Fatwaa ID: 757
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
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
08/09/1444 AH – 03/01/2023 CE | AMG1-2858
وصل اللهم وسلم وبارك على سيدنا محمد وعلى ءاله وصحبه أجمعين
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