This "Contribution" is exactly Riba
Question :
One of the banks made an offer to those responsible for a students' savings fund to keep the money of the students' savings fund in return for what the bank calls a "contribution". This is an expression for a sum of money that is given (by the bank) without any act in return other than keeping the money in the bank. The bank in return uses this money (i.e., the students' savings fund money) and invests it. Therefore, is it permissible to deposit the sum of money into that bank?
Answer:
This act is not permissible, because it is exactly Riba. The reality of it is that the bank uses the money of the fund for a specified amount of interest that it gives to the fund. The bank has only called it a "contribution" as a means of deception and treachery and as a cover-up for Riba. Riba is Riba, regardless of what the people may call it. And Allâh is the One Who is requested for help.
Source:
Ash-Shaykh Ibn Baz
Fatawa Islamiyah, Vol. 3 Page 386
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