I recently set up an account at bank Mizrahi Tafuhot. The account receives interest. Do you know if this is a problem, or if bank Mizrahi has set up a heter iska in a permissible fashion?
Answer:
Bank Mizrahi does have a heter iska which applies to all interest payments that are made, and the common custom is to rely on the heter with regard to paying and receiving interest.
It is generally more lenient to be on the receiving end of ribbis from a bank, because the money that you invest in a bank is a true iska arrangement, whereby the bank invests the money and uses it for its own profits. This is unlike an overdraft, which is used to pay a person’s bills – hardly a worthy investment.
At the same time, many authorities view banks as being more lenient than individuals with regard to ribbis. Please see here for more details.
The custom, as noted, is to be lenient, and it is fine to follow it.
Best wishes.
