Profit-Sharing Certificates

Definition of "Profit-Sharing Certificates"

A proposed instrument of Islamic banking. The certificate would be offered by commercial banks to savers. A profit-sharing certificate involves investing a certain sum of money into short term operations. Its maturity can vary from 60 days to one year. It offers diversification among short-term placements. All these characteristics would make it especially marketable and relatively attractive to savers who desire to stay closer to the higher edge of the liquidity spectrum.