Zakat on Cash & Savings
Calculate 2.5% Zakat on current accounts, savings, fixed deposits, and cash at home. In India zakat is entirely self-assessed, and this guide walks through the whole calculation.
Key Takeaways
- Cash and bank balances are the most straightforward Zakat assets
- Pay 2.5% on all cash held above nisab for one full lunar year
- India has no bank deduction or state zakat system; the whole calculation is yours
- Include cooperative society deposits and refundable share money in your cash total
- Bank interest is not kept: give it away entirely as purification, separate from Zakat
What Cash Is Subject to Zakat?
All cash and cash equivalents that you own and have held for a full lunar year (hawl) are subject to Zakat, provided your total wealth exceeds the nisab threshold. This includes:
Cash set aside for specific purposes may have different treatment depending on scholarly opinion. Some scholars exclude cash earmarked for immediate expenses or debts. Always verify with qualified Islamic scholars.
How to Calculate Zakat on Cash
Add up all cash holdings
Sum current accounts, savings principal, fixed deposits, cooperative society deposits, wallet balances, and physical cash in all currencies.
Convert foreign currencies
Convert dollar, pound, or other foreign holdings (including NRE and NRO balances) to rupees at the current rate.
Check against nisab
Nisab is the value of 87.48 grams of gold or 612.36 grams of silver. Check today's rates or use our calculator; your total wealth must have stayed above it for a lunar year.
Calculate 2.5%
If above nisab, multiply your total cash by 0.025. Set accrued bank interest aside separately: it is purified in full, not counted in the 2.5%.
Quick Zakat Estimate
Enter the total value of your cash & savings to calculate
Zakat Due
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Full detailed calculatorSelf-Assessment: The Whole System in India
India has no state zakat collection and no bank deduction. Unlike some Muslim-majority countries where zakat is deducted at source, nothing happens automatically here: you choose a zakat date, calculate 2.5% of your zakatable wealth, and distribute it yourself. That makes consistency the discipline that matters. Fix a lunar date (1 Ramzan and 1 Muharram are common choices), value everything on that date each year, and keep a simple record.
For distribution, you can give directly to eligible recipients, through your mosque, or through zakat-native platforms: IndiaZakat.com crowdfunds Sharia-screened causes at 0% commission with 80G tax receipts, and the Zakat Foundation of India runs institutional programs funded by zakat, also 80G-registered.
Timing and the Hawl Requirement
Zakat on cash is only due if your wealth (including cash) has been above the nisab threshold for a full lunar year (hawl, 354 days). If your cash balance fluctuates but remains above nisab throughout, calculate Zakat on the amount at the end of your Zakat year.
Important
If your wealth drops below nisab at any point during the year, the hawl period resets. You must start counting again once your wealth exceeds nisab.
Special Considerations
Bank interest
Interest earned at a conventional bank is haram. Give it all away, separate from Zakat; it does not count toward your Zakat.
Cooperative deposits
Interest-free society deposits (amanah or qard accounts) are your money in safekeeping. Include them, plus refundable share money you expect back.
Committee (BC) savings
Money you have paid into a rotating savings committee is a receivable; most scholars include amounts you expect to recover.
Joint accounts
Calculate Zakat only on your share of jointly held accounts.
Quick Answer
Zakat on cash and savings is 2.5% of your total liquid assets held for one lunar year, provided the amount exceeds the nisab threshold (the value of 87.48 grams of gold or 612.36 grams of silver). India has no bank deduction or state zakat system, so the whole calculation and distribution is your own: value everything on your fixed lunar date, pay 2.5%, and purify any bank interest separately by giving it away in full.
Key Takeaways
- 2.5% is the standard Zakat rate on cash holdings
- Nisab is the value of 612.36 grams of silver (or 87.48 grams of gold); check current metal prices
- Includes current accounts, savings principal, fixed deposits, cooperative society deposits, and physical cash
- India has no automatic deduction; zakat is entirely self-assessed and self-distributed
- Bank interest is given away entirely as purification, separate from Zakat
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Reviewed by: HalalWallet Editorial Team
Last reviewed: 2026-03-06
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Frequently Asked Questions
Does my bank deduct Zakat automatically in India?
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No. India has no state zakat collection and no bank deduction system. Zakat here is entirely self-assessed: you calculate 2.5% of your zakatable wealth on your own zakat date and distribute it yourself, directly or through a platform such as IndiaZakat.com or the Zakat Foundation of India.
What if my balance changes during the year?
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Zakat is based on your balance on your Zakat anniversary date. As long as your total wealth stayed above nisab throughout the lunar year, Zakat is due on what you hold on that date.
Do I include current and savings accounts?
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Yes, both count: current accounts, savings accounts, fixed deposits, UPI wallet balances, and physical cash. Include the principal in your zakatable total. Interest credited on a savings account is treated separately: it is not yours to keep and is given away entirely as purification.
What about foreign currency accounts?
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Convert foreign currency holdings, including NRE or NRO account balances, to rupees at the current exchange rate on your Zakat date, then include them in the total.
Are cooperative society deposits zakatable?
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Yes. Deposits at interest-free cooperative societies such as Al-Khair, Bait-un-Nasr, or Janseva are your money held in safekeeping (amanah or qard), so include them in your cash total at full value, along with any refundable share money you expect back.
What do I do with interest my bank has paid me?
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Interest from a conventional account is not halal income. Most scholars advise giving it all away to charity without expecting reward, separate from and in addition to your Zakat. It does not count toward your 2.5%. To stop accruing it, keep transactional money in a current account, which pays nothing by regulation.
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