Do I owe tax on interest I haven't withdrawn?

October 27, 2026

In a taxable cash account, interest is generally taxable in the year it's credited to your balance, whether or not you withdraw it. Leaving interest invested to compound doesn't usually defer the tax. [CONFIRM: with tax counsel]

Planning ahead

  • Your 1099 will show all interest credited during the year.
  • Some investors withdraw part of their interest to cover the tax.
  • Holding CREB in an IRA can defer or avoid tax on interest. See IRA tax advantages.

This is general information, not tax advice. Speak with a tax professional about your situation.