Zakat on Savings

[Zakat in Practice (part 9) ]

[Introduction: This series is a sharing on zakat from the perspective of a financial planner. It is hoped to be educational, informative as well as practical to help readers better understand Zakat, especially Zakat on Wealth, as a Muslim in Singapore.

Topics to include: Zakat on Investment, Zakat on Savings, and Zakat on Estate.]

[Previously: Zakat on Gold]

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Zakat on Savings comes in 2 forms:

1. Savings in the bank
2. Savings plan with insurance companies

Savings in the bank can be further categorised as:

1. Accessible
2. Non-accessible

By accessible, they are accounts that one can easily withdraw his money from, such as:

• Savings account
• Current account

By non-accessible, they are accounts that are usually “locked in” for a certain period or tenure, such as:

• Fixed deposit

Each of these accounts require a different approach in gauging when zakat is due/liable.

It is a common mistake and misunderstanding to regard them as the same, or to combine the amounts in all those accounts together and paying zakat on the total amount.

(To be continued)