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Zakat on Savings: How to Calculate It

Scholar Verified

Written by: M. Hamza

Researcher: Ayesha Rahman

Reviewed by: Omar Abdullah

Last Review: 9 September 2026

Our Ramadan information is carefully examined by a qualified Islamic reviewer to help ensure that religious details, references, and guidance are presented accurately and responsibly.

Zakat is due on savings when your net zakatable wealth reaches the nisab and remains in your ownership for one complete Islamic lunar year.

Savings can include money in a bank account, cash at home, mobile wallets, foreign currency and money that people owe you. The standard Zakat rate on cash and savings is 2.5%, or one-fortieth.

Zakat on savings is one of the most common questions Muslims face. Knowing when zakat becomes due on these savings is essential.

Zakat on Savings

Is Zakat Due on Savings?

Yes. Cash and savings are zakatable assets. The general principle is that any money you own, whether in a bank account or in hand, is subject to zakat once certain conditions are met.

"There is no Zakat on wealth until one year (hawl) has passed over it."

— Sunan Ibn Majah

This applies to your savings just as it applies to gold, silver, and business assets.

When Does Zakat Become Obligatory on Savings?

Zakat on savings becomes obligatory when two conditions are met:

  • 1. Nisab — Your savings must reach or exceed the minimum threshold.
  • 2. Haul — You must have held this minimum amount for one complete lunar year (approximately 354 or 355 days).

If your savings fall below the nisab at any point during the year, the haul is broken. A new haul period begins when your savings once again reach the nisab.

Are Specific Savings Included?

Yes. Zakat may be due on savings if:

  • You are a Muslim who meets the conditions of Zakat.
  • Your net zakatable wealth reaches the nisab.
  • You have owned the wealth for one complete lunar year.
  • The money is beyond your essential living needs.
  • Any deductible debts are considered according to the method you follow.

Cash in a current account, savings account, mobile wallet or at home is generally treated as zakatable wealth.

Nisab for Savings

What Is the Nisab for Savings?

The nisab for cash and savings is measured by the value of either:

  • 85 grams of gold, or
  • 595 grams of silver

Since silver has a lower value, many scholars recommend using the silver nisab because it allows more people to give zakat and benefits more of the poor.

The nisab amount changes as the market value of gold and silver fluctuates. You should check the current nisab value in your local currency on your zakat date.

What Savings Are Included?

When calculating Zakat, include qualifying money held in:

  • Bank current accounts.
  • Savings accounts.
  • Fixed-term deposits.
  • Cash at home.
  • Mobile wallets.
  • Foreign currencies.
  • Digital payment accounts.
  • Money lent to someone if you reasonably expect repayment.
  • Business cash reserved for trade.
  • Refunds or payments that are already owed to you.

Convert foreign currency into your local currency using its current exchange rate on your Zakat date.

Calculating Zakat on Savings

How to Calculate Zakat on Savings

The zakat rate on savings is fixed at 2.5% — one quarter of one-tenth.

If You Have One Savings Account

  1. Identify your haul period. This begins when your savings first reach the nisab.
  2. Find the lowest balance in that account during the haul period.
  3. Check if that lowest balance is above the nisab. If it is below, no zakat is due for that period.
  4. Calculate 2.5% of the lowest balance.

Example:

Your haul runs from February 2025 to February 2026. The lowest balance in your account during this period was ,000. Your zakat payable would be:

,000 × 2.5% =

If You Have Multiple Savings Accounts

If you have more than one savings account, you should combine them. Zakat is calculated based on your overall savings, not each account separately.

  1. For each account, find the date in the haul period where the balance is lowest.
  2. On each of those dates, add up the balances across all your savings accounts.
  3. Find the lowest combined total at a single point in time during the haul.
  4. Calculate 2.5% of that lowest combined amount.

The key point is that you should not calculate zakat separately for each account by taking the lowest balance from each and adding them together. This can be inaccurate because it may combine balances from different dates and understate or overstate your actual wealth.

Example:

Suppose you have three accounts. The lowest combined balance on any single date during your haul is ,500. Assuming this is above the nisab, your zakat payable would be:

,500 × 2.5% = .50

Specific Savings Situations

What About Savings for Specific Purposes?

Many people save money for specific reasons — education, a house deposit, a car, or an emergency fund. Does zakat apply to these savings?

The answer is yes. Zakat is obligatory on wealth that remains in your possession for a lunar year, regardless of why you held onto it.

If you are saving for university fees, a wedding, or any other purpose, and that money reaches the nisab and a lunar year pass, zakat is due on it. The purpose of the savings does not exempt it from zakat.

What About Money You Spend During the Year?

Zakat is calculated on your lowest balance during the haul period. This means money you spend throughout the year is not subject to zakat.

For example, if you start the year with ,000, spend ,000 on expenses, and your balance drops to ,000 before rising again, your zakat would be calculated on the lowest balance — ,000 — not the highest.

What If Your Savings Fall Below Nisab?

If your savings drop below the nisab at any point during the haul period, the haul is broken. You do not owe zakat for that period.

A new haul period begins when your savings once again reach the nisab. Zakat would be due one lunar year later, provided your savings remain above the nisab throughout that new period.

Key Conditions for Zakat on Savings

  • Nisab: The minimum threshold of wealth you must hold before zakat is due (equivalent to 85g of gold or 595g of silver).
  • Haul: One full Islamic (lunar) year of holding wealth above the Nisab.
  • Rate: 2.5% of total zakatable savings and assets.

Each asset class has its own calculation method and should be assessed individually.

What About Bank Interest?

If your savings account earns interest (riba), this interest is impermissible in Islam. Scholars differ on how to handle it, but the general advice is:

  • The original principal deposited in the bank is subject to zakat.
  • The interest earned should be given away to charity without the intention of gaining reward, as it is unlawful wealth.

You should seek guidance from a trusted scholar on how to handle interest in your specific situation.

Frequently Asked Questions

Here is a step-by-step example of calculating zakat on savings:

  1. Determine your haul period: Your savings first reached the nisab on February 1, 2025.
  2. Track your balances: During the year from February 2025 to February 2026, your savings fluctuated:
    • March 2025: ,000
    • June 2025: ,500
    • September 2025: ,000
    • December 2025: ,000
    • January 2026: ,000
  3. Find the lowest balance: The lowest balance during the haul was ,000 in December 2025.
  4. Check against nisab: The current nisab is ,000. ,000 is above the nisab, so zakat is due.
  5. Calculate 2.5%: ,000 × 2.5% =
  6. Pay zakat: Give to eligible recipients before your zakat date passes.

Zakat on savings is a straightforward obligation once you understand the rules. The key points are: nisab (85g of gold or 595g of silver), haul (one lunar year), and rate (2.5%). Check your savings balances, calculate carefully, and pay with a sincere intention.

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