Are Defense Savings Certificates allowed?
Question
My father died and left a sum of rupees one million in his account. He had one son (myself), two daughters and a wife. Now, both of my two elder sisters are married. I am unmarried and I live along with my mother.
Can I deposit the money he left in Government of Pakistan's Defense Saving Certificates Scheme (Bahbood Certificates for widowers) on the name of my mother or myself? Would the fixed amount received at the end of each month be considered as riba (interest) or normal profit like rent?
Response
Investment in defense (defence) savings certificates is an interest-based transaction and violates the principles of Islam. These certificates have a predetermined rate of return announced regularly by the government of Pakistan and that classifies the income earned on these certificates as interest.
Defense savings certificates were also one of the financial instruments banned in the verdict against interest by Shariat Appellate Bench of Supreme Court of Pakistan.