Zakat on money invested in an Islamic bank which distributes the profits every quarterly
28-2-2007 | IslamWeb
Question:
PLease advise as i have invested my money into islamic bank (DIB) under investment depsoit scheme which distributes the profit every querterly, I have splited the total amount in intervals of one month or three moths from that total amount i have utilised some amount and the remaining amount is due to complete one year in months time. do i have to pay zakah on profit recieved or on the total remaining balance with bank. as bank posses my money with them since begning and not in my current or saving account? thanks a lot in advance.
Answer:
All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger. We ask Allaah to exalt his mention as well as that of his family and all his companions.
You are obliged to pay Zakat on your cash money whether it is deposited in a bank or elsewhere, and also on tradeable items and on gold and silver if the total of all this reaches the Nisaab (i.e. the minimum amount liable for Zakat), and a whole lunar year elapses on it. The Nisaab is the equivalent of 85 grams of pure gold or 595 grams of pure silver. Therefore, one is obliged to pay 2.5%. The profit which you got from this money deposited for investment follows its origin, so you are obliged to pay Zakat on it in the same way you are obliged to pay Zakat on the deposited money.
The lunar year for the profits is the same as that for the original deposited money, whether you left the profit in the bank or withdrew as long as it is in your possession and you did not consume it. However, if you consumed it before a whole lunar year elapses on it, then you are not obliged to pay Zakat on it.
For more benefit, please refer to Fatwa 92234.