Hibah means "gift" in Arabic. In Islamic law, it is a voluntary transfer of property or money from one person to another without expecting anything in return. Unlike a sale, there is no price — it is a pure act of generosity.
In Islamic banking, Hibah plays a clever role. Since banks cannot pay interest on savings accounts (that would be riba), they instead give depositors a "gift" (Hibah) based on the bank's profits. The bank is not legally obligated to give it — but in practice, they almost always do.
This structure lets Islamic banks reward depositors without violating Shariah principles. The amount of Hibah typically matches or comes close to what conventional banks pay as interest — making Islamic savings accounts competitive.