Question:

1. I have both current & savings account in a bank. I would like to know that zakat is payable to savings account only or both on current & savings accounts, at the end of the year.
2. Further where shall I give/spend interest money from the bank?

Answer:

In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ʿalaykum wa-rahmatullāhi wa-barakātuh.

وَأَقِيمُوا الصَّلَاةَ وَآتُوا الزَّكَاةَ وَارْكَعُوا مَعَ الرَّاكِعِينَ

Establish ṣalāh, give zakāh, and bow with those who bow. Surah al-Baqarah 43

Allah has commanded zakāh on every free, responsible (mukallaf) Muslim who has complete ownership over the minimal amount of wealth (niṣāb) upon which zakāh is levied.[i] Current and savings accounts are included in this definition. One should dispense their zakāh from both accounts by their individual zakāh date each year. 

وَأَحَلَّ اللَّـهُ الْبَيْعَ وَحَرَّمَ الرِّبَا

Allah has permitted trade and prohibited interest (al-ribā). Surah al-Baqarah 275

Allah has clearly prohibited al-ribā. The definition of al-ribā in the Sharī`ah is a trade in which there is a stipulated gain for one of the participants in return for nothing.[ii] A savings account accrues impermissible interest. If possible, it should be closed, and the monies transferred to a non-interest accruing account to avoid the sin and keep one’s wealth as pure as possible.

Any interest money can be given to zakāh eligible individuals without intent for reward. In other words, it does not count as ṣadaqah or zakāh. Rather, it is a means to rid oneself of unclean and impermissible money. [iii] It can also be used in general welfare projects. However, it is better to benefit needy Muslims directly.[iv]

And Allah Ta’āla Knows Best

Mufti Faisal bin Abdul Hameed al-Mahmudi (S1)
www.fatwa.ca  

[i] فتح باب العناية بشرح النقاية، ج 2 ص5-6، مكتبة التراث والعلوم العربية

لا تجب الا على حر مكلف مسلم مالك ملكا تاما لنصاب نام

 شرح مختصر الطحاوي، دار البشائر الإسلامية، 2:229

قال أبو جعفر: (وليس فيما دون خمس من الإبل صدقة، فإذا كانت خمسًا سائمة قد حال عليها الحول، وهي كذلك في ملك من هي له، من رجل أو امرأة، من البالغين الأحرار المسلمين

[ii] فتح باب العناية بشرح النقاية، ج 2 ص693، مكتبة التراث والعلوم العربية

وشرعاً: (فَضْلٌ خَالٍ عَنْ عِوَضٍ) أي لا يقابله عوض في معاوضة مالٍ بمالٍ (شُرِطَ لأحَدِ المُتَعَاقِدَيْنِ في المُعَاوَضَةِ).

[iii] Contemporary Fataawa p160, Published by M.S. Omar, Jan 2000

[iv] فتاوی رحیمیۃ، ج۹ ص۲۸۰، دار العشاعت، بحوالہ مفتی کفایۃ اللہ