What Makes an Investment Halal?
Before comparing products, it helps to understand the three core principles that govern halal investment in Pakistan.
Interest whether paid or received is prohibited. A Shariah-compliant savings product replaces fixed interest with profit-sharing, where the bank and the depositor share in actual earnings. If the fund does well, you earn more. If it earns less, the return falls accordingly.
Contracts must be transparent. Excessive speculation, ambiguous terms or transactions where one party bears all the risk while the other takes all the reward are not permitted. This is why Islamic finance uses named contracts Mudaraba, Murabaha, Ijarah, Musharakah each with defined rules.
Where a Shariah-compliant fund inadvertently earns income from non-compliant sources (this can happen in equity investments at the margins), investors are expected to donate that portion to charity. This is called tazkiyah purification of earnings.
Halal Investment Options in Pakistan: An Overview
1. Islamic Bank Deposits and Term Certificates
The most accessible starting point for halal investment in Pakistan is an Islamic savings account or term certificate. Rather than paying interest, the bank pools your deposit and invests it in Shariah-compliant assets. Profit is distributed based on your share of the pool.
Allied Aitebar Islamic Investment Certificates — offered by Allied Bank’s Islamic banking arm — are structured on the Mudaraba contract. Under Mudaraba, you act as the Rabb-ul-Maal (the investor who provides capital) and the bank acts as the Mudarib (the fund manager). Profit is shared; loss on the capital falls on the investor.
2. Short-Term Halal Savings: Allied Aitebar Behtar Munafa Certificate
For investors with shorter time horizons — or those who want the flexibility to revisit their position regularly — the Allied Aitebar Behtar Munafa Certificate is designed for tenors of one month to one year.
| Feature | Detail |
|---|---|
| Contract | Mudaraba |
| Tenors | 1 month, 3 months, 6 months, 1 year |
| Profit payment | Monthly (3-, 6- and 12-month tenors) or at maturity |
| Minimum investment | PKR 25,000 |
| Maximum investment | No upper limit |
| Premature encashment | Allowed — no charges; nearest completed tenor rate applies |
| Eligible investors | Individuals and businesses |
The Behtar Munafa Certificate is open to both existing and new Allied Bank account holders. It rolls over automatically on maturity if instructed.
3. Higher Returns for Remittance Recipients: Allied Islamic Express Plus 1 AIIC
If you receive foreign home remittances, the Allied Islamic Express Plus 1 Allied Islamic Investment Certificate (AIIC) offers up to 1% higher profit than regular Islamic Investment Certificates — for the same tenor.
This product is exclusively available to Allied Aitebar Express Account holders. The Express Account is designed for people who regularly receive remittances from abroad.
| Feature | Detail |
|---|---|
| Contract | Mudaraba |
| Tenors | 1 month, 3 months, 6 months, 12 months |
| Profit payment | At maturity (most tenors); monthly or maturity (12-month only) |
| Minimum investment | PKR 25,000 |
| Rollover | Not permitted — funds credited to linked current account at maturity |
| Eligible investors | Allied Aitebar Express Account holders only |
To apply, visit any Allied Islamic Banking Branch or Islamic Banking Window. You will need a linked Allied Islamic current account for profit and principal disbursement.
4. Fixed-Return Halal Mutual Funds
Beyond bank deposits, halal investment in Pakistan includes Shariah-compliant mutual funds — which invest in government securities, sukuk (Islamic bonds) and screened equities rather than interest-bearing instruments.
ABL Funds, Allied Bank’s asset management arm, offers a growing range of Shariah-compliant fund offerings.
ABL Fixed Return Plan (ABL-FRP)
The ABL Fixed Return Plan is an allocation plan under the ABL Special Savings Fund, a capital-protected open-end scheme.
What it does: Invests up to 100% in AA-rated and above authorized instruments to deliver a fixed return at maturity, with capital preservation for investors who remain in the plan for the full twelve-month period.
| Feature | Detail |
|---|---|
| Minimum investment | PKR 25,000 |
| Entry load | NIL |
| Exit load | NIL |
| Investment horizon | 12 months |
| Expected annualised return | 16.25% (subject to market conditions — not guaranteed) |
| Risk level | Low |
Note: Expected return figures are indicative only. Actual returns depend on market performance and the fund’s investment outcomes. Profit rates are variable and not guaranteed.
Investors who redeem before maturity will face a contingent load equivalent to the net loss incurred due to early redemption, as determined by ABL Funds.
ABL Special Savings Plan-IV (ABL SSP-IV)
ABL Special Savings Plan-IV is designed for investors who want regular monthly income rather than a lump sum at maturity. It invests up to 100% in AAA-rated government securities.
| Feature | Detail |
|---|---|
| Minimum investment | PKR 5,000 |
| Maturity | 24 months |
| Profit payout | Monthly |
| Entry load | Up to 1% |
| Risk level | Minimal |
This is a suitable option for salaried professionals or retirees who want their savings to generate a steady monthly supplement.
