What is an ISA?
An ISA (Individual Savings Account) is a UK government tax wrapper that lets you save or invest up to £20,000 per tax year with all growth, income, and withdrawals completely tax-free. There is no Capital Gains Tax, no Income Tax on interest or dividends, and no need to declare ISA income on your tax return.
The ISA itself is just a wrapper — what matters from a halal perspective is what you put inside it. An ISA containing interest-bearing savings is not halal. An ISA containing Sharia-compliant investments is perfectly permissible.
Key principle: The ISA wrapper is halal. The tax-free benefit is a government allowance, not interest from lending. What goes inside must be Sharia-compliant.
Which types of ISA can be halal?
Cash ISA — can be halal
A Cash ISA pays interest in a conventional bank — which is riba and not halal. However, Al Rayan Bank offers a Sharia-compliant Cash ISA that pays an Expected Profit Rate (EPR) through a Mudarabah structure instead of interest. This is one of the only halal Cash ISAs in the UK.
Stocks & Shares ISA — can be halal
A Stocks & Shares ISA is halal if the underlying investments are Sharia-screened. Wahed Invest offers an AAOIFI-certified Stocks & Shares ISA from £50. You can also use Trading 212 to hold halal ETFs like ISUS (iShares MSCI USA Islamic) inside a Stocks & Shares ISA — but you must screen the investments yourself.
Lifetime ISA — can be halal (for property purchase)
The Lifetime ISA gives a 25% government bonus (up to £1,000/year) for first-time buyers saving for a property deposit or for retirement. The bonus is a government grant, not interest — generally considered permissible. The key is choosing a halal-invested LISA where one is available.
Junior ISA — can be halal
Wahed Invest offers a Junior ISA for children, with Sharia-compliant portfolios from as little as £50. A great way to build halal wealth for your children tax-free.
What to avoid inside an ISA: conventional savings accounts paying interest, bond funds (which lend at interest), mixed equity funds containing banks/alcohol/tobacco companies, and any fund without Sharia screening.
Best halal ISA providers 2026
Al Rayan Bank offers the UK's only dedicated halal Cash ISA, using a Mudarabah profit-sharing structure instead of interest. Your money is FSCS protected (up to £120,000) and grows through Sharia-compliant investment activities rather than lending at interest. Verify current EPR directly with Al Rayan as rates change frequently.
Wahed Invest offers an AAOIFI-certified Stocks & Shares ISA and Junior ISA. You answer a few risk questions and Wahed builds and manages a diversified halal portfolio for you — stocks, Sukuk, and gold — all Sharia-screened. 1% annual platform fee, subject to a £2.99/month minimum. Ideal for beginners who want a hands-off halal ISA.
Simply Ethical is the UK's longest-established halal investment platform (founded 2009), offering a managed Stocks & Shares ISA with genuine financial advice. Minimum £1,000. Annual fee — contact Simply Ethical directly for a full cost breakdown. Best for those who want professional management of their halal ISA.
Hold ISUS (iShares MSCI USA Islamic UCITS ETF) inside a Trading 212 Stocks & Shares ISA for zero platform fee. ISUS is Sharia-screened and tracks the MSCI USA Islamic index. Use Zoya to screen any individual stocks you add alongside. Best for confident self-directed investors who want low costs.
Note: Trading 212 is not Sharia-certified — you are responsible for your own screening. ISUS is certified by its own Sharia board.
Side-by-side comparison
| Provider | ISA Type | Min | Annual Fee | Certification | Apply |
|---|---|---|---|---|---|
| Al Rayan Bank | Cash ISA | Verify direct | None | SSB ✓ | Apply → |
| Wahed Invest | S&S ISA + JISA | £50 | 1% (min £2.99/mo) | AAOIFI ✓ | Apply → |
| Simply Ethical | S&S ISA | £1,000 | Verify direct | Sharia ✓ | Apply → |
| Trading 212 + ISUS | S&S ISA | £1 | £0 | Self-screen | Apply → |
Frequently asked questions
Yes — since April 2024 the rules changed to allow you to subscribe to multiple ISAs of the same type in one tax year. So you can hold a halal Cash ISA at Al Rayan Bank and a halal Stocks & Shares ISA at Wahed simultaneously, provided your total subscriptions stay within the £20,000 annual allowance.
The 25% government bonus is a grant from HMRC, not interest from a lending arrangement. It is generally considered permissible by Islamic scholars. The key question is what the underlying LISA funds invest in — choose a Sharia-compliant investment option where possible.
Yes — ISA savings and investments are not exempt from Zakat. The ISA wrapper is a tax benefit, not a religious exemption. If your total zakatable wealth (including ISA holdings) exceeds the nisab threshold and has been held for a full lunar year (hawl), Zakat at 2.5% is due. See our Zakat on investments guide.
Yes — ISA transfers do not use up your annual allowance and the process is straightforward. Contact Al Rayan Bank directly to initiate the transfer; they handle the paperwork. You keep your tax-free status throughout.
Your existing ISA remains open and retains its tax-free status after you leave the UK. However, you can no longer make new contributions once you are no longer a UK resident for tax purposes. The investments inside can stay as they are.