What’s an RRSP?

A Registered Retirement Savings Plan (RRSP) is a retirement account introduced by the government to help Canadians save for retirement. The main benefit of RRSPs is that contributions are tax deductible..

Benefits of an RRSP

  1. Contributions are tax-deductible. You may claim your RRSP contributions as a deduction on your tax return.
  2. Savings grow tax-free. You can expect your RRSP contributions to grow anywhere between 4% to 8% long term, and with Manzil, it’s also 100% Halal.
  3. Convert to monthly payments when you retire. You will pay tax on your payments, but taxes will be lower as you are more likely to be in a lower tax bracket.

RRSP contribution hard deadline

The official deadline to contribute to your RRSP for the 2020 tax year is Monday, March 1st, 2021. So mark your calendars for that date.

How much money can I contribute to my RRSP before March 1st?

For 2020, any Canadian under 71 is free to contribute as much as 18% of their prior year’s income, up to a maximum of $27,230. You can find out more details about your RRSP contribution room or deduction limit here or calculate your own on the CRA website. 

So, now that we got the basics out of the way, here’s what you need to do to benefit from Manzil’s Halal RRSPs! Yup, you read that right. We’ve Halalified RRSPs. Here’s a virtual High-5 (High but humble) right back at you!

So, how does the halal piece work?

The RRSP is just an account with some tax rules around it. It is how the money deposited into this account gets invested that will make it Halal or not. If the money is invested in Halal Shariah-compliant investments, then it’s Halal. If not, then it’s not. Almost all traditional RRSPs are not Halal. With Manzil, however, that’s no longer a concern, and you can sleep peacefully at night knowing that your money is being invested in our Halal Portfolios.

What am I investing in when I invest in Manzil’s Halal Portfolios?

Manzil’s Halal Portfolios are diversified and made up of two types of Halal investments:

  1. An Income Fund that invests in real estate to provide Muslims across Canada with Halal home financing. You benefit yourself and other Muslims as well. You reap your financial rewards in this life (not to mention the Barakah factor), and Allah willing, plenty of rewards in the hereafter. This fund is wholly owned and operated by Manzil.
  2. An Equity Fund that invests in a portfolio of carefully selected Shariah-compliant stocks. This ETF is owned by Wahed Invest and is listed on the NASDAQ. Manzil partnered with Wahed to offer Canadians access to this fund. This ETF is currently only accessible in Canada through Manzil’s Halal Portfolios. Click here to learn more about Wahed’s Halal ETF.

General characteristics of an Income investment fund:

  1. Lower returns
  2. Lower risk
  3. More stable in poor economic conditions

General characteristics of an Equity (stocks) investment fund:

  1. Higher returns
  2. Higher risk
  3. Highly volatile in poor economic conditions

Just to clarify

Compared to other income-based investments with similar risk and asset classes worldwide, Manzil provides you with the most Halal bang for your buck. A diversified portfolio that includes both income-based and equity investments, like Manzil’s Halal Portfolios, is usually the best way to go.  

What are Manzil’s Halal Portfolios?

We put together four halal diversified portfolios to maximize your return on investment and provide you with four options so you can find the most suitable portfolio for your risk-appetite. Some of these portfolios will generate a higher return in the long run but are at higher risk, while others provide lower returns with lower risk. It all boils down to your preference. We find that younger investors tend to lean towards the higher risk portfolios, while older investors prefer safer investments. All that being said, it’s all up to you in the end. Here’s a list of the four portfolios we offer:

  1. Manzil Income Fund: 100%

    1. 100% of your money is invested in Manzil’s Income Fund
    2. Suitable for very low-risk investors
  2. Manzil Conservative: 75% / 25%

    1. 75% of your money is invested in Manzil’s Income Fund, 25% in Wahed’s Equity Fund
    2. Suitable for low-risk investors
  3. Manzil Balanced: 50% / 50%

    1. 50% of your money is invested in Manzil’s Income Fund, 50% in Wahed’s Equity Fund
    2. Suitable for moderate-risk investors
  4. Manzil Growth: 25% / 75%

    1. 25% of your money is invested in Manzil’s Income Fund, 75% in Wahed’s Equity Fund
    2. Suitable for higher-risk investors

When did you launch Manzil’s Halal Portfolios, and how well did it perform to date?

The Manzil Halal Portfolios were launched in January 2020, and we have seen overwhelming demand for our products with tremendous growth in the past 12 months. Even during the pandemic, Manzil Halal Portfolios had consistent inflows month over month. Alhamdulillah, both funds have out-performed their respective benchmarks. To view Wahed’s performance, please click here. To learn more about Manzil’s Income Fund performance, please click here (you will need to request access when prompted).

Back to halal RRSPs

Now that you know what your money’s being invested in, the rest is pretty straight forward. You can open a  Halal RRSP with Manzil (or transfer an existing RRSP to Manzil), select one of Manzil’s Halal Portfolios above, and you’re good to go. Click here to open or transfer your existing RRSP to Manzil (through our partner, CI Direct Investing) now inshā Allah.

So you say it’s Halal, but how Halal is it? Really?

Well, if Manzil says it’s Halal, it’s Halal! Okay, wait, you might not be there quite yet, so let’s take a few steps back. When we started Manzil, we established a few ground rules. One of those rules was the Halal piece. We didn’t want anyone to have to second-guess or have any doubts about the Halal-factor of any of our products. So how did we go about doing that?

