Zakat on Savings
Understanding how Zakat applies to your cash savings.
What Counts as Savings for Zakat?
Savings for Zakat purposes include:
- Money in current and savings accounts
- Cash held at home
- Fixed deposits and bonds
- Money in ISAs or similar tax-free accounts
How is Zakat Calculated on Savings?
Zakat on savings is calculated at 2.5%, provided:
- The total net zakatable assets (not just savings) exceed the Nisab threshold.
- The savings have been held for at least one lunar year.
What About Joint Accounts?
A common approach is that each account holder pays Zakat on their share of the funds. For a joint account with equal ownership, each person would include 50% of the balance in their Zakat calculation.
Deducting Debts from Savings
Before calculating Zakat, you may deduct immediate debts and liabilities such as credit card balances, short-term loans, and outstanding bills.
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