Is compound interest a good investment?

Unlike simple interest, compound interest lets your returns earn returns of their own. Money invested in the stock market and in savings accounts may benefit from compound interest. Thanks to its potential to grow savings over time, the idea of compound interest is what motivates many people to start investing.

Can compound interest help savings grow?

Compound interest can help savings grow. Here's how. Compound interest helps your money work harder. Unlike simple interest, compound interest lets your returns earn returns of their own. Money invested in the stock market and in savings accounts may benefit from compound interest.

What is compound interest?

Compound interest is the interest you earn on your original money and on the interest that keeps accumulating. Compound interest allows your savings to grow faster over time. Let’s say you want to put $10,000 into a high-yield savings account with a 5% annual yield, compounded daily. You don't plan to add additional funds after your first deposit.