple and sound education on various investment opportunities an investment can be done with little and grow within a short period period of time
God bless
Thank you so much ?
Now if I put 100$ in one year what is my return
If my return will be in the current dollar rate at the time, when i am investing and when am getting my returns, what exchange rate do u use? Black market rates or the bank rates – please verify in each case. Thanks.
Hello please if you can create the one we can start with the minimum $1 we’ll be happy ??
I just started investing in eurobond funds on cowrywise. So far so good, it has been a good platform to invest money and earn back. Kudos to the team behind this platform