Is Zakat Due on Savings?
Yes. Cash and savings are among the most straightforward zakatable assets. If the total value of your savings — combined with your other eligible wealth — exceeds the nisab threshold for a full lunar year, Zakat is due at 2.5%.
This includes money held in current accounts, savings accounts, ISAs, fixed deposits, and physical cash at home.
What Counts as Zakatable Savings?
Not every pound you own is necessarily subject to Zakat. Here is what qualifies:
- Money in current accounts and savings accounts
- Cash ISAs (the balance, not the tax wrapper)
- Fixed-term deposits and bonds
- Physical cash kept at home or in a safe
- Money owed to you that you expect to receive
- Business cash reserves and float
What Does Not Count?
Some assets are excluded from your Zakat calculation:
- Your primary home — the property you live in is not zakatable
- Personal belongings you use daily — furniture, clothing, your car
- Business assets used for operations — equipment, premises, vehicles used for work
- Debts you are unlikely to recover
Step-by-Step Calculation
Here is how to work out your Zakat on savings:
- Step 1: Add up all cash and savings across every account — current accounts, savings accounts, ISAs, fixed deposits, and cash at home.
- Step 2: Add any money owed to you that you expect to receive.
- Step 3: Add the value of any gold, silver, investments, and trade goods you own.
- Step 4: Subtract any immediate debts and liabilities — rent due, bills due, loan repayments due now.
- Step 5: Check if the remaining total exceeds the nisab threshold. Use our Zakat calculator for the live nisab based on current gold and silver prices.
- Step 6: If it exceeds the nisab, pay 2.5% of the total as Zakat.
A Practical Example
Suppose your financial position is:
- Current account: £3,500
- Savings account: £12,000
- Cash ISA: £5,000
- Cash at home: £500
- Gold jewellery: £4,000
- Credit card debt due: -£1,200
Total eligible wealth: £3,500 + £12,000 + £5,000 + £500 + £4,000 - £1,200 = £23,800
The silver nisab is approximately £1,115 (check the live nisab for today's exact figure). Since £23,800 exceeds £1,115, Zakat is due.
Your Zakat: £23,800 x 2.5% = £595
Do I Pay Zakat on Money I Need for Bills?
A common question. The short answer: you deduct immediate debts and obligations — bills due now, rent due now, loan repayments due this month. You do not deduct your entire mortgage or future rent for the year.
If you have £20,000 in savings but £800 in bills due this month, your zakatable amount is £19,200, not £20,000.
Scholars differ on how far ahead you can deduct liabilities. The safest approach is to deduct only what is due immediately and consult a scholar for complex situations.
Zakat on ISAs
ISAs are tax-efficient savings wrappers, but the tax benefit has no bearing on Zakat. The money inside your ISA is still your wealth and is fully zakatable. Whether it is a Cash ISA, Stocks and Shares ISA, or Lifetime ISA — the balance counts toward your total eligible wealth.
When to Pay
Your Zakat is due once a full lunar year has passed since your wealth first exceeded the nisab. Many Muslims choose a fixed date each year — often during Ramadan — to simplify the calculation. On that date, take a snapshot of all your assets and liabilities, calculate the total, and pay 2.5%.
Pay With Confidence
At Deen Relief, your Zakat is handled with a 100% Zakat policy. Every penny reaches eligible recipients, verified by our trustees before funds are released. Use our Zakat calculator to estimate your Zakat, or pay your Zakat now.