Calculating Zakat on savings with interest added to it every 6 months

How I will calculate the Zakaah every year. Please note that I have a fixed deposit in a bank run with Islamic procedure. This deposit is tied for 5 years. Bank is calculating the profit every 6 months and adding to my principal amount and thus the amount is increasing. The rate profit is as declared by bank's management in keeping with the business. But, if I want to encase the amount anytime before maturity the bank will apply the profit as per the saving a/c rate as declared time to time which is always smaller that the  fixed deposit profit.  Now 1) During this period fixed deposit tied for 5 years how will I pay the annual Zakaah.

2) Bank has given another option that I may collect from the bank the profit generated by the principal amount every half-yearly. In this way my principal amount will not grow i.e. will remain the same till maturity because profits applied time to time were eaten up by me. What will be my annual Zakaah in this case in such option also? I remind you that this is an Islamic bank. Please guide. Allaah will bless you for the help. Calculating Zakaat on savings with interest added to it every 6 months

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger. We ask Allaah to exalt his mention as well as that of his family and all his companions.

 

It appears from your question that this deposit is in reality an investment deposit or what is called a business certificate.

We have already issued Fatwa: 84586 explaining the ruling of investment certificates, their kinds, and the conditions for their permissibility, so please refer to the Fatwa for more benefit.

If the deposit that you are inquiring about is free from any religious prohibition then Zakat has to be paid on it and on the profit thereof when a complete year elapses on the capital money which you did not spend during the year, based on two conditions:

1)     It should reach the minimum amount liable for Zakat by itself or with other money, tradable items, gold or silver added to it.

2)     A whole lunar year should have elapsed on it.

Therefore, if it reaches the minimum amount liable for Zakat and a whole lunar year has elapsed on it, then Zakat has to be paid on it at each year when these two conditions are met. The rate of Zakat is 2.5%. For more benefit on Zakat on invested money, please refer to Fatwa: 83529.  

 Allaah knows best.