The Children’s Mutual Shariah Baby Bond® is designed to meet the needs of Muslim parents and children living in the UK.
It’s currently the only stakeholder Child Trust Fund account that respects the requirements of Islamic Shariah Law.
At The Children’s Mutual we recognise that parents of Muslim children need a Child Trust Fund (CTF) that takes their beliefs into account.
That’s why we’ve combined our expertise with the knowledge of a specially appointed Shariah Advisory Board to create the Shariah Baby Bond® Child Trust Fund account – which invests in a fund that only holds shares in companies that comply with Shariah law.
Shariah Baby Bond® Child Trust Fund is a stakeholder Child Trust Fund account. So it also includes all the government’s required features for stakeholder accounts, which are designed particularly for people with little or no experience of investment linked to company shares.
- Greater potential for longer-term growth by linking investment to company shares
- Investment reflects a range of shares to spread exposure to risk
- A built in feature to limit the effect of share prices falling in value as your child’s 18th birthday approaches
- Tax efficient investment growth and payout at 18
- Charges are capped at 1.5% of the fund’s value each year
What’s more, Shariah Baby Bond® Child Trust Fund also offers:
- Designed to be entirely in keeping with Islamic law
- It’s quick and easy to set up
- You, your family and friends can top-up your child’s account online
The minimum payment you can make into a CTF is £10. The maximum is £3,720 a year (birthday to birthday). The easiest way to make regular payments is by setting up a regular Direct Debit. You can also make one of payments by cheque or debit card.
The aim of Shariah Baby Bond® Child Trust Fund is to build up a tax-free lump sum for your child when they reach 18. This can then be used for whatever they choose – maybe to help fund further education, buy their first car or to travel the world.
Investment adhering to Islamic law
Shariah Baby Bond® Child Trust Fund fully adheres to Islamic law by investing mainly in a fund that holds shares only in companies that are listed on the Dow Jones Islamic Market Index. The fund (and any investment made outside the fund) is approved by our Shariah Advisory Board for this purpose.
This means that no investment will be made in any organisation involved in:
- pork related products
- weapons and defence
- conventional financial services
More details of the fund can be found in the document below.
Getting a great return on your investment
The Children’s Mutual believes that shares should produce better returns in the long-term than cash savings. That’s why our Shariah Baby Bond® CTF, which runs for 18 years, is based on investment in shares. However, past performance is not a guide to the future and your child could get back less than has been paid in.
Protecting your investment
Investing in individual shares carries more risk than spreading investment over a wider range of companies. That’s why Shariah Baby Bond® Child Trust Fund invests in a fund that aims to match the performance of an index including a wide range of Shariah compliant company shares, rather than just a few.
And, if the price of shares is lower in the early years, any money that you add to your child’s CTF account will be able to buy more shares in the fund – meaning that the account will have a better potential for growth should share prices start to rise.
The Children’s Mutual will gradually move the money in your child’s Shariah Baby Bond® to lower risk investments (such as government bonds and cash) from your child’s 13th birthday. This is called lifestyling.
Tax efficient investment
Under current regulations,all investment growth in your child’s Child Trust Fund, as well as the lump sum payout at 18, are free from personal taxes.
Another benefit of the Shariah Baby Bond® Child Trust Fund is that there are no hidden charges. There’s just a simple, fixed administration charge of 1.5% of the account’s value each year, already allowed for in the price of shares in the fund.
Shariah Advisory Board
Below you’ll find details of our specially appointed Shariah Advisory Board who have helped design our Shariah Baby Bond® Child Trust Fund account, and approved the fund it invests in.
Sheikh Nizam Yaquby
Sheikh Nizam is a member of the Shariah Committee for several Islamic financial institutions. He has a MSc in Finance (Canada) and is based in Bahrain. He has been a Professor of Tafsir, Hadith and Fiqh in Bahrain since 1976 and is the author of several articles on Islamic finance.
Dr Muhammed Imran
Dr Muhammed has a PhD in Islamic Finance. He has also obtained degrees in Islamic Jurisprudence from Karachi. Dr Muhammed is a faculty member of Jamia Darul Uloom, Karachi and Institute of Business Administration (IBA), Karachi as well as the author of various books of Shariah.
Mufti Abdul Kadir Barkatullah
Mufti Abdul is the Imam at the North London Finchley Mosque. He acquired a Mufti (diploma) in Islamic law and Fazil (Bachelor of Islamic Studies) from the Islamic University, India. He also works as a supervisor at the Islamic helpline for Fatwa and as a presenter at Vectone Urdu.
Mufti Muhammad Nurullah Shikder
Mufti Muhammad is a Barrister at Law. He received a LLB (Hons.) degree from London Guildhall University. He deals with reviewing and drafting Shariah documents and advises individuals and businesses on general Islamic finance.
If you wish to transfer your existing Child Trust Fund account to us, here’s how to transfer to us.
Please remember that because Shariah Baby Bond® investment is linked to shares, the value of the account could fall as well as rise, and your child may get back less than has been invested. All payments into the account belong to the child and cannot be returned to the payer if they change their mind. No-one can access the money except your child, and not until age 18.