Meezan Certificate of Islamic Investment (2026): COII Rates and Early Encashment

The Certificate of Islamic Investment, or COII, is Meezan Bank's main Mudarabah term deposit. You invest at least Rs 50,000 for 3 months, 6 months, 1 year or 1.5 years, choose profit monthly or at maturity, and receive the rate the bank declares after each month from its deposit pool. For the month ended 30 September 2026 the declared rates were 7.12% at 3 and 6 months, 9.18% at 1 year with monthly profit, 9.56% at 1 year paid at maturity, 9.56% on the senior citizens' 1-year monthly variant and 10.12% at 1.5 years. The 2, 3 and 5-year COIIs are discontinued for new bookings. Break a certificate early and you are paid at the rate of the shorter product you actually held, which the schedule below spells out.

What a COII is and how it differs from a fixed deposit

A conventional fixed deposit is a loan to the bank at a rate fixed on day one. A COII is a Mudarabah: your Rs 50,000 or more joins Meezan's deposit pool as Rab-ul-Maal capital, the bank manages it as Mudarib, and the profit is whatever the pool's financing and sukuk actually earned, split by a ratio and weightages announced before the month starts. The product page says the ratio and weightages are published three days before each month and cannot change during it, that profit is calculated and announced within seven days after the month ends, and that a loss would be borne by depositors in proportion to their investment. The State Bank's Deposit Protection Corporation guarantees up to Rs 1,000,000 per depositor per bank, which the Meezan key fact statement confirms applies to term deposits as well.

That after-the-fact declaration is the single most important thing to understand before comparing a COII with anything else. The rate you see on the sheet is last month's result, not next year's promise. Over a 1-year certificate you will be paid twelve different monthly rates, each tied to the pool's performance and, in practice, to the policy rate the State Bank held at 11.5% on 14 September 2026. Our Islamic term deposits survey compares certificates across banks; this page is the cost sheet for Meezan's own, with the Meezan Bank profile carrying our overall verdict.

Tenors, minimums and payout options as published

The product page lists four live tenors and two payout options, monthly or at maturity. The key fact statement for Islamic term deposits dated 5 October 2026 and the rate sheet dated 2 October 2026 fill in the detail. Quarterly payout, which older certificates offered, no longer appears on any live product.

Three things stand out. The 3 and 6-month certificates pay no more than the one-month certificate, so there is no reward for locking up money for under a year. The jump comes at one year, and the maturity option pays 0.38 percentage points more than the monthly option because the bank keeps the use of the profit for longer. The 1.5-year monthly certificate is now the highest-paying rupee product on Meezan's retail sheet apart from the senior citizens' Meezan Aamdan Certificates at 5.5 and 7 years, which paid 10.12% for September. The senior 1-year certificate paid at maturity is marked temporarily discontinued.

How weightages and the pool produce the declared rate

Meezan publishes a consolidated weightages sheet every month alongside the rate sheet. For October 2026 the bank's share as Mudarib on its main pool is 50% and the customers' share is 50%, unchanged from August and September. Within the customers' half, each product carries a weightage: 0.30 for the standard savings account up to Rs 10 million, 0.38 for the 1-month, 3-month and 6-month certificates, 0.49 for the 1-year monthly COII, 0.51 for the 1-year maturity and senior monthly COII, and 0.54 for the 1.5-year certificate. The pool's distributable profit for the month is divided across all balances multiplied by their weightages, so a 1.5-year certificate earns 1.8 times what the same rupee earns in a savings account from the same pool result.

The practical consequence is that a change in the bank's share or in your product's weightage changes your rate even if the pool earned the same. Meezan has held the 50:50 split for the three months published, and the COII weightages moved by at most 0.01 between August and October. If you want to track whether your certificate is being treated fairly, compare the weightage on each new sheet with the one you booked under; the bank's rule is that it cannot change mid-month, but it can change between months. The bank accounts hub explains the same system across other banks.

Premature encashment: the published rule and a worked example

Meezan's Premature Encashment Schedule for Islamic term deposits, effective 1 September 2025, does not impose a penalty in the conventional sense. Instead it reassigns your money to the product whose tenor you actually completed, and pays profit at that product's weightage and monthly rate for the period held. For every COII, encashment within the first three months is paid at the Monthly Mudarabah Certificate rate; between three and six months at the COII 3-month rate; between six months and one year at the COII 6-month rate; and between one and 1.5 years at the 1-year COII monthly rate. The schedule notes it is subject to revision and that the version in force on the day you break the certificate applies.

Take Rs 1,000,000 placed in a 1-year COII with profit at maturity and assume, for illustration only, that every month's declared rates stayed at the September 2026 levels. Held to maturity, the certificate would pay about Rs 95,600 before tax at 9.56%. Broken after eight months, the money is treated as a 6-month COII at 7.12% for the eight months held, roughly Rs 47,500, instead of the Rs 63,700 that eight months at 9.56% would have produced. Broken after two months, it is treated as a Monthly Mudarabah Certificate at 7.12% for two months, about Rs 11,900. The cost of breaking early is therefore the gap between the long-tenor and short-tenor rates, which was 2.44 percentage points a year on these sheets, and if you had already been paid monthly profit at the higher rate the difference would be adjusted at encashment.

