Do I pay Zakat on savings only or on my checking account too?

zakat on savingsQuestion: Do I pay Zakat on my Savings only or on my checking account too?

Answer: Zakat is due on ANY surplus wealth. It must be more than the Nisab and is in your possession after one year passes. This includes: Savings accounts, checking accounts, actively invested shares or Mutual Funds. It also includes cash on hand, gold and silver (bullion or jewelry, etc). If you own a business it includes any inventory or property which is currently for sale, as well as business accounts (similar to those above).

Example: Ahmed owns his own business. He has a savings account with 10k and a checking account with 4k. He also owns a car posted on Craigslist for sale at 8k. His business account contains 4.5k, and he does not own any business inventory. He has possessed Nisab for one year, and he usually pays his Zakat on the 1st of Ramadan. He will pay 2.5% on 26,500 USD. He will pay 662.5.

Don’t see what you’re looking for here? Try our Zakat page for more information.

About Joe Bradford

About Joe Bradford

Joe is a structuring advisor for a major real estate development firm, specializing in Shariah compliant investment vehicles. He runs a financial advisory. He is the founder of Muslim Money Guide and also blogs at joebradford.net.

comments

  1. Muhammad

    assalamu alaykum

    If I don’t wait until the first full year to pass before paying zakat (for example, paying in Ramadan) does that cover me for the year until next Ramadan? Or do I need to come back and check if there is anything left to pay 1 year after the nisab was reached?

Comments are closed.

Want the latest and greatest updates from Muslim Money Guide?

Subscribe to our mailing list below. You'll get:

  • Latest Articles

  • Video and Podcasts

  • Whitepapers and Research

Your Email Address: