What is the difference between the profit distribution ratio and the return ratio that I see in the advertisement?

The profit distribution ratio determines how the profit is divided among the parties, while the advertised return figure may be a historical result, a forecast, or a pricing indicator depending on the product.

Steps

1. Don't confuse the two.

2. Ask the bank: Is this a percentage of the profit or an expected annual percentage rate on the balance?

3. And is it possible that the actual return will be lower?

The figures, fees and limits in this answer vary by bank and change over time — confirm them with your bank or the official source before acting.

Source

• AAOIFI — Sharia Standards