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Compound Interest Calculator

Free compound interest calculator with monthly contributions, inflation adjustment, and tax-on-interest modelling for HISAs, GICs, TFSAs, and RRSPs.

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C$
%
year
C$
%

Future value

$45,126

Effective annual rate: 4.33%
Time to double: 16.3 year
Total contributions
$34,000
Total interest earned
$11,126
Future value
$45,126

Growth over time

12345678910
Total contributions Total interest earned
yearDepositsInterestBalance
1$2,400$481$12,881
2$2,400$606$15,886
3$2,400$736$19,022
4$2,400$872$22,294
5$2,400$1,013$25,707
6$2,400$1,161$29,269
7$2,400$1,316$32,984
8$2,400$1,477$36,861
9$2,400$1,645$40,906
10$2,400$1,820$45,126

For estimation purposes only. Actual returns and tax treatment depend on your specific financial institution, province, registered account limits, and personal tax situation — consult a financial advisor.

How compound interest works

Compound interest is interest earned on your original deposit plus all the interest already credited to your balance, which is why growth accelerates the longer money is left to compound. Depositing C$10,000 into a high-interest savings account (HISA) paying 4.25% a year, compounded monthly, while adding C$200 every month, grows faster in later years than in the first, because by then you're earning interest on a much larger accumulated balance, not just the original deposit.

The compounding frequency you choose changes the outcome too — monthly compounding pushes the effective annual rate a little above the quoted nominal rate, since interest credited partway through the year starts generating its own return for the rest of that year.

How interest income is taxed in Canada

Interest earned on a non-registered account — a regular HISA or a GIC (Guaranteed Investment Certificate) held outside a TFSA or RRSP — is reported as investment income on Line 12100 of your federal tax return and is 100% taxable at your marginal rate, according to the CRA's guidance on Line 12100 – Interest and other investment income (canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-12100-interest-other-investment-income.html). This is a meaningful difference from capital gains, which only include 50% of the gain in your taxable income — so a dollar of interest is taxed more heavily than a dollar of capital gain at the same marginal rate. For GICs and other longer-term investments held outside a registered plan, interest generally must be reported as it accrues each year, even if you don't actually receive the cash until the investment matures.

Your actual marginal rate depends on both your total income and your province of residence, since Canada combines federal and provincial tax brackets. This calculator's 'Taxable (non-registered) account' setting uses 30% as a representative rate, but your real rate could be meaningfully higher or lower.

TFSA vs RRSP vs a plain taxable account

A TFSA (Tax-Free Savings Account) lets your interest grow completely tax-free, including when you withdraw it, which makes it the most tax-efficient place to hold interest-bearing savings for most people. Like the ISA allowance in the UK, the TFSA has an annual contribution room limit that accumulates if unused — the government sets a dollar figure most years, so check the CRA's current limit rather than assuming a fixed number, since this calculator does not enforce any contribution cap.

An RRSP (Registered Retirement Savings Plan) works differently again: contributions are tax-deductible up front, and growth is tax-deferred rather than tax-free, meaning withdrawals in retirement are taxed as ordinary income. This calculator approximates the RRSP accumulation phase as tax-free growth, which only reflects the fact that no tax is due while the money stays inside the plan — it doesn't model the tax due when you eventually withdraw. A GIC or HISA held outside either registered plan is fully taxable each year as described above.

Example: C$10,000 plus C$200 a month at 4.25% for 10 years

Starting with C$10,000, contributing C$200 a month, at a 4.25% annual rate compounded monthly, this calculator projects a future value of C$45,126 after 10 years — C$34,000 from your own deposit and contributions, and C$11,126 from interest. Monthly compounding lifts the effective annual rate to 4.33%. At 4.25%, a lump sum on its own would take about 16.3 years to double.

Example: the same C$10,000 with no ongoing contributions

The same C$10,000 at 4.25% compounded monthly, with no further contributions, grows to C$15,284 after 10 years — C$5,284 of that being interest. The difference between C$15,284 and the C$45,126 result above shows how much regular C$200 monthly contributions add over the same 10-year period.

Canadian HISA and GIC rates track the Bank of Canada policy rate closely, so both have moved together through recent rate cycles — and because TFSA and RRSP contribution limits change most years, always confirm the current-year figures on the CRA's website before assuming last year's numbers still apply.

TFSA vs RRSP vs GIC — which is best for compound interest?⌄
A TFSA grows completely tax-free and is generally the best home for interest-bearing savings if you have contribution room available. An RRSP defers tax rather than eliminating it — you get an upfront deduction but pay tax on withdrawals later. A GIC or HISA held outside either registered plan is fully taxable each year at your marginal rate. Which is 'best' depends on your income now versus your expected income in retirement, and how much registered room you have left.
What is TFSA and RRSP 'contribution room'?⌄
Contribution room is the total amount you're allowed to put into a registered account, and it accumulates year over year if you don't use it all. The government sets new limits most years, so check the CRA's current-year figures directly rather than relying on a fixed number — this calculator doesn't enforce any contribution cap.
Is interest taxed the same way as capital gains in Canada?⌄
No — interest income is 100% taxable, while only 50% of a capital gain is included in your taxable income (the inclusion rate). That makes interest meaningfully less tax-efficient than capital gains at the same marginal rate, which is one reason many people prefer to hold interest-bearing GICs and HISAs inside a TFSA or RRSP rather than in a non-registered account.
Do I need a T5 slip to report interest income?⌄
Financial institutions generally issue a T5 slip if they paid you $50 or more in interest during the year, but you're required to report all interest income on Line 12100 of your return even if you didn't receive a T5 for a smaller amount.
How is GIC interest taxed if I don't receive the cash until maturity?⌄
For most GICs and similar investments, the CRA requires you to report interest as it accrues each calendar year, not just when you receive the cash at maturity — so a multi-year GIC generally means reporting a portion of the interest on your return every year it's held, outside a registered plan.
Does my province affect how much tax I pay on savings interest?⌄
Yes — Canada combines federal and provincial tax brackets, so your total marginal rate on interest income depends on which province you live in as well as your total income. This calculator's default rate is a representative approximation, not a specific province's figure.
How does compounding frequency change my results?⌄
More frequent compounding means each interest payment starts earning its own interest sooner. At the same 4.25% nominal rate, monthly compounding produces a 4.33% effective annual rate — a bit higher than annual compounding would give.
How long will it take my savings to double?⌄
At a 4.25% annual rate, roughly 16.3 years, as shown in the worked example above. The 'rule of 72' gives a quick estimate at any rate: divide 72 by the interest rate.
Can I model regular withdrawals as well as contributions?⌄
Yes — set a withdrawal amount and frequency alongside your contributions to model something like a retiree drawing a regular income from savings.
Is a HISA the same thing as a GIC?⌄
No — a HISA (High-Interest Savings Account) stays fully accessible and its rate can change at any time, while a GIC locks your rate in for a fixed term in exchange for reduced access to your money before maturity. Both are taxed the same way outside a registered plan.