South African Compound Interest Calculator

Interest income is taxed at your marginal income tax rate (18%–45%), but each individual receives an annual exemption:

• Under 65: the first ZAR 23,800 of local interest is tax-free.
• Aged 65 or older: the first ZAR 34,500 is tax-free.

Interest above these thresholds is added to taxable income and taxed at your marginal rate. There is no separate withholding tax on interest — you must declare it on your annual ITR12 return under source code 4201 (local interest) or 4218 (foreign interest, no exemption available).

The Corporation for Deposit Insurance (CODI) is South Africa's deposit insurance scheme, operational since 1 April 2024. CODI is a subsidiary of the South African Reserve Bank and protects qualifying depositors up to ZAR 100,000 per depositor per bank if a SARB-authorised bank fails.

Coverage is automatic — you do not need to register or apply. All registered banks in South Africa are CODI members. CODI is funded by levies on member banks.

CODI covers capital-guaranteed deposit products, including:

• Savings, current, and transactional accounts
• Fixed-term and notice deposits
• Tax-Free Savings Accounts (TFSA) held in cash with a bank
• Islamic Murabaha deposit products

CODI does not cover investment products such as unit trusts, ETFs, RSA Retail Savings Bonds (those are backed by the National Treasury directly, not CODI), money-market funds, equities, derivatives, or non-bank fintech wallets. Foreign-currency deposits at South African banks are also excluded.

Yes. RSA Retail Savings Bonds are issued and guaranteed by the South African Government via the National Treasury, with the lowest available default risk in the country.

Three product variants are available: Fixed-rate (2, 3, or 5-year terms with rates set monthly), Inflation-linked (capital adjusted by CPI plus a real-rate coupon), and Top-Up (allows additional contributions). Minimum investment ZAR 1,000; maximum holding ZAR 5 million per investor across all RSA Retail Bonds. Interest is taxable (subject to the standard interest exemption). Bonds are not CODI-covered because they are sovereign debt, not bank deposits.

Yes — and it works more powerfully in a TFSA because gains compound entirely tax-free. Inside a TFSA, interest, dividends, and capital gains are all 0% taxed, so every cent of return is reinvested without tax leakage.

Example: ZAR 36,000 invested annually at 9% for 30 years grows to roughly ZAR 5.3 million in a normal account (after marginal-rate tax on returns) but to roughly ZAR 5.5 million in a TFSA — and the difference compounds further the longer the time horizon. Annual contribution limit raised to ZAR 46,000 from 1 March 2026, lifetime cap unchanged at ZAR 500,000.

From 1 March 2026 (the start of the 2026/27 tax year), the Tax-Free Savings Account annual contribution limit increased from ZAR 36,000 to ZAR 46,000 — the first adjustment since 2021. The lifetime contribution cap is unchanged at ZAR 500,000.

Inside a TFSA, all interest, dividends, and capital gains are 0% taxed. Exceeding the annual or lifetime caps triggers a 40% penalty tax on excess contributions (paid by the holder, not the provider). Withdrawals do not restore future contribution room, so the lifetime ZAR 500,000 limit is permanent. Any South African citizen, permanent resident, or tax resident can open a TFSA from any age.

Contributions to Retirement Annuities, pension funds, and provident funds are deductible at the greater of remuneration or taxable income, up to 27.5%, capped annually at ZAR 430,000 per year from 1 March 2026 (raised from ZAR 350,000 — the first adjustment since 2016).

Excess contributions are not lost — they roll forward to future tax years. The deduction reduces taxable income, so the effective benefit is at your marginal tax rate (up to 45%). Internal growth is tax-free; tax is only payable on withdrawal at retirement (typically at a lower marginal rate, with a tax-free lump sum portion).

The two-pot retirement system took effect on 1 September 2024. From that date, retirement-fund contributions split into three components:

• Vested Pot: all retirement savings accumulated before 1 September 2024 stay under the old rules.
• Savings Pot: 1/3 of every new contribution. Members may make one withdrawal per tax year (minimum ZAR 2,000) without resigning. Withdrawals are taxed at the member's marginal rate.
• Retirement Pot: 2/3 of every new contribution, locked until retirement (age 55 minimum) and must be used to buy an annuity.

