What is compound interest?
Compound interest means you earn interest on your interest as well as on the money you put in.
Over short periods the effect looks small. Over decades it can be most of your final balance, so starting early often matters more than the size of each deposit. The same effect works against you on debts such as credit cards.
Example
Savings calculator
1,000 earning 10% a year becomes 1,100 after one year and about 2,594 after ten years, if the interest stays in.
General information only, not financial advice.