Do I have to pay taxes on my savings account in Canada?

You don't have to pay taxes on savings account deposits in Canada, but you're taxed on interest earned from savings account deposits (unless you have a TFSA or RRSP and don't exceed your annual contribution limit).

How much tax do you pay on interest earned from savings in Canada?

Your interest income tax rate in Canada is the same as your tax rate for other types of income. The rate depends on your tax bracket, which is determined by adding together your total income from all sources and subtracting any applicable tax deductions.

Do you report interest earned in a TFSA or RRSP on your tax return?

No, you don't have to report income earned in a TFSA or RRSP unless you've exceeded your annual contribution limit.

What are the income tax brackets in Ontario?

For the 2025 tax year, income tax brackets in Ontario are as follows: 5.05% on the first $52,886 9.15% on the next $52,886 - $105,775 11.16% on the next $105,775 - $150,000 12.16% on the next $150,000 - $220,000 13.16% over $220,000 For the 2026 tax year, income tax brackets in Ontario are as follows: 5.05% on the first $53,891 9.15% on the next $53,891–$107,785 11.16% on the next $107,785–$150,000 12.16% on the next $150,000–$220,000 13.16% over $220,000

How much money can you have in your bank account without being taxed in Canada?

In Canada, you're not taxed simply for holding funds in a bank account. Rather, you're taxed on earnings generated from bank account deposits. So, there's no limit to the amount of money you can have in your bank account without being taxed in Canada — only the interest or investment income it earns is taxable.

What is nontaxable income in Canada?

Nontaxable income in Canada doesn't have to be reported with your other income and doesn't trigger any income tax. Examples include: GST/HST credits Most types of gifts and inheritances Provincial/territorial compensation paid to victims of crime or motor vehicle accidents Lottery winnings (unless determined to be business or employment income) Most amounts received from a life insurance policy Most types of strike pay that you received from your union

Is promotional or bonus interest taxable?

Yes, all interest earned in a non-registered savings account is considered taxable income.

What happens if I don't report interest income?

If you don't report interest income in Canada, the CRA can reassess your tax return, charge interest on any taxes owed and impose penalties if they believe the omission was intentional or negligent. Even small amounts must be reported, because unreported income can trigger fines and increase the risk of future audits.

Do I pay tax on interest from foreign bank accounts?

If you're a Canadian resident, you must report your worldwide income, including interest earned from foreign bank accounts, on your tax return. If you've already paid tax on that income in another country that has a tax treaty with Canada, you may be able to claim a foreign tax credit to reduce your Canadian taxes, but you still need to report the income.

When is interest on my savings account taxed?

Interest on a savings account is taxed in the year it's credited or paid to you, not when it accrues. This means that even if your account compounds daily but only pays out interest annually, you report and pay tax on the full amount in the year you received it.