Q: May I buy bonds issued by Jewish companies or the State of Israel?

A: A company that issues a bond is essentially accepting a loan from the buyer. The interest they pay would thus seem a violation of ribbis. However, R’ Moshe Feinstein zt”l ruled that there is no violation of ribbis when lending to a corporation, even if Jewish-owned, because the Jewish owners do not carry a personal lien and the liability is limited to the corporate assets (Igros Moshe Y.D. II: 63). Other authorities dispute this, since they view the corporation as a partnership of the various Jewish owners or shareholders, who are considered the borrowers. Many acknowledge, though, that the prohibition of taking interest from a corporation is rabbinic (Minchas Yitzchak 1:3, 4:16). Some are also lenient regarding bonds of the Israeli government, which does not even have defined owners (Har Zvi Y.D. 126). Therefore, while it is possible to rely on the leniency of R’ Feinstein, it is preferable to subject the bond to a heter iska. The government of the State of Israel subjects its bonds to a heter iska. While some authorities question the widespread usage of heter iska, one can certainly rely on it in conjunction with the other leniencies mentioned (Bris Yehuda 7:n66; The Laws of Ribbis, R. Reisman, 5:26-27 & 12:37).