Is Zakat payable on Fixed Term Deposit accounts in Islamic Banks managed under Wakalah?
In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.
After discussing with the Shariah scholars at Islamic banks, we understand that in many Fixed Term Deposit Accounts, monies taken from the liability’s side of Islamic banks are generally invested in commodities, Sukuk as well as Home Purchase Plans in the asset’s side of the bank. These investments are for resell and capital gain purposes. A Wakalah fee is charged for the service provided in managing the funds of the depositors and the depositors are given profit in return.
The entire holding in such an account is subject to Zakat as the funds are used to buy commodities to resell for capital gain. If the funds are utilised in non-Zakatable assets, the answer will be different.
And Allah Ta’ālā Alone Knows Best
Mufti Faraz Adam
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