AAOIFI, the gold-standard of Islamic finance

AAOIFI (Accounting and Auditing Organization for Islamic Financial Institutions), based in Bahrain, is the leading international not-for-profit organization primarily responsible for the development and issuance of standards for the global Islamic finance industry. It has issued a total of 100 standards in the areas of Shari’ah, accounting, auditing, ethics, and governance to be followed by Islamic Financial Institutions. AAOIFI includes scholarly opinions from several Muslim schools of thought and is generally considered to be the gold standard for Islamic finance rules. Eighteen countries have adopted AAOIFI standards for their Islamic finance industries. Many banks, investment firms, capital market institutions, auditing firms, and training institutions also follow AAOIFI standards. 

That being said, it was a no-brainer for us. We decided that we had to adhere to all AAOIFI standards, so we hired IFAAS, the world-renowned Islamic finance advisory firm, to ensure and certify that we meet AAOIFI standards. IFAAS’s team reviewed all our documents, processes and procedures and found them to be compliant. So, Alhamdulillah, we became the first Islamic finance company in Canada to receive AAOIFI Shariah compliance certifications. We didn’t stop there. We are now officially Canada’s first AAOIFI associate member. 

Wait, there’s more

We wanted more. We thought, who are some of the strictest scholars in the space of Islamic Finance who can audit our products to determine if they were genuinely Halal or not? After a lot of research, we landed upon Mufti Ebrahim Desai of Darul Iftaa Mahmudiyyah in S. Africa. We noticed that Mufti Ebrahim Desai was yet to deem any Islamic Home Financing product in Canada halal, so we decided to approach him. Alhamdulillah, on August 13th, 2020, Darul Iftaa Mahmudiyyah issued an official Shariah compliance certificate for Manzil’s home financing Murabaha solution.

Okay, okay, I’m sold, but how do I open or transfer my existing RRSP to Manzil?

We partnered with the very best, CI Direct Investing (formerly WeathBar), to facilitate your investments into Manzil’s Halal Portfolios. CI Direct is part of CI Financial, one of the country’s largest investment companies, trusted by Canadians since 1965. CI Direct simply facilitates your investment into our Halal Portfolios and helps you track your investments and get comprehensive insights. It’s probably worth noting here that utilizing CI Direct to facilitate your investments into our Halal Portfolios does not affect the Shariah compliance of your investment nor our portfolios. You can learn more about this point here on CI Direct’s support page or watch this video here. Opening your first Halal RRSP or transferring your existing one to Manzil takes only a few minutes. Click here to get started inshā Allah.

More on CI Direct Investing

CI Direct offers low fees and smarter technology (they have an elegant smartphone app) to aid with investing and saving habits. If you have an existing RRSP account with another financial institution, we can help you transfer it to  CI Direct; most if not all transfer fees are covered for account transfers for $25,000 or more.

Manzil’s on a mission to increase the adoption of Halal financial solutions in Canada, and here’s what you can do to help.

Halal financial solutions are not just great for Muslims, but they’re for the benefit of any society at large. Muslim or not. Traditional banks are in the business of maximizing profits while minimizing risk. Profits always come first, even at the expense of people or even the economy as a whole. This is predatory finance. On the other hand, Islamic finance puts the benefit of people before profit and shares the risk while providing asset-backed transactions since, in Islam, usury is prohibited. In Islam, you can’t make money from lending money. You can make money by working for it (working for someone), undertaking trading activities, entrepreneurship, Halal investments and any permissible activity. This is what we call participatory finance, and it’s God’s gift to humanity, but not enough people are aware of it. Most people think of Shariah-compliance as limited to a list of Halal and Haram bullet points (no one was harmed using these bullets) or a checklist of Islamically permissible and non-permissible items. There’s truth to that, of course, but Shariah is way more than that. Shariah means a pathway to water, and water is a symbol of life. There’s a subtle indication here of how Shariah-compliant solutions can bring societies to life. In other words, the adoption of Halal solutions is suitable and beneficial for any community. We need your help to generate awareness for the availability of these solutions in Canada. To create adequate awareness and understanding of these solutions, we need to grow and gain mass adoption. So without any further delay, here’s what you can do to help today. 

Steps you can take today to support this noble mission

  1. Open a Halal RRSP with Manzil today. If you already have one, transfer your existing RRSP to Manzil. To do so, start by opening a Halal RRSP account and then you’ll see the transfer account option .
  2. Transfer all of your other existing registered accounts to Manzil as well. This includes RESPs, TFSAs, LIRAs, and any other registered accounts. Here’s a video you can watch (this video was created before CI Direct acquired WealthBar, so you will see WealthBar branding instead of CI Direct branding. Don’t let that confuse you. It’s the same thing) to help you transfer your existing accounts once you create an account with CI Direct.
  3. Tell your friends, family, and colleagues about Manzil and encourage them to invest in Manzil’s Halal Portfolios.
  4. Apply for Manzil’s Halal prepaid Visa card that it’s offering through its partner, KOHO.
  5. Keep us in your prayers.

Finally, if you have any questions or inquiries regarding our Halal RRSPs or any other products, you can use this link to book an appointment with one of our financial advisors. 

Jazakum Allah Khairan.