Zakat on bank deposits
The inquirer says: Two years ago I deposited a sum of money in the amount of 11,000 EGP in Faysal Islamic Bank. I was to receive quarterly dividend (Ar. ‘ā’id) on this amount, which would help with every-day, necessary expenses, since my income does not cover these necessary expenses.
He asks: Am I required to pay zakat on the sum deposited in the bank for these past two years? What is the amount for each year?
Zakat is a religious duty and one of the five pillars of Islam. It is an obligation owed from a Muslim’s money. It is obligatory when the property reaches the minimum amount established in the Shari‘ah upon which zakah is owed (Ar. nisāb), and after the passing of one lunar year. This applies is when one is free of debt and it is superfluous to the needs of the person paying zakat to his dependants. The legal minimum amount is the equivalent in value to 85 grams of 21 carat gold, based on the current price at the time zakat is paid.
Based on the above and in reference to the question: the inquirer must pay zakat on the entire deposit. Zakat does not have to be paid on the dividend so long as it is spent immediately on his livelihood expenses. Zakat must be paid for the two years wherein he did not pay it, to absolve himself before Allah the Almighty. The value of zakat equals one quarter of a tenth, which is 2.5%.
Allah Might and Majestic knows best.