Is The Toronto-Dominion Bank Stock Halal?
The Toronto-Dominion Bank · TD.TO · TSX
The Toronto-Dominion Bank (TD.TO) does not pass Shariah screening: its core business fails the activity screen (the toronto-dominion bank (td bank group) is one of canada's largest banks, operating through canadian personal and commercial banking, u), and interest-bearing debt / market cap is 256.7% against the < 30% limit (data as of 2026-04-30), and cash + interest-bearing securities / market cap is 166.9% against the < 30% limit (data as of 2026-04-30), and impermissible income / total revenue is 75.6% against the < 5% limit (data as of 2026-04-30). It is not held by Shariah-screened ETFs WSHR. Screened alternatives exist in the same sector — see the halal stock screeners and ETF guides below.
Financial data as of 2026-04-30 · Screening basis: AAOIFI · Last reviewed 2026-06-14
Our Analysis
TD Bank fails Shariah screening at the business-activity stage, the same way every conventional bank does. TD's revenue comes from taking deposits and lending at interest across its Canadian personal and commercial banking and large U.S. retail banking franchises, plus conventional wealth management, insurance, and wholesale banking. In fiscal 2025, reported net interest income was $33.1 billion against $67.8 billion of total reported revenue, roughly half, and that reported total was itself inflated by a one-time gain on the sale of TD's investment in Charles Schwab. Interest-based lending is the engine of the business, which places TD outside the AAOIFI business screen's roughly 5% tolerance for impermissible revenue by a wide margin.
Both Zoya and Musaffa publicly classify TD as not Shariah-compliant, and Shariah-screened indices and funds available to Canadians, including Wealthsimple's WSHR and the S&P/TSX 60 Shariah, exclude conventional banks by construction. As with the other Big Six banks, this is a categorical exclusion: no quarter-to-quarter change in TD's ratios can fix it, because the issue is what the company does, not how much debt it carries.
Canadian Muslim investors drawn to TD for its dividend should know the dividend stream itself derives primarily from interest income. The screened alternatives on the TSX tend to be in railways, energy, materials, and industrials, and any individual name should be re-verified on a current screening platform before buying.
Business Activity Screen
The Toronto-Dominion Bank (TD Bank Group) is one of Canada's largest banks, operating through Canadian Personal and Commercial Banking, U.S. Retail, Wealth Management and Insurance, and Wholesale Banking segments. For fiscal 2025 (year ended October 31, 2025) TD reported total revenue of $67,777 million on a reported basis, comprising net interest income of $33,062 million and non-interest income of $34,715 million.
TD's core business is conventional interest-based banking in Canada and the United States. Per its Q4 2025 news release, reported net interest income of $33,062 million was approximately 49% of total reported fiscal 2025 revenue of $67,777 million (reported non-interest income in fiscal 2025 was elevated by the one-time gain on the sale of TD's Schwab investment; on an adjusted revenue basis of $61,810 million, net interest income is an even larger share). The remaining revenue is predominantly from conventional financial services. This is a clear business-screen failure under AAOIFI-style screening.
Financial Ratio Screen
| Screen | Value | AAOIFI limit | Result |
|---|---|---|---|
| Interest-bearing debt / market cap | 256.7% | < 30% | Fail |
| Cash + interest-bearing securities / market cap | 166.9% | < 30% | Fail |
| Impermissible income / total revenueInterest income only — verify other impermissible revenue lines in the 10-K | 75.6% | < 5% | Fail |
Spot market cap at research date (consider trailing average for borderline names). Data as of 2026-04-30 · thresholds per AAOIFI Shariah standards.
This verdict uses the AAOIFI standard — the most widely used and, at a 30% debt limit, the most conservative mainstream Shariah standard. Interest-bearing debt and interest-bearing securities each stay under 30% of market cap, and impermissible income under 5% of revenue. Other standards (Dow Jones Islamic, S&P Shariah, MSCI Islamic, FTSE Yasaar) use ~33% limits or screen against total assets, so a borderline company can be rated differently by each. How we screen & why screeners disagree →
Scholars' & Screeners' Positions
Published positions, cited as stated. Screeners can reach different conclusions on the same company because of ratio timing and methodology differences — we report the disagreement rather than flatten it.
Wealthsimple Shariah World Equity Index ETF (WSHR)
Not held in WSHR as of 2026-06-11. Absence can reflect screen failure or index scope — verify before citing as a screen outcome.
Source →
What to do instead
You don't have to choose between investing and your values — screened alternatives exist for nearly every position.
Related guides
Consider Consulting an Islamic Scholar
Major whether The Toronto-Dominion Bank is halal decisions often involve nuances that vary by scholarly opinion and personal circumstance. While HalalWallet provides educational comparisons and tools, we are not scholars or financial advisors. For personal guidance on Shariah compliance, consider speaking with a qualified Islamic scholar, your local imam, or a Shariah-certified financial advisor familiar with your situation.
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Frequently Asked Questions
Sources and review process
This page is reviewed against HalalWallet editorial standards and source documentation.
Reviewed by: HalalWallet Editorial Team
Last reviewed: 2026-06-01
- TD.TO latest filings on SEDAR+ (balance sheet 2026-04-30)
- AAOIFI Shariah Standards
- TD Q4 2025 News Release (fiscal 2025 results)
- TD 2025 Annual Report
- Zoya screener page for TD
- Musaffa screener page for TD.TO
- WSHR holdings list (Wealthsimple)
- S&P Shariah Indices Methodology (spglobal.com)
- HalalWallet Methodology
- Editorial Policy
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