ABL Special Savings Plan-I (ABL SSP-I)
Similar in structure to SSP-IV but with quarterly profit payouts, ABL Special Savings Plan-I also invests in AAA-rated government securities with a 24-month maturity period.
| Feature | Detail |
|---|---|
| Minimum investment | PKR 5,000 |
| Maturity | 24 months |
| Profit payout | Quarterly |
| Entry load | Up to 1% |
| Risk level | Minimal |
Both SSP plans are actively managed by the ABL Funds team and are part of the ABL Special Savings Fund umbrella.
5. Goal-Based Halal Investing: ABL AMC Financial Planner
For investors who want to invest with a specific purpose in mind — a child’s education, a home, Hajj, or retirement — the ABL AMC Financial Planner structures investments around life-stage goals through systematic monthly contributions.
The Financial Planner is an administrative plan built on two underlying funds: ABL Income Fund (ABL IF) and ABL Stock Fund (ABL SF). It comes in three sub-plans based on risk appetite:
Key Benefits
- Minimum initial investment of PKR 25,000; subsequent contributions from PKR 1,000
- Free life, accidental and medical insurance coverage for investments of PKR 200,000 and above
- Rupee cost averaging through periodic investments
- Encashment within six business days
Insurance Coverage at a Glance
| Investment Amount | Coverage |
|---|---|
| Below PKR 200,000 | None |
| PKR 200,000–399,999 | PKR 250,000 |
| PKR 400,000–599,999 | PKR 500,000 |
| PKR 600,000–799,999 | PKR 750,000 |
| PKR 800,000–1,000,000 | PKR 1,000,000 |
| PKR 1,000,000 or above | PKR 1,500,000 |
| Investment Amount | Coverage |
|---|---|
| Below PKR 200,000 | None |
| PKR 200,000–399,999 | PKR 1,000,000 |
| PKR 400,000–599,999 | PKR 2,000,000 |
| PKR 600,000–799,999 | PKR 3,000,000 |
| PKR 800,000–1,000,000 | PKR 4,000,000 |
| PKR 1,000,000 or above | PKR 5,000,000 |
| Investment Amount | Coverage |
|---|---|
| Below PKR 200,000 | None |
| PKR 200,000–399,999 | PKR 25,000 |
| PKR 400,000–599,999 | PKR 50,000 |
| PKR 600,000–799,999 | PKR 75,000 |
| PKR 800,000–1,000,000 | PKR 100,000 |
| PKR 1,000,000 or above | PKR 125,000 |
The Financial Planner is particularly useful for investors who benefit from rupee cost averaging, spreading purchases across market cycles rather than investing a lump sum at one point.
Explore the full range of Shariah-compliant investment plans at ABL Funds.
Allied Aitebar Shariah-Compliant Mutual Funds
Beyond fixed-return and savings plans, ABL Funds offers a dedicated range of Shariah-screened mutual funds across multiple asset classes. These include:
All Shariah-compliant mutual funds managed by ABL Funds are supervised by a dedicated Shariah advisory board. Incidental non-compliant income, if any, is purified through charitable donation — ensuring the investment remains clean throughout.
Comparing Halal Investment Options in Pakistan
Frequently Asked Questions
Q. What is the difference between a Mudaraba account and a conventional savings account?
In a conventional savings account, the bank pays you a fixed interest rate regardless of what it does with your money. In a Mudaraba-based Islamic account, your deposit is invested in Shariah-compliant assets/avenues and profit is distributed based on actual earnings. The profit rate varies with the performance of the investment pool, and no fixed return is guaranteed.
Q. Can I invest in halal mutual funds without an Allied Bank account?
Yes. ABL Funds products are accessible through the ABL Funds portal and can be set up with a CNIC and bank account at most financial institutions. However, Allied Bank account holders can access and manage investments directly through the myABL app.
Q. Are the profit rates on Islamic Investment Certificates fixed or variable?
Profit rates on Mudaraba-based certificates are variable and declared periodically by the bank. They depend on the actual earnings of the investment pool. No profit rate is guaranteed. You can check current declared rates on the Allied Aitebar profit rates page.
Q. Is zakat automatically deducted from Allied Islamic Investment Certificates?
Yes, zakat is deducted as per the Zakat and Ushr Ordinance 1980 unless you submit a valid exemption certificate. Withholding tax on profit is also applicable under prevailing income tax provisions.
Q. What happens if I redeem an Allied Aitebar certificate before maturity?
Premature encashment is allowed on all Allied Aitebar certificates. No termination charges apply. The profit rate for the nearest completed tenor is applied instead of the original tenor rate. Note that for the Express Plus 1 AIIC, rollover is not permitted — funds return to your linked current account at maturity. Pakistan's Islamic banking and finance sector continues to grow, and Allied Bank's Shariah-compliant product range now covers everything from short-term savings certificates to long-term goal-based investment plans. If you are ready to put your savings to work within the boundaries of Islamic finance, you can open an Allied Aitebar account or start investing through ABL Funds entirely online no branch visit required.
Profit rates and expected returns mentioned in this article are indicative and subject to change in line with market conditions and State Bank of Pakistan guidelines. All investment decisions should be made after reviewing the relevant offering documents and, where appropriate, consulting a qualified investment advisor. Past performance is not a guarantee of future results.