| Deposit Accounts Frequently Asked Questions |
1.) Does the profit sharing account apply to checking? 1.) Does the profit sharing account apply to checking? SHAPE™: Checking accounts are not profit sharing for a number of reasons including their distinct nature compared to other forms of deposit. However, your checking account funds are used specifically to help fund UIFC’s Shariah’a compliant investments. back to top 2.) Can the profit sharing account go to a zero or negative balance? SHAPE™: No. Deposit account regulation, as currently interpreted by the FDIC, insured consumer deposits cannot lose capital, let alone go to zero. But, if there is no profit, then there will not be any earning on the account. back to top 3.) Is the SHAPE™ Profit Sharing Money Market Account liquid? SHAPE™: Under banking regulations, a licensed FDIC bank like University Bank offering a money market account must agree to redeem part or all of any such account to the depositor upon demand. It is completely liquid under the concept of continuing Mudaraba. back to top 4.) What does the SHAPE™ Profit Sharing Money Market Account invest in? The SHAPE™ Profit Sharing Money Market Account and specially designated interest free checking accounts (available upon request) at University Bank invest only in the SHAPE™ Redeemable Lease program and other eligible Islamic instruments of UIFC. back to top 5.) What is in it for University Bank and UIFC to offer these riba-free deposits? SHAPE™: University Bank has a distinguished history of serving its community and meeting the varied needs of diverse consumers, helping them to access safe and sound banking products and services at a fair price. By doing so, University Bank hopes to grow its profits and serve the community at the same time. back to top 6.) If this is an Islamic program, why must there be FDIC insurance? SHAPE™: Under current FDIC rules, all consumer deposits less than $250,000 must be insured against capital loss. back to top 7.) What happens if I draw my SHAPE™ Money Market account to less than $500? At University Bank, you may draw your account down to close to zero. Below $500 you pay a $2.00 monthly service charge. But, your principal deposit decrease below the deposited amount should the performance of the Islamic portfolio become negative and start losing money. back to top |
