Zakat on Gold, Silver, and Currency (زكاة النقدين)
Gold and silver are the most important types of wealth subject to Zakat. By extension, modern fiat currency (banknotes and coins) as well as bank holdings follow the same rules.
The Prophet ﷺ said: "Any owner of gold or silver who does not pay its due (Zakat) will have plates of fire made for him on the Day of Resurrection..." — Muslim (987)
1. Wealth Covered
📋 Categories Subject to Monetary Zakat
| Category | Examples | Rate |
|---|
| Gold (الذهب) | Bars, coins, unworn jewelry | 2.5% |
| Silver (الفضة) | Bars, coins, silverware | 2.5% |
| Fiat currency | Euros, dollars, dirhams | 2.5% |
| Bank accounts | Savings, checking accounts | 2.5% |
| Deposits | Savings books, term deposits | 2.5% |
2. Nisab for Gold and Silver
📋 Minimum Thresholds
| Metal | Classical Nisab | Modern Equivalent |
|---|
| Gold | 20 mithqal = 20 dinars | 85 grams of pure gold (24 karat) |
| Silver | 200 dirhams = 5 awaq | 595 grams of pure silver |
📌 Proofs
The Prophet ﷺ said: "There is no Zakat below 5 awaq" — Al-Bukhari (1447)
And he ﷺ said: "There is no Zakat below 20 mithqal of gold" — Abu Dawud (1573)
⚠️ Which Nisab to Use?
| School | Reference |
|---|
| 🟡 Maliki | Most favorable to the poor → usually silver (lower threshold) |
| 🟢 Hanafi | Most favorable to the poor |
| 🔵 Shafi'i | Either gold or silver |
| 🟣 Hanbali | Either gold or silver |
3. Zakat Rate
📌 Quarter of a Tenth (ربع العشر)
| Rate | Fraction | Percentage |
|---|
| ربع العشر | 1/40 | 2.5% |
📌 Proof
The Prophet ﷺ said: "For silver: a quarter of a tenth" — Al-Bukhari (1454)
4. Zakat on Jewelry (زكاة الحلي)
📊 SCHOOLS' POSITIONS
Is jewelry made of gold and silver worn by women subject to Zakat?
| School | Opinion | Argument |
|---|
| 🟡 Maliki | No Zakat on worn jewelry | For use, not hoarding |
| 🟢 Hanafi | Zakat obligatory even on worn jewelry | General texts on gold and silver |
| 🔵 Shafi'i | No Zakat on worn jewelry | Personal use, not accumulation |
| 🟣 Hanbali | No Zakat on worn jewelry | Personal use |
💡 Maliki Position: Jewelry regularly worn by women (or men for permitted silver) is not subject to Zakat because it is meant for use, not wealth accumulation.
📋 Maliki Conditions for Exemption
| Condition | Explanation |
|---|
| Personal use | Worn by the owner |
| Regular wearing | Not stored indefinitely |
| Reasonable quantity | No excess |
| Permissible gold/silver | For women (all), for men (limited silver) |
📌 Cases Where Zakat Applies to Jewelry
| Situation | Zakat? |
|---|
| Jewelry worn regularly | ❌ No (Maliki) |
| Jewelry stored without use | ✅ Yes |
| Jewelry for resale | ✅ Yes (trade) |
| Broken jewelry not repaired | ✅ Yes (hoarding) |
| Prohibited jewelry (gold for men) | ✅ Yes |
5. Zakat on Fiat Currency
📌 Principle
Paper money (banknotes) and coins follow gold and silver rules as they substitute them in transactions.
| Type | Nisab | Rate | Hawl |
|---|
| Banknotes | Equivalent to 85g gold or 595g silver | 2.5% | 1 lunar year |
| Coins | Same | 2.5% | 1 lunar year |
| Bank accounts | Same | 2.5% | 1 lunar year |
6. Zakat on Bank Accounts
📋 Calculation Method
| Step | Action |
|---|
| 1 | Choose an anniversary date (e.g., 1st Ramadan) |
| 2 | Check total balance of all accounts |
| 3 | Verify if ≥ Nisab |
| 4 | Calculate 2.5% of total |
| 5 | Pay Zakat |
7. Case of Debts
📋 Debts You Owe
| School | Is debt deducted from Nisab? |
|---|
| 🟡 Maliki | Debt is not deducted for hidden wealth (money) |
| 🟢 Hanafi | Debt is deducted |
| 🔵 Shafi'i | Debt is not deducted |
| 🟣 Hanbali | Debt is deducted |
📋 Debts Owed to You
| Type of Debt | Maliki Ruling |
|---|
| Secure debt (solvent debtor) | Zakat upon recovery, 1 year only |
| Doubtful debt | Zakat upon recovery, 1 year |
| Irrecoverable debt | No Zakat |
8. Modern Cases
📌 Stocks and Investments
| Type | Zakat Due? | Calculation |
|---|
| Trading stocks | ✅ Yes | Market value × 2.5% |
| Dividend stocks | ✅ On saved dividends | Savings × 2.5% |
| Mutual funds | ✅ Yes | Investment value × 2.5% |
| Cryptocurrencies | ✅ Yes (majority view) | Market value × 2.5% |
🎯 Summary
| Point | Maliki Rule |
|---|
| Gold Nisab | 85 grams of pure gold |
| Silver Nisab | 595 grams of pure silver |
| Rate | 2.5% (quarter of a tenth) |
| Worn jewelry | No Zakat |
| Stored jewelry | Zakat obligatory |
| Currency | Same rule as gold/silver |
| Debts | Not deducted (hidden wealth) |
📚 Sources
- Sahih Al-Bukhari, Book of Zakat, Hadiths no. 1447, 1454
- Sahih Muslim, Hadith no. 987
- Sunan Abu Dawud, Hadith no. 1573
- Al-Muwatta by Imam Malik
- Al-Mudawwana by Imam Malik
- Mukhtasar Khalil
- Ash-Sharh Al-Kabir by Ad-Dardir
- Fiqh Az-Zakat by Al-Qaradawi