Zakat on savings and cash is one of the most commonly owed forms of Zakat. Unlike Zakat on gold (which requires purity adjustment) or business assets (which requires separating trading from fixed assets), Zakat on cash has a simple core rule: 2.5% of all liquid wealth above the Nisab, held for a complete lunar year (Hawl). The challenge is knowing which accounts to include, what deductions are permitted, and how to handle fluctuating balances.

What Counts as Zakatable Cash?

All of the following are included in your zakatable wealth on your Zakat date:

Current and savings accounts — every rupee in any bank account, regardless of whether it earns interest. If you receive bank interest (haram), you must dispose of it to charity separately, but the principal balance remains zakatable.

Cash in hand — physical currency in your wallet, safe, or anywhere you hold it.

Fixed deposits and term deposits — the full value is zakatable even if the deposit has not yet matured. Inability to access immediately does not exempt it.

Money lent to others — if you have lent money and reasonably expect to recover it, include it. Doubtful debts (where recovery is uncertain) may be deferred until recovered.

Cheques and drafts — money represented by a signed cheque you hold counts as your wealth.

What Is the Nisab for Cash?

Nisab is not a fixed currency amount. It equals the current market value of 85g of gold or 595g of silver. Since the silver Nisab is lower in monetary value, most scholars in Pakistan and South Asia use it as it is more inclusive. Check today's silver price, multiply by 595, and that is your Nisab. If your total zakatable wealth exceeds this, Zakat is due.

Example: If silver is PKR 300 per gram, Nisab = 595 x 300 = PKR 178,500.

The Hawl Condition

The Hawl (one full lunar year above Nisab) applies to your overall wealth position, not to individual accounts. The simplest approach: choose a fixed annual Zakat date (many choose 1st Ramadan) and calculate all zakatable wealth on that date. You do not need to average monthly balances or track every fluctuation during the year.

Permitted Deductions

You may deduct immediate short-term debts — liabilities due and payable now or within the next month or two. Examples: this month's rent, an overdue utility bill, a loan installment due immediately.

You may not deduct: the full outstanding mortgage balance, future expenses you plan but have not committed to, or long-term loan balances beyond the current installment.

Worked Example

On your Zakat date: PKR 400,000 in savings, PKR 50,000 in current account, PKR 30,000 cash at home, PKR 200,000 fixed deposit, PKR 100,000 lent to a friend (collectible), PKR 20,000 credit card bill due this month.

Total = 400,000 + 50,000 + 30,000 + 200,000 + 100,000 = 780,000. Less immediate debt = 780,000 - 20,000 = 760,000. Zakat due = 760,000 x 2.5% = PKR 19,000.

Common Mistakes

Do not subtract your full mortgage balance — only the current installment due. Do not exclude savings earmarked for Hajj or a wedding — they are zakatable until actually spent. Do not forget foreign currency accounts — convert at the current exchange rate and include the full balance.

Conclusion

Zakat on cash and savings is 2.5% of net liquid wealth above Nisab, calculated once a year on your chosen Zakat date. Choose a date, stick to it, include all cash and liquid assets, deduct only immediate payable debts, and pay on the net figure.