Is TD (The Toronto-Dominion Bank) Halal or Haram?

Based on our AAOIFI-standard shariah screening, TD is Not Halal (Haram) and is not considered permissible for Muslim investors. It failed 4 of 4 compliance screens. The Toronto-Dominion Bank's core business activity was found to be non-compliant. Its debt-to-market-cap ratio of 405.38% exceeds the ≤33% threshold. Its interest income of 138.49% exceeds the ≤5% limit. Its cash & securities ratio of 95.34% exceeds the ≤33% threshold.

The Toronto- Dominion Bank is one of North America's largest financial institutions, operating through Canadian Retail, U.S. Retail, and Wholesale Banking segments. It provides a vast array of conventional banking services, including interest-bearing chequing and savings accounts, residential mortgages, credit cards, and commercial loans. With a significant footprint in both Canada and the Eastern United States, TD is a dominant player in the diversified banking sector. For Muslim investors, TD presents a clear case of non-compliance , failing all four AAOIFI screening criteria to be classified as Not Halal (Haram). The primary issue is the nature of its business; as a conventional bank, its core model relies on lending money at interest (riba), which is strictly prohibited in Islamic finance. Consequently, the stock does not pass the initial business activity screen, rendering the financial ratios secondary but confirmatory evidence of its impermissibility. Financially, the bank's structure is heavily leveraged, with a debt-to-market cap ratio of 405.4%, well above the 33% limit typically acceptable for halal equity screening. Additionally, its reliance on interest is overwhelming, with interest-based income calculated at nearly 138 % of total revenue, making purification impossible. Investors seeking exposure to the financial sector would need to look for specific Islamic banks or fintech companies that operate on profit-sharing models rather than interest-based lending. There is no scholarly debate regarding conventional banks like TD; the consensus is that investing in institutions where the primary business is the sale of debt and interest is imper missible. While TD offers some wealth management services that might buy halal assets for clients, holding equity in the bank itself involves owning a share of a riba-based enterprise. Muslim investors should avoid this stock entirely and seek Shariah-compliant alternatives in other sectors. The Toronto-Dominion Bank operates in the Financial Services sector under the Banks - Diversified industry and is headquartered in Toronto, ON, CA. The company is led by CEO Leovigildo Salom Jr. and employs approximately 100,424 people.

TD was screened using AAOIFI-based shariah compliance criteria. Four tests are applied: (1) Business Activity — the company's core business must not derive primary income from haram (prohibited) activities such as alcohol, gambling, tobacco, or interest-based finance. (2) Debt-to-Market-Cap — total debt must not exceed 33% of market capitalization. (3) Interest Income — interest income must not exceed 5% of total revenue. (4) Cash & Securities — cash and interest-bearing securities must not exceed 33% of market cap. TD passed 0 of these 4 screens.

TD was last screened on 2026-02-25. Shariah compliance status can change as companies report new financial data, acquire new businesses, or shift revenue streams. We recommend checking back periodically for the most up-to-date screening results.