Fatwaa ID: 757
Question:
Bismillah
Assalamualaikum
Dear muftian kiraam
What is ruling on opening a College 529 account?
If permissible, would zakaat also be due on the amount in the account?
Ajeeboo wa tujaroo
Answer:
In the Name of Allaah, the Most Gracious, the Most Merciful.
As-salaamu ‘alaykum wa-rahmatullaahi wa-barakaatuh.
- An investor or contributor in a voluntary 529 college plan does not have the ability to choose the specific avenue of investment. Thus, his funds are invested in Shari’ah non-compliant avenues. Accordingly, it will not be permissible to open or contribute in a 529 college plan.
- If one has already invested in a 529 college plan, then he MUST withdraw the funds with immediate effect. It is not permissible for him to remain in such an investment. If his zakaah date comes in the interim, then his investments will be subject to zakaah. The zakaah will be on the investor, not the student. Istighfaar and tawbah must be made.
And Allaah Ta’aala knows best.
Mufti Muajul I. Chowdhury
Darul Iftaa New York
https://askthemufti.us/
08/09/1444 AH – 03/01/2023 CE | AMG1-2858
وصل اللهم وسلم وبارك على سيدنا محمد وعلى ءاله وصحبه أجمعين
__________________
Disclaimer
Darul Iftaa New York answers questions on issues pertaining to Shari’ah. These questions and answers are placed for public view on askthemufti.us for educational purposes. The rulings given here are based on the questions posed and should be read in conjunction with the questions. Many answers are unique to a particular scenario and cannot be taken as a basis to establish a ruling in another situation.
Darul Iftaa New York bears no responsibility with regard to its answers being used out of their intended contexts, nor with regard to any loss or damage that may be caused by acting on its answers or not doing so.
References and links to other websites should not be taken as an endorsement of all contents of those websites.
Answers may not be used as evidence in any court of law without prior written consent of Darul Iftaa New York.