Yes. In Canada, interest you earn in a regular savings account is taxable income. You have to report it on your tax return as “interest and other investment income,” even if it’s just from a basic savings or high interest savings account.
The same applies to interest from chequing accounts, non-registered GICs, and most online/high-interest savings products.
A savings account that actually grows savings
How Savings Account Interest is Reported
Each year, your bank may send you a T5 Statement of Investment Income if your total interest is at least $50. This slip shows how much interest you earned and helps you report it correctly on your tax return.
Even if you don’t get a T5 (for example, because you earned less than $50 in interest), the CRA still expects you to report all interest income you earned that year.
The interest is then taxed at your marginal tax rate along with your other income.
Earn up to 3.5% interest on every dollar
KOHO High Interest Savings
With KOHO High Interest Savings, you can:
Earn a competitive high interest rate on your balance
Keep your money flexible and easy to access through the app
Use it as a hub for goals like an emergency fund, travel, or a future purchase
When Savings Interest Is Not Taxable
Interest is not taxable when it’s earned inside certain registered accounts, such as a Tax-Free Savings Account (TFSA). In a TFSA, investment income (including interest, dividends, and capital gains) generally grows tax-free, and withdrawals are not taxed.
That’s different from a regular savings or high interest savings account, where interest is taxable every year.
Quick Tips for Handling Tax on Savings Interest
Keep your statements and any T5 slips you receive
Report all interest, even if it’s under $50 and no slip is issued
Remember that higher interest still helps you build savings faster, even if it’s taxable
Consider how registered (TFSA/RRSP) vs non-registered accounts fit into your overall plan