Is zakat obligatory on money in the bank that has been there for a year and from which monthly deductions are made to pay household expenses and bills?

It is not permissible to deposit money in interest-bearing banks unless there are no Islamic banks available, and commercial insurance is forbidden. Zakat is obligatory on money if it reaches the nisab (the equivalent of 595 grams of silver) and a full year has passed over it, even if it is earmarked for expenses. It is not a condition for Zakat to be obligatory that the money be surplus to one's needs.