The Power of Compound Interest: How to Double Your Savings

What is Compound Interest?

Compound interest is the interest calculated on the initial principal and also on the accumulated interest of previous periods. Often described as "interest on interest," compounding makes your savings grow at a faster rate compared to simple interest.

Simulate your wealth growth offline: [Compound Interest Calculator](/tools/compound-interest-calculator).

How Compounding Frequencies Affect Returns

The frequency with which interest is compounded determines how quickly your savings grow. Compounding frequencies typically include:

• Daily: Interest is computed and added to your balance 365 times a year.
• Monthly: Compounded 12 times a year.
• Quarterly: Compounded 4 times a year.
• Annually: Compounded once a year.

The higher the frequency, the greater the final return at the end of the tenure.

The Rule of 72

To estimate how long it will take to double your money with compound interest, use the Rule of 72:

Years to Double = 72 / Annual Interest Rate

For example, an investment earning a 6% annual rate will double in approximately 12 years.

Simulate different contribution rates and frequencies using our interactive [Compound Interest Calculator](/tools/compound-interest-calculator).