A significant portion of society’s liquidity is held by individuals who lack the desire and ability to use it efficiently, while there are others who possess the knowledge, experience, and interest in economic activities but lack sufficient capital. Under such conditions, institutions that can link these two groups and transform excess financial resources into productive capital are essential. This study examines the causal relationship between term deposits and financing methods based on Islamic contracts in non-governmental, commercial, and specialized banks over the period 2006–2023 using the Dumitrescu–Hurlin panel causality test. The results indicate a one-way causality from term deposits to most Islamic financing contracts, including installment facilities, Qarz al-Hasanah, Salaf, Jaaleh, lease-to-own, legal partnership, and direct investment, while bidirectional causality is confirmed between term deposits and Mudarabah and civil partnership. Mudarabah and civil partnership involve economic and commercial activities and are included in both sight and term deposits, justifying the observed bidirectional causality. Moreover, as the banking system primarily operates by converting deposits into financing, and deposits serve as the financial backbone of banks, the reverse relationship from financing to deposits is less critical, since financing may be converted into different types of deposits over time. Overall, the findings, consistent with Dumitrescu and Hurlin’s (2012) Granger causality results, support the exogeneity of money in the Iranian economy.