Unrestricted investment account
An investment account whose funds the bank may invest at its discretion and commingle with its own in a pooled portfolio.
Unrestricted investment accounts are accounts whose holders authorise the bank to invest their funds, on the basis of mudarabah, without imposing restrictions. Under the IFSB definition, the institution can commingle these funds with its own and invest them in a pooled portfolio. Holders share in the pool's results, and their returns can be affected by reserves such as the profit equalisation reserve.
Sources
This entry explains a term; it is not a Shariah ruling. Approving a product is for each institution's own Shariah board and regulator.
Related terms
Restricted investment accountAn investment account whose holder limits where, how or for what purpose the bank may invest the funds.Unrestricted mudarabahA mudarabah that leaves the manager free to invest the capital in any permissible business at its discretion.Profit equalisation reserveAn amount set aside from mudarabah income to maintain a level of return for investment account holders and the bank over time.Investment poolA group of assets funded by identified sources, such as shareholders or investment account holders, whose income is allocated to them.