ruling concerning taking Interest and spending it on charitable Projects

Question :

We are in a country whose people are not Muslims. In this country Allâh has blessed us with an abundance of wealth that we are required to keep in one of the American banks. We Muslims put our money in these banks without taking any Riba (interest) gains. They (the banks) are pleased with that and they think that we are foolish because we leave money for them that helps them in spreading Christianity with the wealth of the Muslims. My question is why don't we benefit from these interest earnings and help the poor Muslims with it or build Masjids with it and Islamic schools? Is the Muslim blameworthy if he takes these interest gains and spends them in the way of Allâh, like donating to the Mujahidin (Muslim soldiers who fight in Jihad against the enemies of Islam) and other things?

Answer:

It is not permissible to put money into Riba banks, regardless of whether those who run them are Muslims or non-Muslims due to what that contains of assisting them in sin and transgression, even if that is without taking interest. However, if the person is forced by necessity to do that in order to keep his money safe without taking interest, there is no harm in that, if Allâh wills. This is due to Allâh's Statement:
"Indeed He (Allah) has explained to you what He has forbidden for you, except what you are forced by necessity to do."

In reference to their being a condition (in the agreement) of interest, then the sin is even greater, because Riba is among the major sins. Indeed Allâh forbade it in His Noble Book and upon the tongue of His Trustworthy Messenger. He informed that it is destroyed and that whoever indulges in it, then he has declared war against Allâh and His Messenger. It is possible for the owners of the money to spend from it in the ways of righteousness and goodness, and in helping the Mujahidin, and Allâh will reward them for that and replace that money for them. This is as He said:
"Those who spend their wealth (in charity, in the way of Allah, for the cause of Islam, etc.), night and day, secretly and publicly, they will have their reward with their Lord, and no fear shall be upon them, nor shall they grieve."

And He said:
"And whatever you spend of anything. He (Allah) will replace it, and He is the Best of providers."

This includes Az-Zakah and other things as well. It has been authenticated from the Messenger of Allâh that he said:
"Wealth does not decrease from (giving) charity, and Allah does not increase a servant with (the characteristic of) pardoning except in honor, and no one humbles himself for Allah except that Allah elevates him."

It has also been authenticated from him that he said:
"There is not a day that the people enter its morning except that two angels descend during it. One of them says, 'O Allah, give replacement to the person who spends,' and the other says, 'O Allah, give loss to the person who withholds."'

The Verses and Hadiths are numerous concerning the virtue of spending in the ways of goodness and charity on those who have needs. However, if the owner of the wealth took Riba (interest) ignorantly from the bank or he did so due to being lax about the ruling, but Allâh guided him afterward to what is correct, then he should spend it in ways of goodness and righteous deeds. He should not leave that Riba interest in his wealth, because Riba destroys whatever mixes with it, as Allâh said:
"Allah will destroy Riba and will give increase for Sadaqat (deeds of charity, alms, etc.)."
And Allâh is the Giver of success.