Taxes paid on savings

In 2010 the Federal Budget announced that from July 1, 2011 new tax breaks for savers would be introduced. But it was never rolled out and in 2012 the government did a backflip, much to the ire of the banks, and withdrew the tax break which was said to be worth $923.5 million.

The tax break would have seen savers receive a 50 percent tax breaks on the first $1,000 of interest earned from various deposit accounts. But for now, it will remain as it currently stands, with those with various types of savings accounts and investment accounts paying tax on the total interest earned each year.

The amount of tax you pay depends on the current Australian tax brackets and your annual income. Visit the Australian Taxation Office website and view the individual income tax rates to work out how much your savings will be taxed.

To grow your wealth today, compare high interest online savings accounts and follow our news articles to get the latest savings tips.

This is an information service. By browsing on the website and/or using our search tools, you are asking RateCity to provide you with information about products from multiple financial institutions. We will try to show you a range of products in response to your request for information. The search results do not include all providers and may not compare all features relevant to you, for further details refer to our FSCG. The rating shown is only one factor to take into account when considering these products. We are not a credit provider, and in giving you product information we are not making any suggestion or recommendation to you about a particular credit product. If you decide to apply for a product, you will deal directly with a financial institution, and not with RateCity. Rates and product information should be confirmed with the relevant financial institution, and you should review the PDS before you decide to purchase. See our terms of use for further details. This advice is general and has not taken into account your objectives, financial situation or needs. Consider whether this advice is right for you.