Compound interest is a powerful tool that can help individuals build wealth over the long term. By understanding and utilizing this concept, individuals can see their money grow exponentially faster than if they were only earning interest on the initial investment. In this article, we will explore the basics of compound interest investments, the best options available, and how to use NerdWallet's compound interest calculator to determine the potential growth of your money.
To begin, let's take a look at some of the best compound interest investments. Certificates of deposit (CDs), high-yield savings accounts, bonds, and bond funds are among the top choices for individuals looking to maximize their money's growth potential. These investment options offer competitive interest rates and provide a safe haven for your money to grow steadily over time.
In addition to these options, easy access and limited access savings accounts also offer the opportunity to earn compound interest. Unlike fixed-rate bonds, these accounts allow you to access your funds whenever needed, while still benefiting from the power of compounding.