Depositing money to use interest for a good cause
16-8-2004 | IslamWeb
Question:
Is it permissible with intention to keep deposit money in bank, the interest money be paid to near relatives who are poor like uncles, aunts. (The intention is to get interest money that will help poor relatives). Is it permissible, please clarify.
Answer:
Praise be to Allah, the Lord of the Worlds; and may His blessings and peace be upon our Prophet Muhammad and upon all his Family and Companions.
Dealing with Riba (usury/interest), even if the intention is to spend the Riba money on the needy and the poor people, is forbidden. The Prophet 
said: "May Allaah curse the one who eats Riba, the one who makes people eat it, the one who writes it and the two people who witness it, all of them (the named people) are equal in sin." [Muslim]
Thus, any person who gets involved in Riba subjects himself to this threat no matter what his intention is. In fact, ends don't justify means, if such means are forbidden.
Besides, these banks deal with Riba, and by doing so, they are putting themselves in war against Allaah and His Prophet, sallalaahu 'alayhi wa sallam. So, Muslims are not allowed to deposit their money in such banks because doing so helps the business of these banks which is cooperation with them in sin. Allaah Says (what means): {….Help you one another in Al-Birr and At-Taqwa (virtue, righteousness and piety); but do not help one another in sin and transgression. And fear Allaah. Verily, Allâh is Severe in punishment.}[5:2].
Charity should be given only with Halal money, Allah does not accept charity given from Haram money as the Prophet,sallalaahu 'alayhi wa sallam, said: "Allaah is Great, so he does not accept except that which is pure (lawful)". So, Allaah does not accept the charity that is from ill-gotten (Haraam) earnings. But if a Muslim is compelled to deposit his money in non-Islamic banks, he has to give the interest to poor and needy people with the intention of getting rid of such Haram money, not as a charity.
If you want to help your poor relatives, do it by giving them money that was earned through means that are Islamicaaly permisible , you will be rewarded for that.
Allaah knows best.