Ramadan or No Ramadan: Don't forget Zakat on Wealth

Salam (Peace be upon you),

Please don't forget to pay your zakat on wealth (e.g. savings, mutual funds, fixed deposits etc), even after Ramadan, to those in need. Below is a short summary of some forms of wealth, alongside some links.

1. Savings a/c: Identify the lowest balance in the lunar year. If more than 1 savings a/c is held, don't forget to combine the differing sums before comparing w/ the nisab (See link)

2. Fixed deposits: Since fixed deposits are likely to be left invested for 1 year or more, the amount held for 1 lunar year is zakatable at 2.5%.

3. Mutual funds: Although I haven't come across fatwas on mutual funds, its near-similarity to stocks can be argued that the approach to zakat on shares = zakat on mutual funds. In 1988, the OIC Fiqh Academy notes that company shares purchased for trading purposes are treated similarly to trading on business inventory. In other words, 2.5% of the market value of shares is used to compute the zakatable amount [Those interested in the zakatability issue of the monthly mutual fund payments could read up Yusuf Al Qardawi's writeup (See p. 72 of this volume).

4. Money lent: Different scholars have different views (See p. 58 of Al-Qardawi's volume 1 for a short, succinct discussion).

5. Money saved up in a family takaful plan: These types of takaful generally places some portions of premiums as savings. Try asking them of your policies 'surrender value', i.e. how much you currently have in that policy. If it's yours & potentially withdraw-able, isn't it eligible for zakat too? (See link)

Don't forget that the 2.5% zakat rate is applicable on financial assets for a lunar year (i.e. using Islamic/ Hijrah calendar). Monzer Kahf notes that if zakat is paid following a solar year (e.g. Gregorian calendar), the rate should be adjusted to 2.5776%, since the lunar year is shorter than the solar year, by around 11 days or so (See p. 13 of this booklet).

My thoughts only.

Eid Mubarak.