Zakat Guides

Zakat on Cash & Savings

By the Editorial Team · reviewed against our sources · updated September 2026 · guidance, not a fatwa

Is zakat due on cash and bank balances?

Yes. Cash is the most straightforward form of zakatable wealth. Because money is a store of value that can grow, all liquid money you own is subject to zakat at 2.5% once you reach the nisab and a full lunar year (hawl) has passed. This applies whether the money sits in your wallet, under a mattress, or in a bank account. The rate of 2.5% (one-fortieth) is agreed across the Hanafi, Maliki, Shafiʻi and Hanbali schools. You can total your balances and apply the rate yourself, or enter the figures into our zakat calculator for an instant result.

What counts as zakatable cash?

For zakat purposes, “cash” means any money you own and can access. That includes:

• Physical banknotes and coins at home or in a safe.
• Balances in current (checking) accounts.
• Balances in savings accounts.
• Fixed deposits, term deposits and certificates (the principal you own).
• Money in digital wallets and prepaid balances you can withdraw.
• Money people owe you that you expect to be repaid (a strong debt), which is treated like cash in hand.

Money you are confident will not be repaid (a bad debt) is usually excluded until you actually receive it. If you owe money yourself, scholars differ on how much debt may be deducted; a common contemporary approach is to subtract only immediate, due liabilities such as this month’s bills or a payment due now, rather than the full balance of a long-term loan. See our calculation guide for how deductions are handled.

Current, savings and fixed deposits

All three are treated the same for the zakatable principal: you pay 2.5% on the amount of your own money held. A fixed deposit is still your wealth even though it is locked for a term, so its principal is zakatable each year it exists. The complication is any interest a savings or fixed-deposit account pays — covered below. Only the money that genuinely belongs to you is counted; you never pay zakat on interest, because you do not keep it.

Foreign currency

If you hold money in more than one currency, convert each foreign balance into your home currency using the exchange rate on your zakat due date, then add it to the rest of your cash. For example, if you hold the equivalent of 3,000 in a foreign account and 5,000 locally, your zakatable cash is 8,000, and zakat is 8,000 × 0.025 = 200.

Money saved for a goal

A common misunderstanding is that money earmarked for a specific purpose — a house deposit, a wedding, a car, or hajj — is somehow exempt. It is not. As long as the money is in your possession on your zakat date and you meet nisab, it is fully zakatable, regardless of what you plan to spend it on. The obligation attaches to wealth you hold, not to your intentions for it. Only money that has already left your ownership (genuinely spent or given) is outside the calculation.

Interest (riba) and why it is excluded

Interest earned on savings or deposits is riba, which is prohibited in Islam. It is not lawful wealth for you to keep or benefit from, so it does not form part of your zakatable assets. The mainstream guidance is to dispose of interest by giving it to those in need — without intending it as a rewarded charity and without using it for your own tax relief or personal benefit — simply to remove impermissible money from your possession. Because you do not keep it, you do not pay zakat on it, and you do not add it to your cash total. Only your lawful principal is zakatable. Many Muslims avoid interest-bearing accounts altogether for this reason.

Worked example

Suppose that on your zakat date you hold the following:

Zakatable cash = 500 + 2,000 + 6,000 + 4,000 + 1,500 − 300 = 13,700. The 90 of interest is set aside to be given away and is not counted. Zakat due = 13,700 × 0.025 = 342.50. Confirm first that 13,700 is at or above the nisab; if you also hold gold or silver, add their value before comparing. Our nisab guide gives the current threshold.

Cash held for business or in a business account

If you run a business, the cash in your business bank account is part of your zakatable wealth, just as personal cash is. It is added to your trade goods and receivables when you calculate business zakat. What matters is ownership, not which account holds the money. Sole traders in particular should be careful not to treat personal and business cash as separate exemptions — both are zakatable if they belong to you. For a full treatment of stock, receivables and business cash together, see our guide to zakat on business assets.

Digital money, stablecoins and prepaid balances

Money held in digital wallets, payment apps and prepaid cards is zakatable if you can access and spend it, because it functions exactly like cash. Balances you cannot withdraw or use — such as non-refundable credits locked to a single merchant — are treated by many scholars as outside your accessible wealth until realised. Stablecoins and other tokens pegged to a currency are generally treated like the cash they represent and valued at their equivalent on your due date, though newer instruments can raise permissibility questions worth checking with a scholar. The guiding test is simple: is this money you own and can readily use? If yes, include it.

Zakat, sadaqah and rounding

Zakat on cash is an obligation with a fixed rate, distinct from voluntary charity (sadaqah), which you may give in any amount at any time. Paying extra sadaqah does not reduce the zakat you owe, and paying zakat does not remove the encouragement to give voluntarily. When you calculate, it is good practice to round your zakat figure up rather than down, so you never underpay the obligation. A few extra units given is charity; a shortfall leaves part of the duty unmet. Keep a simple record each year of the total you assessed and paid, so your figures stay consistent and easy to review.

How the nisab applies to cash

Because cash has no weight, you compare its value to the monetary nisab derived from gold (87.48g) or silver (612.36g). When your wealth is only cash, or a mix of cash and other assets, most contemporary scholars recommend using the lower silver nisab, since a lower threshold means more people become eligible to pay and more is distributed to recipients. If your total wealth is below the nisab, no zakat is due that year.

When is zakat on cash due?

Zakat is due once your zakatable wealth has stayed at or above nisab for a full lunar year. Choose one fixed date each year and total your cash on that day. You do not track each individual deposit separately; you simply take a snapshot of what you hold on your zakat date. If your wealth briefly dipped below nisab mid-year but was above it at the start and end of the year, the year is generally still counted as complete.

Putting it together

Cash is usually the largest and simplest part of a zakat calculation. Total everything you own in money form, exclude any interest, deduct only immediate liabilities, and apply 2.5%. Then add zakat on other assets such as gold, silver and shares to reach your annual total. To do this in one place, use the zakat calculator on our homepage, and read what zakat is if you want the broader picture of this pillar of Islam.

This is general guidance only, not a fatwa; rulings vary by madhhab; consult a qualified scholar for your situation.

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