Do I need to pay zakat on money held in a savings account?

The answer

Zakat is an annual obligation on wealth that reaches the nisab threshold and is held for a full lunar year. Savings held in a bank account are generally included in that wealth, whether the account is described as current, savings or instant access. The rate is 2.5 per cent of the qualifying total.

When calculating, include cash, money in accounts and the value of qualifying gold or trade goods. Immediate debts and essential obligations may be deducted according to scholarly guidance, but the details depend on the type of debt. Money set aside for a specific future need is not automatically exempt simply because it has a purpose.

The nisab is commonly calculated by reference to a specified weight of gold or silver, and scholars differ on which measure to use. Pensions, investments and business assets can raise more complex questions. Keep clear records, use a consistent calculation date and ask a qualified scholar or adviser about your circumstances. Zakat should be paid with care, not left uncertain year after year.