INVESTING BASICS

How Compound Interest Works

Compound growth means returns can themselves begin producing returns over time.

The basic idea

If money earns a return and the earnings remain invested, the next period's growth can apply to a larger balance. Regular contributions can increase the effect.

Why time matters

Longer periods give growth more opportunities to build on previous growth. This is why starting early can be valuable even when initial contributions are modest.

Use the calculator

Enter a starting balance, monthly contribution, estimated annual return, and time period on the homepage to explore hypothetical outcomes.

Keep assumptions realistic

Investment returns are uncertain, fees and taxes can matter, and past performance does not guarantee future results. Treat calculator outputs as illustrations rather than promises.