Halal Investment Options Ideas.

In this article, we will discuss what are the various options for Halal investment ideas and options in India (Shariah conformity) and their advantages and disadvantages.

There are mainly four types of investment options  available for Investors in India. Now we will discuss which is Halal investment.

  1. Real Estate.
  2. Share Market.
  3. Gold.
  4. Banking.


Investment in real estate is almost risk free if you get good deals. You will get rental income and for commercial properties it will be more income.


  1. No inflation effect.
  2. Real estate can provide a steady stream of income.
  3. Real estate can provide diversification to your portfolio if you combine it with other asset classes.
  4. Real Estate is trusted by most people and has an emotional value like gold.


1. Real Estate investments can be risky and could even provide negative returns in case of bad deals.

2.  They are highly illiquid. Any time you can transfer into cash.

3. Real estate investments have high transaction and maintenance costs.

4. Capital gains from real estate is taxed at a higher rate than those from equity or equity mutual funds.

5. Gains or losses can be subject to the property selected.

6. Investments in real estate have to be big in size.


Many options are available in share markets as follows.

  1. Equity 
  2. Mutual Funds
  3. Bond
  4. Commodity Trading 
  5. Forex.

According to the Shariah Principle you can only invest in equity and Mutual Funds.


Equity means ownership of that business. Equity will give more returns if you invest for long terms, but for short terms it will be volatile in nature. You can select shariah companies who do not involve banking, insurance,alcohol ,pork ,gambling,tobacco and weapons. 


  1. High risk and high return, you can reduce your risk for long term investing and create good wealths
  2. High Liquidity as compared to other investments.
  3. You will get dividend income .
  4. The return of equity investment is exponential as compared to other investments.


  1. In equity investment there is no guarantee of income from  principles invested. sometimes it will go negative. For short terms the stock can be volatile and give negative returns.
  2. For retail investors it is very difficult to achieve diversification by investing in the stock market. It will take time to learn about diversification.
  3. The costs of transaction and taxes are borne directly by the investor.


Mutual funds are the safest investment in the share market, especially for new investors who want to learn and create their wealth slowly.

In indian market there are only three funds that comply with sharia principles.

  1. Tata Ethical Fund
  2. Taurus Ethical Fund
  3. Reliance Shariah Bees ETF Fund.

Advantage .

  • The Lowest risk as compared to equity stock.
  • In the long term you can create more wealth due to compounding effects.
  • No tension for share trading, all this managed by the Fund manager.
  • You can invest through a systematic investment plan.
  • Start investing without a Demat Account.


  • Low return as compared to equity.
  • It will take more time to make good wealth.
  • You can start with a minimum 5000 RS initially and later 500 RS.


A bond is a fixed income source that represents a loan made by an investor to a borrower (typically corporate or governmental). Bonds are used by companies, municipalities, states, and sovereign governments to finance projects and operations. Owners of bonds are debtholders, or creditors, of the issuer. 

  • Bonds do not comply with sharia principles,therefore investing in bonds is prohibited.
  • Bonds are units of corporate debt issued by companies and securitized as tradable assets.
  • A bond is referred to as a fixed income instrument since bonds traditionally paid a fixed interest rate (coupon) to debtholders. Variable or floating interest rates are also now quite common.
  • Bond prices are inversely correlated with interest rates: when rates go up, bond prices fall and vice-versa.
  • Bonds have maturity dates at which point the principal amount must be paid back in full or risk default.


Commodity trading is the buying and selling of a large range of products including oil and gas, metals such as gold and silver and soft commodities like cocoa, coffee, wheat and sugar.

In the principles of shariah for trading of any goods or product it must be physical ownership.  It means whatever you buy ,you will be the owner of that goods and must be present in physical form. Then you can sell to others .

But in share market we can not get in physical form that why it is not permissible in Islam.


Forex trading means currency trading , like dollar,Euro,ponds ….and Indian rupees.

This is also not allowed in islam.

I hope you will learn about investment options in India and which one is compliant with shariah principles.

Wish you best for your investment journey.

Jazakallah Khair.

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