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EverydayAugust 21, 20261 min read
Is a 401(k) with Bond Funds Haram? Interest Inside Target-Date Plans
Target-date and bond funds inside a 401(k) often earn riba. Purification vs exiting vs Shariah windows. Distinct from how to calculate zakat on a 401(k).
Short answer: Zakat on a 401(k) is a calculation question — see zakat on 401k. Whether the holdings are lawful is separate. Bond / stable-value / target-date sleeves often include interest-bearing debt. Many scholars advise equity screens, purification, or a Shariah window if your plan offers one. UK workplace pensions: same logic. Not a fatwa.
| Holding | Issue |
|---|---|
| Screened equity fund | Follow stocks / index |
| Bond / gilt / credit fund | Riba |
| Target-date mix | Inherits the bond sleeve |
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This article is educational and not a fatwa. Consult a certified Islamic scholar.