• If you might need the money inside a year, book a 6-month or 3-month COII rather than a 1-year one; the rate is the same 7.12% and there is nothing to lose by breaking it
• If you can commit to twelve months but not more, the 1-year maturity option is the sweet spot on the current sheet
• If you are over 60, the senior 1-year monthly certificate pays the maturity rate with monthly income, which is the best combination on the sheet
• Keep a separate savings account for emergencies so the certificate is never the first thing you break

Zakat and withholding tax on a COII

The product page states that zakat is deducted on COIIs as per the Zakat and Ushr Ordinance 1980, and advises customers to calculate their own zakat according to their school of thought. In practice that means the bank deducts zakat on the first of Ramadan from eligible balances above the exemption limit announced each year, unless you have filed the CZ-50 declaration of faith with the branch claiming exemption as a non-Hanafi or on other recognised grounds. The exemption limit is set annually and was not on any page we fetched, so confirm it with the branch before Ramadan. The deduction is zakat on your behalf, not a fee; our guide to zakat on bank accounts explains when it counts towards what you owe and the zakat hub covers the rest of your assets.

Withholding tax is separate. The FBR's withholding tax rate card for tax year 2026, updated to 30 June 2025 under the Finance Act 2025, sets the rate on yield or profit paid by a banking company on an account or deposit at 20% for people on the active taxpayer list and 40% for those who are not, under section 151. The same card taxes profit on National Savings schemes at 15% and 30%. On the Rs 95,600 full-term example above, a filer would receive about Rs 76,500 and a non-filer about Rs 57,400. Check whether the Finance Act 2026 has changed these rates, because the card we read predates it.

COII against Sarwa and an Islamic money market fund

A saver with Rs 500,000 to put away for a year has three halal routes that are easy to open: the COII, the government's Sarwa Islamic Term Account at any national savings centre, and an Islamic money market fund such as Al Meezan's Meezan Rozana Amdani Fund. The table uses the rates each publisher showed on 24 September 2026. Sarwa's rate is described by National Savings as an anticipated profit rate; the fund's figure is its actual return for the financial year 2026; the COII figure is the rate declared for September.

On these numbers National Savings' Sarwa out-pays the COII at every tenor and is taxed more lightly, which is why our Sarwa versus Islamic bank deposits comparison exists. The COII's case rests on convenience, a bank relationship, the deposit protection guarantee and the fact that its rate is a declared result rather than an anticipated one. The money market fund's case is liquidity: a daily payout, no lock-in and a fund size of Rs 28.25 billion at 31 August 2026, at the cost of a management fee and a return that has swung from 21.50% in FY2024 to 9.49% in FY2026. For a comparison across the fund category, see our page on Islamic money market funds and the investing hub.

Who should choose what

Choose a 1-year or 1.5-year COII if you already bank with Meezan, want a declared rather than anticipated return, value the Rs 1 million deposit protection and will not need the money inside the term. Choose the senior 1-year monthly variant if you are over 60 and want income. Choose a 3-month or 6-month COII only as a parking place for money with a known near-term use, since it pays no more than the one-month certificate. Choose Sarwa if the extra two percentage points and the lower withholding rate matter more to you than banking convenience and you are comfortable with a government counter. Choose a money market fund if you may need the money at a day's notice. Whatever you pick, read the latest rate sheet on the day you book, because the September figures above will have been replaced by the time you reach the branch. Facts checked against meezanbank.com, fbr.gov.pk, savings.gov.pk, almeezangroup.com, sbp.org.pk on 24 September 2026.

Frequently asked questions

What is the Meezan COII profit rate right now?

For the month ended 30 September 2026, Meezan declared 7.12% on the 3-month and 6-month COII, 9.18% on the 1-year certificate with monthly profit, 9.56% on the 1-year certificate paid at maturity and on the senior citizens' 1-year monthly variant, and 10.12% on the 1.5-year certificate. Rates are declared monthly from the Mudarabah pool and the sheet is updated at the start of each month.

What is the minimum investment in a certificate of Islamic investment?

Rs 50,000 for every COII tenor and for the Monthly Mudarabah Certificate, according to the product page and the key fact statement dated 5 October 2026. There is no account maintenance fee on the certificate and profit is subject to withholding tax at the applicable rate. The 2, 3 and 5-year certificates are discontinued for fresh deposits and roll-overs.

Can I encash a Meezan COII before maturity?

Yes. The Premature Encashment Schedule effective 1 September 2025 pays profit at the rate and weightage of the product whose tenor you actually completed: the Monthly Mudarabah Certificate rate inside three months, the 3-month COII rate between three and six months, the 6-month COII rate between six months and a year, and the 1-year monthly COII rate between one and 1.5 years. There is no separate penalty fee.

Is zakat deducted from a COII?

Yes. The product page states zakat is deducted under the Zakat and Ushr Ordinance 1980, which in practice means a deduction on the first of Ramadan from balances above the annual exemption limit unless a CZ-50 declaration is on file. Meezan advises customers to calculate their own zakat by their school of thought, and the exemption limit should be confirmed with the branch.

How much tax is deducted on COII profit?

Under section 151, the FBR rate card for tax year 2026 sets withholding on profit paid by a bank on a deposit at 20% for active taxpayers and 40% for non-filers. On Rs 95,600 of annual profit a filer would receive about Rs 76,500 and a non-filer about Rs 57,400. Check for changes under the Finance Act 2026 before relying on these figures.

Is a COII better than Sarwa or a money market fund?

On the rates published on 24 September 2026, Sarwa's 1-year account at 11.33% anticipated out-paid the COII's 9.56% declared and is taxed at 15% rather than 20% for filers. The COII offers a bank relationship, Rs 1 million deposit protection and a declared rate. A money market fund such as Meezan Rozana Amdani returned 9.49% in FY2026 with daily liquidity but a 1.10% fee.