Imagine earning interest not just on the money you saved—but also on the interest that money earned. That’s the magic of compound interest.
In simple terms, compound interest is when your money earns interest, and then that interest also earns interest. Over time, this snowballs and significantly boosts your wealth—especially if you start early and stay consistent.
Let’s say you invest ₹10,000 at an interest rate of 10% per year. In the first year, you earn ₹1,000 interest. In the second year, you earn ₹1,100—not just on your original ₹10,000, but on ₹11,000. Over 20 years, that ₹10,000 can grow to over ₹67,000 without adding anything extra—just by letting interest compound.
Albert Einstein reportedly called compound interest the “8th wonder of the world.” Why? Because it works quietly in the background, multiplying your wealth while you sleep.
The key factors that make compound interest powerful:
- Time: The longer you stay invested, the bigger the snowball.
- Rate of return: Higher interest means faster growth.
- Consistency: Regularly reinvesting interest fuels compounding.
Whether you’re investing in mutual funds, fixed deposits, or retirement plans—compound interest is your best friend. Start small, start now, and let time do the heavy lifting.
🔁 Remember: “It’s not about how much you make, but how long you let it grow.”