What should I do with the interest my bank has paid me?

Almost everyone in a country with a conventional banking system ends up holding some. A current account pays a little; a savings account pays more; sometimes it arrives without being asked for. The question is not whether taking it was permissible — it was not — but what to do with money that is now sitting in your account.

Why it cannot simply stay there

This is the one point on which there is no real disagreement. Keeping it means benefiting from it, which is the thing prohibited in the first place. Nor can it be quietly spent on ordinary expenses, since spending is benefiting. It has to leave your wealth.

It also cannot be left with the bank in the hope that this is somehow cleaner. Several contemporary scholars make this point sharply: money surrendered back to the institution strengthens the very system in question, and it certainly does not reach anyone in need. Between the two, giving it away is agreed on by everyone who has addressed it.

The intention matters, and it is unusual

This is where people most often go wrong. The money is disposed of, not donated. You do not intend it as sadaqah, you do not expect reward for it, and you do not count it towards your zakat. It is closer to putting down something you should not be holding than to giving a gift.

The practical consequence is that it must be tracked separately from your actual charity. Mixing it into your normal giving muddles both — the disposal becomes a donation in your own mind, and your real sadaqah is diluted by money that was never yours to be generous with.

Who may receive it

Here scholars do differ, and the difference is worth knowing before you give.

• The most common position permits giving it to the poor generally, on the reasoning that the prohibition attaches to your benefiting from it rather than to the money being unusable by anyone.
• A more cautious position restricts it to public benefit that is not worship — infrastructure, road repair, hospital costs, disaster relief — rather than to individuals.
• A stricter minority hold that it should not be given to a mosque, an Islamic school or anything carrying the character of worship, since these are places for pure wealth.

In practice many charities in Britain and America maintain a separate fund for exactly this and will tell you plainly which of their work it goes to. Asking that question of a charity is a fair one, and a well-run charity will have a ready answer.

Then close the tap

Disposal deals with what has arrived. It does not deal with what is arriving. Most banks in Muslim-minority countries offer a basic account that pays nothing, and switching to one ends the problem rather than managing it annually. Where an Islamic bank is available and its products satisfy your own scholar, that is the fuller answer.

One last point that catches people out: this money is not part of your zakatable wealth, because it is not lawfully yours. Deduct it before you calculate, or you will end up paying zakat on money you are about to give away entirely.