How is zakat paid on money invested with a friend, and what is the method for calculating zakat on money placed in a savings account with an Islamic bank? Is zakat calculated on the profits of these funds, or on the entire principal?

Whoever possesses the nisab (minimum threshold) of wealth, and a hawl (full lunar year) has passed on it, zakat becomes obligatory upon him. The nisab for money is equivalent to 85 grams of gold or 595 grams of silver, and the amount of zakat is a quarter of a tenth (2.5%). If the money is invested in a company or an Islamic bank, the profit is subject to zakat along with the principal, and its hawl is the hawl of the principal. Ibn Qudamah said: "This must be combined with what he has of its principal, so its hawl is considered with its hawl. We do not know of any disagreement on this." Thus, upon the completion of the hawl, zakat is paid on the entire principal and the profit accrued up to that time.