Module 3 of 10 · 15 minutes

Zakat on Cash, Savings and Bank Accounts

By the end of this module, you will be able to:

1Identify which cash-based assets are Zakatable
2Calculate Zakat due on cash and savings using the 2.5% rate
3Explain how to handle multiple accounts and different currencies

Which cash assets count?

Cash is the simplest category of Zakatable wealth to understand. It includes:

Cash held at home or on your person.
Current account balances.
Savings accounts and fixed deposits.
Money set aside for a specific future purpose, such as a house deposit, unless it has already left your ownership.
Money owed to you that you expect to be repaid, such as a personal loan you gave to someone else.

[ Image placeholder — savings jar and bank statement ]

How to calculate

The calculation is straightforward once you have your total figure. Follow these steps in order.

Step 1

Add it all up

Add up all cash and cash-equivalent assets on your chosen Zakat date.

Step 2

Check the threshold

Confirm the total is at or above the Nisab threshold.

Step 3

Apply the rate

Multiply the total by 2.5%, or divide by 40, to find the amount due.

Worked example

Amina has £2,000 in her current account, £5,500 in savings, and £300 in cash at home on her Zakat date. Her total cash wealth is £7,800. Since this is above the Nisab threshold, she calculates: £7,800 x 2.5% = £195 due in Zakat on her cash alone.

Multiple accounts and multiple currencies

If wealth is spread across several accounts, whether current, savings, or held in a different country, it should all be added together in one currency using the exchange rate on the Zakat calculation date. It does not matter how many separate accounts the money sits in; what matters is the combined total on that one date.

Money you are owed

If someone owes you money and you reasonably expect to be repaid, that amount is usually included in your Zakatable wealth. If the debt is doubtful, for example the borrower has disappeared or is unable to pay, some scholars say Zakat only becomes due once, and if, the money is actually received.

Reflective practice point

List, in your own notes, every account or cash source you personally hold. This list will be useful later in Module 7 when we bring all asset categories together into one final calculation.

Knowledge check

1. Give three examples of cash-based Zakatable assets.

2. How should someone calculate Zakat if their savings are spread across three different bank accounts?

3. What is the standard Zakat rate applied to qualifying cash wealth?

1. E.g. current account balance, savings/fixed deposits, cash at home.

2. Add all three balances together in one currency on the Zakat date, then apply 2.5% to the combined total.

3. 2.5%.