Zakat On Fixed Deposit
The principle is that for zakat to be due on an asset, it has to be at one’s disposal (tassaruf). If an asset is contractually tied up, as in fixed deposit, then zakat doesn’t become due until distribution. That said, bank fixed deposit schemes may not exactly be permissible. For details, please see: Discussion 46490
Faisal, I have been following the subject of Zakat for a while and I get more and more confused and I feel like there is something missing. A person saving in a bank or at home pays 2.5% Zakat year after year and looses money to inflation too while another person binds up his savings yearly in an investment contract, for example 10 years, doubles his money and pays no Zakat but only when he can cash out a portion of it each year when it matures? Something is not adding up. The above is just for argument and fairness in this World sake otherwise I understand that Zakat is for Allah and it is an investment in the eternal life. Thus the one who paid Zakat each year is far better off at the end.
Thanks Faisal. I think it is a separate topic. I will create a question separately to discuss if inflation is a tax or equivalent to a tax.