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The short answer
Some Canadian banks offer US-dollar savings accounts that pay interest, at rates each bank sets and changes, so check the bank's current rate page. For a Canadian resident the interest is taxable income, reported in Canadian dollars: the CRA's Folio S5-F4-C1 says to convert at the Bank of Canada rate for the day the amount arises. CDIC covers foreign-currency deposits at member institutions up to C$100,000 per category.
What you are comparing
A US-dollar savings account at a Canadian bank holds dollars as dollars, so you avoid converting until you need to. Whether it pays a worthwhile rate is a separate question. Rates on US-dollar savings are set by each bank and are often different from its Canadian-dollar rates; some pay a promotional rate for a period, then a lower standing rate. We have not quoted any rate here because they change; read the bank's own current rate page, dated, before opening.
| Feature | What to look for |
|---|---|
| Interest rate | Standing rate, not only a promotion; how often it is paid |
| Tiers | Whether the rate applies to the whole balance or only above a level |
| Fees | Monthly fees, transfer fees, fees to move USD to a USD chequing account |
| Access | Whether you can wire USD out directly, and the outgoing wire fee |
| Insurance | Whether the institution is a CDIC member |
How the interest is taxed
If you are resident in Canada for tax purposes, you report your world income, including interest, on your Canadian return; the CRA's guide T4131 sets out the residency tests for people who spend time abroad. Interest earned in US dollars has to be reported in Canadian dollars.
The CRA's Folio S5-F4-C1 says amounts are converted at the relevant spot rate for the day the amount arises, which since 28 February 2017 means the Bank of Canada rate for that day (or the closest preceding day). It adds that the CRA may accept an average rate over a period for practical reasons, but not generally where rates fluctuate significantly. This is information, not tax advice.
Worked example (example figures only)
You hold US$20,000 and earn 2% a year, paid monthly. Over a year that is about US$400 of interest. If the Bank of Canada rate averages 1.38 over the year and an average rate is acceptable, you report about C$552 of interest income. At a 30% marginal tax rate, tax on it would be about C$165.60. Rates, the interest figure and the tax rate are examples.
Currency gains are a separate question
The value of your US dollars in Canadian dollars moves daily. When you later convert them, there may be a foreign exchange gain or loss to consider for tax, separate from the interest. Keep a record of when you bought the dollars and at what rate, and ask the CRA or an adviser how it applies to you if the sums are large.
Deposit protection
CDIC says deposits in Canadian or foreign currency are eligible at member institutions, up to C$100,000 including principal and interest, per insured category. A large US-dollar balance can exceed that in Canadian-dollar terms; see CDIC coverage for US dollar deposits. Inside a TFSA, interest is sheltered from Canadian tax and TFSA deposits are a separate CDIC category; see holding US dollars in a TFSA.
If you are not resident in Canada
If you move back to Nigeria and stop being resident in Canada, the tax treatment of Canadian interest changes. The CRA's guide T4131 explains when you remain a factual resident, for example by keeping significant residential ties such as a home, a spouse or dependants in Canada, and suggests form NR73 if you are unsure. Tell your bank if your residence changes, because it affects how it reports and taxes the interest.
Does it make sense to hold USD at all?
- Yes, if your costs are in USD. School fees, US travel or family support priced in dollars are good reasons to keep dollars.
- Maybe, if you are hedging. Some people keep part of their savings in USD as a buffer against the Canadian dollar falling.
- Probably not, if your costs are in CAD. Two conversions (in and out) can wipe out years of interest difference.
See CAD or USD savings in Canada and opening a USD account at a Canadian bank.
What to check first
- The bank's current US-dollar savings rate page, dated, and the standing rate after any promotion.
- Fees for moving and wiring US dollars.
- That the bank is a CDIC member.
- How you will record interest in Canadian dollars at tax time.
Where Pryme fits
A Pryme Personal Account holds USD with local account details, alongside NGN, GBP and EUR, for receiving and moving dollars rather than as a Canadian savings product. Converting dollars to naira for family uses Swap, which shows the rate and the fee before you approve.
Questions people ask
Do Canadian banks pay interest on US dollar savings?
Some do, at rates each bank sets and changes. Check the bank's current rate page, including the standing rate after any promotion.
Is US dollar interest taxable in Canada?
Yes for Canadian residents. It is reported in Canadian dollars, converted at the Bank of Canada rate for the day it arises, or an average rate where the CRA accepts it.
Which exchange rate do I use to report USD interest?
The CRA's Folio S5-F4-C1 points to the Bank of Canada rate for the day (or the closest preceding day), with an average rate acceptable in some cases.
Is my USD savings account covered by CDIC?
If it is a deposit at a CDIC member, yes: foreign-currency deposits are eligible up to C$100,000 per insured category.
Sources
- CRA Income Tax Folio S5-F4-C1, Income Tax Reporting Currency (updated 27 Jun 2024) · accessed Oct 2026
- CRA Guide T4131, Canadian Residents Abroad (Rev. 12) · accessed Oct 2026
- CDIC: What's covered · accessed Oct 2026
- Bank of Canada: Daily exchange rates (table dated 23 Oct 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.