I have a bank deposit which is considered my main source of income. I receive a quarterly dividend (Ar. ‘ā’id), should I pay zakat on the original deposit or just on the dividend?

The principal is that the value of zakat equals one quarter of a tenth, which is 2.5% of the original deposit, when the property reaches the legal amount and after the passing of one lunar year.

Some of the contemporary scholars believe that the zakat on the money deposited in a bank, and which its owner uses in living is owed on the dividend only. This is an independent scholarly opinion (Ar. ijtihad) based on the fact that the money deposited on bank is the same as the zakat owed on what a plot of land produces, recognizing that both of them are a source of income for the other and any decrease in the two could harm him.

Based on this, it is permissible for the depositor to settle paying one tenth of the dividend of the money deposited in the bank, (without considering the passing of one lunar year). This will suffice for the zakat on the money according to some of the scholars.