What is Compounding?
A process where you earn interest on your principal plus the interest already earned — also called
interest-on-interest
.
Why It Beats Simple Interest
Unlike simple interest, compounding grows faster because each year’s earnings generate more earnings in the future.
Small Savings, Big Future
Even ₹2,000 invested monthly for 20 years at 12% can grow to ₹15.8 lakh — proves that patience pays.
Keys to Maximizing Compounding
Start early, invest regularly, reinvest returns, avoid withdrawals, and stay committed for the long term.
Where Compounding Works Best
FDs, RDs, SIPs, PPF, EPF, and long-term stock holdings — all benefit greatly from compounding.
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