Is there tax on interest earned on money in savings accounts?

By Alicia Human · Updated

Nadine

Nadine said:
25 January 2024 at 9:19

I think my tax return for 2023 was incorrect.
The amount in my ABSA back account pulled through and according to me, I am not supposed to pay tax on interest earned on money in my  savings bank account.

If I am correct, what are the next steps to correct this?
TaxTim Alicia

TaxTim Alicia said:
25 January 2024 at 9:50

Your standard savings account at ABSA and other local investments are all taxable if the total interest you earned for the year is more than R 23 800 (R 34 500 if you are older than 65).

There are however, some investments that won't trigger a tax liability, which are called tax-free savings accounts.
The tax-free investments may only be provided by licensed banks, long-term insurers, managers of registered collective schemes (with certain exceptions), the National Government, mutual banks or co-operative banks, the South African Postbank, administrative financial services providers and persons authorised by a licensed exchange to perform one or more securities services in terms of the exchange rules.

You are only able to invest R 36 000 into a tax-free savings account each year.

Please click here for further information on tax-free savings accounts.