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Savings Interest Calculator

See the interest on a high-interest savings account or GIC, and what you keep after tax, or all of it in a TFSA.

$
%

A year (p.a.), as advertised

$

Interest you keep

$304.16

After 1 year at 3% p.a. (3.04% a year with interest on interest)

Balance at the end
$10,304
Tax on the interest
$0.00
Your balance at the end
  • Money you put in$10,000
  • Interest you keep$304

What this means

After tax, your savings earn about 3.04% a year. With prices rising around 2.5% a year, that’s about 0.5% a year more than inflation.

Shopping around pays: a rate just 0.5% higher would earn you $51.51 more after tax over 1 year.

Interest outside a TFSA or RRSP is taxed in full at your combined federal and provincial rate, which varies by province.

Next step

Breakdown

PeriodInterestTaxBalance
1 year$304.16$0.00$10,304

What a better rate is worth

  • 2%$201.84 after tax
  • 2.5%$252.88 after tax
  • 3%$304.16 after tax
  • 3.5%$355.67 after tax
  • 4%$407.42 after tax
Assumptions in this estimate
  • The rate stays the same for the whole period. Savings account rates can change at any time; fixed-term rates are set when you open the account.
  • Savings accounts add interest monthly. A GIC adds it at the end of the term, or each year on terms over a year.
  • Tax is worked out on each year’s interest and taken from the balance, as when tax is deducted at source.
  • Money added each month goes in at the end of the month.
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How the calculator works

  1. Amount and rate: what you put in, and the yearly rate the bank quotes.
  2. Type of account: a savings account adds interest monthly, and you can add money each month. A GIC fixes the rate for the term.
  3. Tax: in a TFSA, or your approximate combined tax rate if it isn’t.

Example

$10,000 at 3% a year for a year in a savings account that pays interest monthly:

In a TFSA Taxed at about 30%
Interest $304.16 $304.16
Tax $0 $91.25
Interest you keep $304.16 $212.91

Because interest is paid monthly and then earns interest itself, 3% a year works out to 3.04%.

Getting a better rate

  • Compare rates: online banks and credit unions often pay more than the big banks, and promotional rates usually end after a few months.
  • Use your TFSA first: at a 30% tax rate, 3% a year becomes about 2.1% outside a TFSA.
  • Match the account to the goal: keep your emergency fund where you can reach it, and consider a GIC for money you won’t need for a while.

For longer-term growth, try the compound interest calculator.

Last updated

Frequently asked questions

How much interest will $10,000 earn?

At 3% a year, paid monthly, about $304 in a year. In a TFSA you keep all of it. Outside one, at a combined tax rate of about 30%, you keep about $213.

How is interest taxed in Canada?

Interest outside a TFSA or RRSP is taxed in full at your combined federal and provincial rate. Unlike capital gains and Canadian dividends, it gets no tax break. Interest on a GIC that pays at the end must still be reported each year.

Why keep savings in a TFSA?

Interest in a TFSA is tax-free, and so are withdrawals. You can put in $7,000 in 2026, plus any unused room from earlier years.

Should I choose a savings account or a GIC?

A high-interest savings account lets you take money out at any time, but the rate can change. A GIC fixes the rate for a term, usually 1 to 5 years, and most can’t be cashed before the end.

Is my money protected?

CDIC insures eligible deposits at member banks up to $100,000 per category, such as savings, TFSAs and RRSPs, including GICs. Credit union deposits are protected by provincial schemes.