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Islamic finance and Sharia-compliant savings
Find out how Islamic banks work and the top Sharia-compliant savings rates on the market
Faye was Headline Money Consumer Money Journalist of 2023 and a Wincott Award finalist in 2025. She's been investigating scams for nearly a decade.
Anna covers personal finance, helping readers make sense of savings, credit cards and insurance. Her insights are informed by experience in the financial services industry.
What is Islamic finance and Islamic banking?
Anyone who's recently checked a comparison site looking for the top-rate savings accounts and cash Isas will likely have spotted several Islamic banks towards the top of the tables.
Exclusive market-leading deals with Islamic providers are also increasingly available on savings platforms such as Raisin and Flagstone.
In fact, the UK is a leading Western hub for Islamic finance, according to a 2025 report by credit ratings agency Fitch Ratings, with several fully Sharia-compliant banks licensed here.
But, rather than paying an annual equivalent rate of interest on savings – like most banks do – Islamic banks pay an 'Expected Profit Rate' (EPR), so what savers earn depends on the profit the bank makes.
In line with this practice, Islamic banks don't offer overdrafts, as both charging and paying interest are not considered to be Sharia-compliant.
In this guide, we reveal the top Sharia-compliant rates, how the accounts work and how to take advantage of what they offer.
This article is for information purposes only and does not constitute advice. Please refer to the terms and conditions of the savings account provider before committing to any financial products. Please note that minimum and maximum deposit amounts vary, even across products with the same rate, so check the full details before you opt for a new account.
Top Sharia-compliant savings accounts
Here are the top 10 Sharia-compliant savings accounts for savers with a deposit of at least £5,000.
| One-year fixed rate | Habib Bank Zurich plc | 4.44% | £5,000 | Internet | On Maturity |
| One-year fixed rate | QIB (UK) - Raisin UK | 4.30% | £1,000 | Internet, mobile app | On Maturity |
| Six-month fixed rate | Gatehouse Bank | 4.25% | £1,000 | Internet | Monthly, On Maturity |
| One-year fixed rate cash Isa | Gatehouse Bank | 4.21% | £1,000 | Internet | Monthly, On Maturity |
| Two-year fixed rate | QIB (UK) - Raisin UK | 4.21% | £1,000 | Internet, mobile app | On Maturity (Compounded Annually) |
| One-year fixed rate | Gatehouse Bank | 4.20% | £1,000 | Internet | Monthly, On Maturity |
| 18-month fixed rate | Gatehouse Bank | 4.15% | £1,000 | Internet | Monthly, On Maturity |
| Two-year fixed rate | Gatehouse Bank | 4.15% | £1,000 | Internet | Monthly, On Maturity |
| Three-year fixed rate | Gatehouse Bank | 4.10% | £1,000 | Internet | Monthly, On Maturity |
| Three-year fixed rate | AlRayan Bank - Raisin UK | 4.05% | £1,000 | Internet, Mobile App | On Maturity (Compounded Annually) |
Table notes: rates sourced from Moneyfacts on 1 December 2025 and based on a balance of £5,000. No providers in this table had a sample size large enough for us to generate a Provider customer score. The table shows the top 10 Sharia-compliant savings products, and so offers an expected profit rate (EPR) as opposed to an annual equivalent rate (AER).
When Which? analysed Moneyfacts data in December 2025, there were 63 savings and cash Isa accounts that were registered as being Sharia-compliant.
Of these, there are 12 cash Isas, 40 are fixed-rate savings accounts, and 11 are variable-rate savings accounts.
How do Sharia-compliant savings work?
The term 'Sharia-compliant' refers to banks that adhere to Islamic principles. The word 'Halal' (meaning 'permissible' in Arabic) is also sometimes used to describe Sharia-compliant banks and products.
Sharia-compliant banks will not pay interest on your savings, but will instead pay a profit that's generated from the savings deposits.
Much like a 'normal' bank, an Islamic bank invests the money you pay into your savings into various ventures – but these will all be Sharia-compliant. This means money will not be lent to businesses that provide goods or services such as alcohol, tobacco or gambling, as these are all against Islamic principles.
Then, the money that's made on the investments goes to the bank, and it then pays its customers.
The EPR describes the profit that the bank expects to make; it's a target.
The banks are required to advertise the EPR as a percentage so that you can gauge what the account offers in comparison to interest rates you could receive or be charged by conventional banks.
However, the rate is not guaranteed and could be adjusted at any time – although at the time of writing, we have not heard of an instance where an EPR has been reduced.
If a bank does reduce its EPR, you should be notified beforehand.
- Find out more: to see how these Sharia-compliant accounts compare, check our guide to the best savings accounts 2025
Do I have to follow Islam to get an account?
No – anyone can open an account with an Islamic bank, regardless of their religious beliefs.
The only restrictions on opening a Sharia-compliant account are those present for all other savings accounts – for instance, you must be able to provide proof of identity and address, make the required minimum initial deposit, and, if applicable, follow the usual cash Isa rules and allowances.
Is my money safe in an Islamic bank?
A bank being Sharia-compliant does not affect how secure your money is.
If a UK bank or building society has been authorised by the Financial Conduct Authority (FCA) or the Prudential Regulation Authority (PRA), your savings will be protected by the Financial Services Compensation Scheme (FSCS).
Under this scheme, savings of up to £120,000 are protected – per person, per banking institution.
This means that, if a bank goes bust and you lose your savings, you can make a claim to the FSCS and you'll be entitled to get your money back. Some mortgages, insurance and investments could also be covered.
Many countries have similar schemes to cover non-UK banks, but it's best to check before you transfer your money to a foreign bank.
- Find out more: FSCS: are my savings safe?