The Peace-of-Mind Portfolio: Why You Still Need a Savings Account—Even When You’re Already Investing
The Peace-of-Mind Portfolio: Why You Still Need a Savings Account—Even When You’re Already Investing
How many times have you been doom-scrolling late at night, only to freeze mid-swipe because the market's tumbling—again—thanks to yet another geopolitical crisis? You grab your phone, open your investment app, and your stomach sinks when you notice that "sure-thing" stock you bet on is suddenly down 10%. If you've been there, you know it’s a tough spot—exactly why we’re firm believers in diversification. And it’s not just us: economist Harry Markowitz earned the Nobel Prize specifically for demonstrating the critical importance of diversification in minimizing risk and stabilizing returns (Nobel Prize, 1990¹).
Investing for growth is essential—no arguments there—but balance matters. Even the best investors keep a cash cushion because life has a way of throwing unexpected curveballs, making liquidity essential. Yet for Muslims in America, building that savings buffer poses unique challenges: conventional savings accounts, with their attractive yields and simple accessibility, inevitably come loaded with riba (interest), a clear ethical no-go in Islamic finance.
That’s why Wahed created the Everyday Shariah Account: a savings alternative offering ease-of-use, stability, and halal returns—without the pitfalls of conventional banking.
1. Saving ≠ Investing—And Why That Distinction Matters
Think of saving as the sturdy umbrella by your door—always within reach when storm clouds gather. It provides safety and immediate peace of mind during financial uncertainty. Investing, however, is more like a cross-country road trip, filled with exciting opportunities but inevitably marked by bumps and detours.
These two approaches serve very different purposes. Savings prioritize preservation and quick access, shielding you from short-term financial shocks. Investing, on the other hand, seeks growth by accepting calculated risks. This distinction is crucial. Mohsin Patel from Islamic Finance Guru puts it plainly: “Before you even glance at the markets, build an emergency fund of at least one month’s essential outgoings.”² Keeping saving and investing clearly separate ensures your long-term goals—retirement, education, even your future Hajj—stay protected from immediate setbacks, helping you avoid panic-selling when markets dip.
2. Most Americans Lack a Financial Safety Net
In 2025, 59% of Americans reported they couldn't cover a $1,000 emergency expense from savings, highlighting a widespread lack of financial preparedness3. This financial vulnerability often leads individuals to rely on high-interest credit cards, exacerbating debt and financial instability.
Building a dedicated emergency fund—ideally covering three to six months of essential expenses—can provide a crucial buffer against unexpected financial shocks. Such a fund not only offers peace of mind but also prevents the need to liquidate long-term investments during market downturns or personal emergencies.
For Muslim Americans, establishing an emergency fund in a Shariah-compliant, interest-free account ensures alignment with Islamic financial principles while safeguarding against unforeseen expenses.
3. Meet the Everyday Shariah Account: Calm, Consistent, and Halal
Traditional bank accounts hand you pennies of interest (more on that haram wrinkle in a second). Riskier assets hand you roller-coaster returns. The Everyday Shariah Account lives in the productive middle:
- Designed for Preservation: ESA is built for stability. It aims to give you consistent, halal returns—without exposing your savings to the wild ups and downs of typical investments. That way, your money is still working for you, but without keeping you up at night.
- Seeking competitve returns on par with the highest return rates on high yield savings accounts nationwide*
- Accessible Funds - Your funds are always within reach and will be deposited into your linked bank account just a few days after you make a withdrawal request.
In short, ESA behaves like a savings tool, not a moon-shot.
4. Why Conventional Savings Accounts Fall Short for Muslims
Saving is a commendable practice in Islam, but the method of earning on those savings matters. Traditional bank accounts often accrue interest (riba), which is prohibited in Islam. The Qur'an explicitly states:
"Allah has permitted trade and has forbidden interest."
— Surah Al-Baqarah 2:275
This verse underscores the distinction between permissible trade and forbidden interest, highlighting the importance of engaging in financial activities that involve real economic transactions and shared risk.
For many Muslims, this presents a dilemma: accept interest-bearing accounts or risk their savings in volatile investments. The Everyday Shariah Account (ESA) offers a Shariah-compliant alternative, providing a way to grow savings through halal means, overseen by an independent Shariah Review Board. This ensures that your financial practices align with your spiritual values, offering both peace of mind and financial growth.
5. Short-Term Goals Need a Different Tool
Not every financial goal is suited for long-term investment strategies. Some—like saving for a wedding, Hajj, or a new car—are short-term and require a different approach. Using investment accounts for these goals can expose your savings to market volatility, potentially jeopardizing your plans.
Financial experts emphasize the importance of aligning your savings strategy with your time horizon. For short-term goals, prioritizing liquidity and capital preservation is key. This ensures that funds are readily available when needed without the risk of significant value changes.
