Zakat on Savings

Zakat is due on all types of bank accounts that hold your liquid savings, including current accounts, savings accounts, fixed-term deposits, and interest-free schemes like ISAs (as long as the funds are halal). For interest-bearing accounts, you should separate out any interest earned and give it as charity, not as Zakat.

Emergency or future-use funds are also subject to Zakat if they meet the nisab and have been held for a full lunar year. This applies even if you’ve earmarked the money for specific goals like Hajj, marriage, or education, since Zakat is due on wealth in your possession.

If your savings fluctuate throughout the year but generally stay above the nisab, you calculate Zakat based on your balance at the end of the lunar year. While some scholars suggest averaging monthly balances, the simplest approach is to pay 2.5% on whatever you have at year-end.

Zakat is not obligatory on children’s savings unless they are mature and responsible (mukallaf). However, many parents choose to pay Zakat on their children’s behalf when amounts are significant.

Paying Zakat on your savings purifies your wealth and helps support those in need. Though it’s only a small percentage, its impact is great. Use Crisis Aid’s Zakat Calculator to calculate and give your Zakat safely, correctly, and with full intention.