Is Zakat Owed on a Child Trust Fund?

Zakat on a Child Trust Fund (CTF) depends on the specific school of thought followed and the type of account in question. 

In the Hanafi school, Zakat is not obligatory on the wealth of prepubescent minors. However, in the Shafi’i, Maliki, and Hanbali schools, Zakat is required on the assets of minor children. 

Thus, in the Hanafi school, Zakat would only be due on a Child Trust Fund once the child reaches maturity and puberty.

There are three main types of Child Trust Funds:

1. Stakeholder Account: These accounts invest children’s savings in a broad range of stock market options. The rules of stakeholder accounts limit charges to 1.5% annually, and the investments become less risky after the child turns 13.
2. Shares Account: In this type, the parent or guardian can either select a specific investment fund or hand-pick individual stocks for their child's savings.
3. Savings Account: Unlike the other two, these accounts don’t involve stock investments but accrue interest.

When it comes to the Stakeholder and Shares CTFs, Zakat is due on the Zakatable assets within the fund. This means you calculate the Zakat based on the proportion of assets that are liable for Zakat, such as stocks or business assets. 

For a Savings CTF, Zakat is owed on the total amount, excluding the interest. All interest earned must be given away to charity, and ideally, one should transfer to a Shariah-compliant CTF to avoid interest accumulation.

The timing of Zakat's payment is important. After the child reaches maturity, Zakat should be paid annually on the CTF, even before the funds can be accessed. If payment is delayed until the funds are accessible, Zakat must be backdated for the years missed.

And Allah knows best!