Do not assume Premium Bonds are exempt from Zakat because their returns are paid as prizes. Assess the capital you own and establish the treatment of any prize income with a qualified scholar. Tax-free status and religious permissibility are separate questions; prize disposal is not automatically a Zakat payment.
Start with the capital
Record the amount invested that you still own on your Zakat date. Include the eligible capital in your overall wealth assessment rather than treating the prize-draw structure as a blanket exemption. If you cash in bonds and move the funds to your bank, count the same capital once.
Handle prizes separately
The site previously treated prize winnings as ordinary zakatable savings without explaining the permissibility question. That was too broad. Ask how your school or adviser treats the prize income, including whether it must be disposed of separately. Do not automatically offset a disposal payment against your Zakat obligation.
Keep a simple record
If £8,000 of eligible bond capital remains invested and £2,000 eligible cash is held elsewhere, the total before permitted deductions is £10,000. With the relevant conditions met, the attributable 2.5% is £250.
Any prize amount requiring separate treatment should be recorded separately from that example’s eligible capital.
What this guide does not decide
A calculation of Zakat is not an endorsement of a savings product. Ask about the product’s permissibility and treatment of past returns separately from the arithmetic of capital, debts and nisab.
Sources & calculation method
These sources inform this guide. A linked source does not endorse this site, and its publication date may differ from this page’s update date.
Scholarly methods can produce different results. See the method choices that affect a Zakat estimate and our editorial policy. This is educational guidance, not a personal ruling or a claim of named scholarly review.
To cite this guide: “Zakat on Premium Bonds: capital and prizes”, World Aid Network, updated 8 September 2026, https://zakat-calculator.org.uk/zakat-on-premium-bonds