Cash and Savings in Zakat

All cash counts toward your zakatable wealth. Cash includes: money in your wallet, cash at home, current accounts, savings accounts, and any other liquid funds you can access. It does not matter whether the money is earning interest (which is haram) or just sitting idle—if you own it, it is zakatable. Savings accounts, ISAs, and fixed-term deposits all count. Even if the money is locked away for a year, it is still yours, and Zakat is due on it. The only exception is if you cannot access the money at all (for example, money frozen by a bank or government).

Money for bills or expenses is still zakatable. Some people ask: 'I have £5,000 in my account, but £2,000 is for rent and bills next month. Do I pay Zakat on all of it?' The answer is yes. Zakat is calculated on what you own on your Zakat date, not on what you plan to spend. Islam recognizes that you will use your wealth throughout the year. The one-year hawl requirement ensures you are not paying Zakat on money you just received. If you have held money for a full year, it is due for Zakat, even if you intend to spend it soon.

Add up everything and apply 2.5%. On your Zakat date, check all your bank accounts, count cash at home, and include any money in savings or investments. Add it all together. Then multiply by 0.025 to find your Zakat. For example: £3,000 in your current account + £7,000 in savings + £500 cash at home = £10,500 total. Your Zakat is £10,500 × 0.025 = £262.50.