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Inflation, fees and tax on savings interest

A savings balance can grow in rand and still buy less. Interest above the exemption can be taxed. Fees come off first.

Reviewed 29 October 2026 by the WiT Money editorial team. This is general information, not a recommendation from a named adviser.

Key points

  • For the 2027 year of assessment, the local interest exemption checked on 28 October 2026 is R23 800 under 65 and R34 500 from 65.
  • The Budget of 25 February 2026 left those amounts unchanged, according to the SARS page used on the savings comparison.
  • Inflation in a calculator is the rate you type. It is not a Statistics South Africa forecast.

If prices rise by 5% and your deposit earns 5% before tax and fees, you have not gained purchasing power. Fees and tax can put you behind. That is not a reason to chase a risky product with next month's rent. It is a reason to know the real shape of a cash return.

SARS allows an annual exemption on South African interest. The savings comparison, checked on 28 October 2026, records R23 800 if you are under 65 and R34 500 if you are 65 or older for the 2027 year of assessment, and notes that the 25 February 2026 budget did not change those amounts. Interest above the exemption can be included in your taxable income. A tax-free investment is a different product, with contribution limits, and is not the same as this exemption.

Fees

Price a normal month: the account fee, card fees and cash deposits. On a small balance the fee can exceed the interest. The bank-fee calculator adds only the charges you enter. A zero is a zero you typed.

Inflation

Statistics South Africa publishes the consumer price index. It changes. The inflation calculator on this site uses your assumption so you can see an illustration. It does not download the latest print.

Questions readers ask

Is all interest tax-free up to the exemption?

The exemption applies to South African interest, within the rules SARS publishes for that year of assessment. Foreign interest and some fund distributions are not automatically the same thing. This page is not a tax return.

Related

Sources

Page updated 29 October 2026. A source date is the day WiT Money checked that page, not a promise the institution has not changed it since.