ZAKAT ON SAVINGS
Zakat on savings is obligatory to be fulfilled when your savings account has met the minimum amount (Nisab) and you have held this minimum amount for a period of 1 Hijri year or 355 days (Haul). With this, you have met the conditions, Nisab and Haul, and you are obligated to fulfil Zakat on your savings account(s).
There are two types of Zakat on Savings:
- Zakat on Savings (Single Account)
- Zakat on Savings (Multiple Accounts)
CONDITIONS FOR ZAKAT ON SAVINGS
NISAB
Zakat is only a matter of obligation if your savings is above the Nisab (minimum amount). If your savings do not meet the Nisab, Zakat is not an obligation to you.
HAUL
Zakat is only payable if you have completed the Haul, which is a period of 1 Hijri year (355 days). For first-timers, your Haul period begins when your savings account first meets the Nisab. For recurring Zakat payers, Haul period begins from the last Zakat payment date.
If at any point, your savings fall below the Nisab, your Haul is broken.
ZAKAT ON SAVINGS EXAMPLE (COMPLETED HAUL)
In this example, the Haul begins in Feb 2025 as the savings held was above the Nisab.
As the savings held over the year was consistently above the Nisab, the Haul is complete in Feb 2026 and Zakat is due.
Zakat is calculated based on 2.5% of the lowest amount held in the Haul period. In this example, the lowest amount was in Apr 2025 ($12,000).
Zakat due would be $300 ($12,000 x 2.5%).
ZAKAT ON SAVINGS EXAMPLE (BROKEN HAUL)
In this example, the Haul first began in Feb 2025 as the savings held was above the Nisab.
However, in Jul 2025, the savings held fell below the month’s Nisab. The Haul is now broken.
A new Haul period begins in Oct 2025 as the savings held are now back above the published Nisab. Zakat would be due one year later should the savings remain above Nisab throughout (i.e. Oct 2026).
IF YOU HAVE ONE SAVINGS ACCOUNT
Look at all the balances of your account and find the lowest balance within that Haul period.
If the amount is below the Nisab, there is NO Zakat for that account. You do not have to proceed further. If the amount is more than Nisab, proceed to next step.
Zakat amount is:
Lowest balance × 0.025
IF YOU HAVE MULTIPLE SAVINGS ACCOUNT
For each savings account, find the date in the Haul period where the balance is the lowest in that account.
For each date identified, add up the balances across all savings accounts. This would help identify the lowest combined savings amount at a single point of time in the Haul.
Zakat amount is:
Lowest Combined Amount × 0.025
EXAMPLE (MULTIPLE SAVINGS ACCOUNTS)
The above table records, in blue, the lowest account balance for each account during the haul period and tracks the balance in other accounts on the same date to find the lowest total account balance at a specific point in time within the Haul period.
The lowest total account balance within the Haul period was $24,500 (April 2023).
Assuming that the Nisab is $7,000, Zakat is obligatory for these accounts.
The Zakat payable will be: $24,500 × 2.5% = $612.50
Note: We do not calculate by totalling the lowest amount in each account for accuracy purposes. If we did, based on the above example, it will be $4,500 ($1,000 + $2,000 + $500 + $1,000). This is not accurate because in fact, there wasn’t a point in time within the Haul period when the total account balance was $4,500.
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