Is dividends permissible? Can it be used?

Q:Salaams this question is for Mufti,I am a Muslims and I am with a credit union that gives out dividends every year. Is that money halaal for me and if not,who can I give the money to thank you will wait for the answer inshaallah


A: Wa Alaikum As Salaam,

Credit Unions may get their profits from investments that may not be halal or from interest, and from this, they share dividends. Hence, as long as you are not sure as to where the dividends are generated from, you should not use it. Instead give it to the poor and needy.

If the Credit Union has informed you that it is based on interest or from investments that are not halal, then it means that the dividends will not be halal for you. If they have informed you that the dividends are from investments alone, which are compatible with the Shari’ah, then the dividends will be halal for you.


And Allah Knows Best,

Mufti Waseem Khan.