10 Questions You Need To Ask Your Bank

7.     So where does my money go?

No, your bank doesn’t store your money in large underground vaults and guard it with missiles and machine guns – instead, it puts it to good use. Traditionally, your bank will lend out your money to others at a higher interest rate, which is how it makes a profit. In Islamic banking, however, giving and taking interest is forbidden, so the profits come from investing the money into businesses and activities that are considered ‘halal’ or ethical and beneficial to society.

8.     How safe is my money in your bank?

Now, that’s a tricky question. Banks in the UAE are generally considered a safe bet compared to their global counterparts. Even back when the global financial crisis hit, all deposits in local and international banks regulated by the Central Bank of the UAE, regardless of the amount, came with 100 per cent guarantee for three years.

9.     What happens to my money if your bank fails?

To know the background to that question, you should understand why banks fail – precisely because they don’t store your money in large underground vaults and guard it. Banks invest your money – either as loans or into businesses. So ask your bank once again what it will use your money for, and make sure there is no mention of investments of a highly speculative nature. While insurance covers bank deposits up to a certain amount in many countries, financial institutions that follow Islamic banking principles share the losses with their customers just like the profits – since their relationship is a partnership.

And finally, the mother of all questions: