How to Pay the Zakah of Invested Funds in Islamic Banks

Question:
An amount is invested in al-Faisal Islamic Bank; what is the ruling regarding its zakah?

Answer:
Funds are invested in any place; if a lunar year has passed over them, they are subject to zakah, whether in al-Faisal Bank or any other bank. All of them, if a lunar year has passed over them, are subject to zakah, as are their profits. However, one must not place them in interest-bearing accounts, but rather in lawful profits. One may place them in cars, in houses, or in farms. Each person pays zakah on the principal of the wealth and on the profit.
As for placing them in interest-bearing banks for interest, such as a certain amount every year, or 5% or 10% every year, this is prohibited. This is forbidden riba. However, he must pay zakah on the principal of the wealth, and the excess is not his; rather, it is riba. He must abandon interest-bearing banks.
Therefore, it is not permissible to cooperate with interest-bearing banks. Indeed, Allah says: [Al-Ma'idah: 2], and the Messenger of Allah (peace and blessings be upon him) cursed the one who consumes riba, the one who gives it, the scribe, and the two witnesses, and said: They are all equal. He cursed them because they cooperate in sin and transgression. He cursed these people because of their cooperation in sin and transgression. We seek refuge in Allah.