Halal Investing & Pension (EPF): Screening Guide

1. 1Screen every stock on five AAOIFI checks; re-screen quarterly.
2. 2Purify haram dividend fractions; pay zakat via our calculator.
3. 3Switch EPF/pension to Shariah options; purify accrued interest yearly.
4. 4Avoid margin, annuities and voluntary interest tiers entirely.
5. 5Run an annual money-hygiene day: screens, purification, zakat, wasiyyah.

Stock screening in five checks

AAOIFI-style screening runs five checks: business activity (no alcohol, gambling, conventional finance, pork, adult entertainment as core income), interest-bearing debt below ~30-33% of market cap, interest income below ~5% of revenue, illiquid assets above minimum ratios, and haram revenue (all sources) below ~5%. Pass all five and the stock is investable; fail one and it is out - “everyone buys it” never overrules a screen. Free screeners automate the math; re-screen quarterly because debt ratios drift.

Then purify: donate the haram-revenue fraction of every dividend to public benefit without reward-intent (purification, not charity), and pay 2.5% zakat on zakatable value via our investment-zakat calculator. Prefer real-business long horizons over speculation: our crypto-forex guide’s leverage line applies here - margin stock trading is the same riba-gharar structure in a different suit.

EPF, pensions, and the employee’s purification

Provident funds (EPF-style) and pensions split into three parts: your contribution (yours, halal), employer contribution (yours by contract, halal), and interest accrued (riba - purify by giving away without reward-intent). Where the scheme offers Shariah-compliant fund options, switch immediately; where it is compulsory with no halal window, participate minimally, purify the interest yearly, and document the compulsion for your scholar. Voluntary top-ups into interest-bearing tiers are never “necessary” - direct them to halal funds instead.

Retirees and near-retirees: annuities guaranteeing interest-based payouts fail like conventional insurance (our takaful guide); prefer halal income assets (rental property, sukuk, dividend portfolios screened) plus family nafaqah planning via our nafaqah-planner. Annual money-hygiene day: screen holdings, purify dividends and interest, pay zakat, review the wasiyyah - wealth this organised funds Hajj, charity and quiet nights alike.