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One of the upsides to keeping your money in a bank account is the chance to earn compound interest — you earn interest on both the funds you deposit in an account and on the interest that money earns.
On the flip side, when you use a credit card, you're charged interest on the unpaid interest.
While compound interest increases the cost of borrowing, it's your best friend if you're trying to build up your savings.
See how much your savings can grow over time with our compound interest calculator With simple interest, you earn interest only on the money you deposit, not on the interest your money earns.
Let's say you put $2,000 into an account with a simple interest rate of 2%.
At the end of one year, you would earn $40 in interest if you didn't add or take out any money.
Most savings accounts —high-yield savings accounts, money market accounts, andcertificates of deposit— earn compound interest, helping your assets grow faster.
With compound interest, you earn interest on all the money in your account, including earned interest.
Using those same figures from above, if you added $2,000 to a savings account with an interest rate of 2% that compounds monthly, you would earn $40.37 in interest at the end of one year, or $0.37 more than with simple interest.
An extra $0.37 probably doesn't seem like much, but at the end of five years, you would earn $210.16 in interest, or $10.16 more than from simple interest.
Savings accounts typically compound daily or monthly.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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