Under the post-2024 framework, access depends on which pot the funds sit in:

• Savings Pot: one withdrawal per tax year (minimum ZAR 2,000), no resignation required, taxed at your marginal rate.
• Vested Pot: follows the rules in force when contributions were made (typically accessible on resignation, retirement, or formal emigration).
• Retirement Pot: locked until age 55, after which it must be used to buy a compulsory annuity (living or guaranteed).

At retirement, up to 1/3 of the combined Vested + Savings pots can be taken as a lump sum (taxed under the retirement lump-sum table; the first ZAR 550,000 is tax-free); the remaining 2/3 plus the entire Retirement Pot must be annuitised. The de minimis threshold for full lump-sum (no annuitisation) was raised from ZAR 247,500 to ZAR 360,000 from 1 March 2026.

The SASSA Older Persons Grant (state pension) is means-tested and pays:

• ZAR 2,400 per month for ages 60–74
• ZAR 2,420 per month for ages 75+ (effective from April 2026 per the February 2026 Budget)

Qualifying age is 60. To qualify, you must be a South African citizen, permanent resident, or recognised refugee, and pass the means test (annual income approximately ZAR 107,880 or less for a single person, ZAR 215,760 for a married couple combined). The grant is not subject to income tax. Private RA, pension, and provident funds typically allow access from age 55, separate from the state pension.

CGT is not a separate tax — it forms part of income tax. The mechanics for individuals (2026/27):

1. Calculate the capital gain (proceeds minus base cost minus exclusions).
2. Subtract the annual exclusion of ZAR 50,000 (raised from ZAR 40,000 from 1 March 2026).
3. Apply the 40% inclusion rate — only 40% of the net gain is added to taxable income.
4. The included amount is then taxed at your marginal rate (18%–45%), giving a maximum effective CGT rate of 18%.

The primary-residence exclusion is ZAR 3 million (raised from ZAR 2 million); the year-of-death exclusion is ZAR 440,000; small-business disposal exclusion (age 55+) is ZAR 2.7 million on a business worth up to ZAR 15 million.

Dividends paid by SA-resident companies and JSE-listed shares are subject to Dividends Withholding Tax (DWT) at 20%, deducted by the company before payment. The 20% is generally a final tax — no further income tax applies for SA resident individuals.

Important exceptions: SA REIT distributions are NOT subject to DWT; instead they are taxed at the holder's marginal income tax rate (treated as taxable income, not dividends). Foreign dividends are taxed at an effective 20% maximum rate via a special inclusion calculation. Dividends received inside a TFSA are completely tax-free.

Despite being legal tender, Krugerrands are subject to Capital Gains Tax. SARS specifically excludes Krugerrands from the definition of "personal-use assets" — they are treated as bullion, with their base cost as at 1 October 2001 specifically prescribed for CGT purposes.

For long-term investors (capital nature), gains are taxed at 40% inclusion rate, max 18% effective, with the ZAR 50,000 annual CGT exclusion applying. For frequent traders, SARS may classify the activity as a profit-making scheme and tax full proceeds as ordinary income at marginal rates (18%–45%) — the three-year deemed-capital rule that applies to listed shares does not extend to Krugerrands. Keeping clear documentation of acquisition cost and holding period is essential.

SARS treats crypto as an "asset of an intangible nature" — not as legal tender or currency. Tax treatment depends on intention and trading frequency:

• Long-term investor (capital nature): Capital Gains Tax applies on disposal. 40% inclusion rate, max 18% effective, with the ZAR 50,000 annual CGT exclusion.
• Trader (revenue nature): entire profit taxed as ordinary income at marginal rates 18%–45%; no CGT exclusion. Frequent trading, short holding periods, and business-like conduct point to revenue treatment.

Each disposal — selling for fiat, swapping crypto-to-crypto, spending crypto, or gifting — is a taxable event. Mining rewards, staking yields, and airdrops are taxable as ordinary income at the time received. Crypto must be declared on the ITR12; SARS receives information from FSCA-licensed Crypto Asset Service Providers.

Yes. Unlike local interest, there is no exempt portion for foreign interest — the full amount is taxable at your marginal income tax rate (18%–45%). Foreign interest must be declared on the ITR12 under source code 4218.

Any foreign tax already paid on the interest can be claimed as a credit against the SA tax liability (subject to limits and double-taxation agreements). South African tax residents are taxed on their worldwide income, regardless of where the bank account is held. Non-residents who are physically absent from South Africa for at least 183 days during the 12-month period before the interest accrues, and where the interest-bearing debt is not effectively connected to a SA permanent establishment, may be exempt.