Helpful Guide
The Power of Compound Interest
See how time, consistency and reinvested earnings can help your money grow.
Compound interest is often described as earning interest on your interest. Instead of only earning returns on the money you originally invest, your accumulated interest also begins generating returns over time. The longer your money remains invested, the greater the potential effect of compounding.
For example, making small, regular contributions to a savings or investment account can gradually build wealth over many years. While the growth may seem slow at first, compounding can cause your balance to increase more rapidly as your earnings continue to generate additional earnings.
The key to benefiting from compound interest is consistency and time. Starting early, investing regularly, and allowing your money to remain invested can make a significant difference over the long term. Even modest contributions may grow into a substantial amount when given enough time to compound.
Quick Tip
The earlier you start, the more time compounding has to work. Even small regular contributions can matter when they have years to grow.