I have some money saved in a bank account but the interest is less than 1% a year. Should I still pay zakat on it?
Al Salamou Alikoum
I have saved money that brings in about 1-1.5% per year. Less than zakat on money of 2.5 %; should I still pay 2.5% as zakat and have the main capital go down because of Zakat? Or what would be the solution given that I have no possibility to invest this money in a business or otherwise?
It is obligatory to pay one quarter of a tenth (i.e. 2.5%) of the original sum deposited in a bank if it meets the following conditions:
- If it has reached nisab (minimum amount upon which zakat is due). Nisab equals 85 grams of 21 carat gold according to current market price.
- One lunar year passes over its possession.
- It is void of debt and other rights.
- It surpluses one's basic needs.
According to an opinion of some scholars, it is permissible to pay one tenth of the interest as zakat on the original sum, regardless of its total value, or the passage of one lunar year over its possession. There is no objection to following this opinion upon necessity.