---
title: "What is Wadiah? | IslamicOpenFinance™"
description: "Safekeeping: an asset placed with a custodian to be kept and returned on demand."
url: https://islamicopenfinance.com/glossary/wadiah/
lang: en-GB
source: "IslamicOpenFinance"
---

[Glossary](https://islamicopenfinance.com/glossary/) / [Deposits and accounts](https://islamicopenfinance.com/glossary/#accounts)

Deposits and accounts

# Wadiah

Safekeeping: an asset placed with a custodian to be kept and returned on demand.

Wadiah is a contract in which an asset is placed with another party for safekeeping. Bank Negara Malaysia's policy document describes its inherent nature as trusteeship, so the custodian is liable only for loss caused by misconduct, negligence or breach of terms. The same document provides that where the asset is money and the custodian is allowed to use it, the contract is construed as a qard, a loan, and governed by the rules of qard.

## Sources

- [Bank Negara Malaysia, Wadi\`ah policy document, 2016: nature of wadi\`ah; construed as qard upon utilisation](https://www.bnm.gov.my/documents/20124/938039/Wadiah_PD.pdf)

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

[**Wadiah yad amanah** Safekeeping on trust: the custodian holds the asset without using it and is liable only for negligence or misconduct.](https://islamicopenfinance.com/glossary/wadiah-yad-amanah/) [**Qard** A loan of money to be repaid in an equivalent amount; any benefit stipulated for the lender is riba.](https://islamicopenfinance.com/glossary/qard/) [**Hibah** A gift: a transfer of ownership without consideration, sometimes paid by banks at their discretion to account holders.](https://islamicopenfinance.com/glossary/hibah/) [**Islamic deposit** A deposit product whose principal the Islamic bank is obliged to repay, as distinct from an investment account that shares risk.](https://islamicopenfinance.com/glossary/islamic-deposit/)

**Deposits and accounts**

1. [Qard](https://islamicopenfinance.com/glossary/qard/)
2. [Hibah](https://islamicopenfinance.com/glossary/hibah/)
3. [Islamic deposit](https://islamicopenfinance.com/glossary/islamic-deposit/)
4. [Profit-sharing investment account (PSIA)](https://islamicopenfinance.com/glossary/profit-sharing-investment-account/)
5. [Unrestricted investment account](https://islamicopenfinance.com/glossary/unrestricted-investment-account/)
6. [Restricted investment account](https://islamicopenfinance.com/glossary/restricted-investment-account/)
7. [Investment account holder](https://islamicopenfinance.com/glossary/investment-account-holder/)
8. [Wadiah yad amanah](https://islamicopenfinance.com/glossary/wadiah-yad-amanah/)

[All 221 terms](https://islamicopenfinance.com/glossary/)