Term deposits are where Islamic banks reward commitment. Lock your money for a tenor and you get a higher weightage in the Mudarabah pool, often a better profit-sharing ratio too, and the declared rates show it: in mid-2026 the gap between a savings account and the best certificate at the same institution ran anywhere from one to four percentage points. Here is the market, product by product, with every rate dated.
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How an Islamic term deposit differs from a fixed deposit
A conventional fixed deposit promises a rate. An Islamic term deposit assigns you a higher share of a real investment pool. The structure is the same Mudarabah as a savings account, but term money carries larger weightages, and at some banks a better split: BankIslami's term deposit pool divides profit 70:30 in the customer's favour, against 50:50 in its general savings pool. Rates on the certificates are still declared from actual results, monthly or at maturity, and premature withdrawal follows a published schedule rather than a simple penalty.
Bank certificates: the mid-2026 picture
Meezan Bank's Certificate of Islamic Investment (COII) runs from 3 months to 1.5 years with a Rs 50,000 minimum. July 2026 declared rates: 7.05% at 3 and 6 months, 9.01% on the 1-year with monthly payout, 9.53% at 1-year maturity, and 10.05% on the 1.5-year monthly option. BankIslami's June 2026 sheet showed its bookable 1-year Islami Super Mahana Munafa TDR at 8.5057% with monthly payout, 5-year deposits at 9.19-10.27%, and a 10-year monthly-payout product at 10.87%. HBL Islamic's Al-Samarat certificates paid 6.62% at 1 month up to 8.14% at 5 years (June 2026, maturity payout). Bank Alfalah's branch TDRs paid 7.01-7.40% while its digital-only Alfa Islamic TDR paid 8.41-8.97%, a clear premium for booking in the app.
Bank of Khyber runs the most detailed certificate ladder in the market. June 2026 declarations: Riba Free Certificates from 7.51% (6-month) to 8.71-8.82% (5-year), with a special 9.00% five-year tier for widows and orphans; Khyber Islamic Investment Certificates at 8.51-10.08% by tenor, with the KIIC-2 one-year at 10.81%; and RFSC-II certificates paying up to 11.17% at 12 months. NRSP's Behtreen Amdan Certificates, from Pakistan's first regulated Islamic microfinance bank, paid 8.44% up to 12.05% for the 3-year held to maturity (June 2026). Raqami, the new Islamic digital bank, paid 10.00% on a 7-day deposit up to 11.50% on one year (June 2026), the highest short-tenor rates published anywhere in the market that month.
Watch the shape of the curve
Longer is not always better in 2026. HabibMetro Sirat's June 2026 certificate sheet is inverted: the 1-year at maturity paid 7.91% while the 5-year paid 6.71-6.90%. When a bank prices five-year money a full point below one-year money, it is telling you it expects rates to keep falling and does not want to overpay for long deposits. Meezan and BOK sloped the normal way. Check the specific tenor you want, not the product's headline.
The government alternatives most savers skip
Two Shariah-structured government channels out-yielded most bank certificates in mid-2026. National Savings' Sarwa Islamic Term Accounts (SITA) showed 11.10% for 1 year, 11.50% for 3 years and 11.52% for 5 years on the CDNS ticker dated July 18, 2026, sold through national savings centres under the Sarwa Islamic Savings Account Rules 2019. For overseas Pakistanis, Islamic Naya Pakistan Certificates showed expected PKR rates of 11.75% (3-month) to 12.75% (5-year) on the SBP's table as of August 3, 2026, purchased through a Roshan Digital Account. Both publish expected rather than declared rates, and both have disclosure quirks covered in our dedicated guides, but on raw yield they set the bar bank certificates had to clear and mostly did not.
Early exit rules deserve five minutes
Premature withdrawal on Islamic certificates is not a flat penalty; it is a recalculation. Meezan pays per an approved schedule. INPCs allow no encashment in the first month, remunerate months one to three on actual pool results with a discounted repurchase, and after three months recalculate profit at the weightage of the nearest completed tenor, clawing back higher coupons already paid. If there is a real chance you need the money early, a shorter certificate at a slightly lower rate usually beats a long one broken mid-way. Compare current term deposit declarations on HalalWallet's bank accounts page.
Frequently asked questions
What is the highest Islamic term deposit rate in Pakistan right now?
As of the June-July 2026 declarations: NRSP's 3-year Behtreen Amdan Certificate at maturity paid 12.05%, INPC PKR certificates showed expected rates up to 12.75%, Sarwa SITA paid 11.50-11.52% on 3-5 years, BOK's RFSC-II 12-month paid 11.17%, and Raqami's 1-year paid 11.50%. All of these are dated figures that change with market conditions.
Is a COII the same as a fixed deposit?
Functionally similar, contractually different. Meezan's Certificate of Islamic Investment is a Mudarabah term deposit: your money takes a high weightage in an investment pool and the rate is declared from actual results. A conventional fixed deposit is a loan to the bank at a promised interest rate, which is riba.
Monthly payout or maturity payout: which pays more?
Maturity payout almost always declares higher, because your profit stays in the pool longer. Meezan's July 2026 one-year COII paid 9.01% monthly versus 9.53% at maturity; HBL's Al-Samarat monthly variants paid roughly 0.4 points less than maturity equivalents. Take monthly payout only if you need the income.
Are these certificates protected if the bank fails?
Islamic banks participate in Pakistan's deposit protection arrangements like conventional banks, and Sarwa and INPC are obligations of government-linked structures. But Mudarabah profit is never guaranteed, and a distressed institution is a real risk factor; Bank Makramah's 2025 accounts are the reminder. Prefer institutions whose financials you have at least glanced at.
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Can I break an Islamic term deposit early?
Yes, under published rules. Expect profit to be recalculated at a lower weightage for the period you actually held, sometimes with clawback of coupons already paid, as INPC's redemption rules spell out. Read the premature encashment schedule before booking, not after.