By choosing the appropriate financial tools for your short-term objectives, you can safeguard your savings and achieve your goals without unnecessary risk.
6. Liquidity—On Your Terms
Your ESA balance is never locked away. Most withdrawals settle to your linked bank in one to two business days—about as fast as cashing out of a money-market fund, and miles ahead of CDs or retirement plans with penalties. No early-exit fees, no teaser-rate gimmicks.
7. A ‘Savings-Mindset’ With a Profit-First Twist
The national average savings yield is just 0.63 % APY as of November 20254 bankrate.com. The everyday Shariah account seeks returns that are on par with the nation's best high yield savings accounts*. This means your emergency fund could grow roughly six-times faster—all while staying riba-free. (Naturally, returns vary and principal isn’t guaranteed; see disclaimer at the bottom.)
8. How ESA Stacks Up Against an Investment Account
Saving and investing are built for different terrains. One keeps you grounded and dry when life throws a storm your way; the other helps you journey toward long-term destinations. The ESA is built for that immediate reach—for the moments you need stability, clarity, and quick access. Paired with a long-term investment account, you’re not choosing one over the other—you’re equipping yourself for both the road ahead and whatever weather might hit along the way.
9. Build Your Safety Net—With Clarity and Conviction
You shouldn't have to choose between smart financial planning and your values. A halal savings cushion offers both: practical peace of mind and spiritual clarity. It keeps your goals protected, your funds accessible, and your principles intact.
Start saving with purpose—no riba, no compromise.Open an Everyday Shariah Account.
Sources:
- Nobel Prize. (1990). Harry M. Markowitz – Facts – NobelPrize.org. Retrieved from https://www.nobelprize.org/prizes/economic-sciences/1990/markowitz/facts/
- Islamic Finance Guru. "The Muslim Money Flowchart." Retrieved from https://www.islamicfinanceguru.com/articles/personal-finance/the-muslim-money-flowchart
- CBS News. "Most Americans can't afford a $1,000 emergency expense, report finds." January 23, 2025. https://www.cbsnews.com/news/saving-money-emergency-expenses-2025/
- Average savings rates - https://www.bankrate.com/banking/savings/average-savings-interest-rates
Disclaimer:
*https://www.bankrate.com/banking/savings/best-high-yield-interests-savings-accounts/
The Everyday Shariah Account is a WRAP investment account managed by Wahed Invest LLC, a US SEC registered investment advisor. Any returns generated in the past do not guarantee future returns. All securities involve some risk and may result in loss. There is no assurance any investment will achieve its objectives or returns. This content is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. The term halal denotes that it is permitted and follows Islamic law.
Risk Warning: Equity investments are not readily realisable and involve risks, including loss of capital, illiquidity, lack of dividends and dilution, and it should be done only as part of a diversified portfolio. Investments of this type are only for investors who understand these risks. You will only be able to invest in the company once you have met our conditions for becoming a registered member.
Please visit www.wahed.com/uk/ventures/risk for our full risk warning.
Risk Warning: As with any investment, a Wahed Invest Ltd investment puts your money at risk, as the value of your investment can go down as well as up. The tax treatment of your investment will depend on your individual circumstances and may change in the future. If you are unsure about whether investing is right for you, please seek expert financial advice.
Please visit www.wahed.com for our full terms and conditions
Maydan Capital Limited, trading as WahedX, is registered in England and Wales (Company No. 13451691), registered office: 87-89 Baker Street, London, W1U 6RJ, UK. Maydan Capital Ltd (FRN: 963613) is an appointed representative of Wahed Invest Ltd (FRN: 833225), an authorised and regulated firm by the Financial Conduct Authority.Wahed Invest Ltd. is registered in England and Wales (Company No. 10829012), registered office: 87-89 Baker Street, London, W1U 6RJ, UK and is authorised and regulated by the Financial Conduct Authority: FRN 833225.
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As with any investment, a Wahed Invest Ltd investment puts your money at risk, as the value of your investment can go down as well as up. The tax treatment of your investment will depend on your individual circumstances and may change in the future. If you are unsure about whether investing is right for you, please seek expert financial advice.
Wahed Invest LLC (Wahed) is a US Securities and Exchange Commission (SEC) registered investment advisor. Wahed Invest provides brokerage services to its clients through its brokerage partner Apex Clearing Corporation, a member of NYSE - FINRA - SIPC and regulated by the SEC and the Commodity Futures Trading Commission. Registration does not imply a certain level of skill or training. Wahed does not intend to offer or solicit anyone to buy or sell securities in jurisdictions where Wahed is not registered or a region where an investment practice like this would be contrary to the laws or regulations. Any returns generated in the past do not guarantee future returns. All securities involve some risk and may result in loss. Any performance displayed in the advertisements or graphics on this site are for illustrative performances only.
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