I want to manage my finances

The magic of compound interest

To earn compound interest, begin by investing your savings and letting them accumulate interest. With time, you will earn interest not only on your investment, but also on the interest it has earned.

For example, if you invest $1,000 in a fund with a 5% annual interest rate, your investment will be worth $1,276.28 in five years.

Your investment1 year2 years  5 years
$1,000 X 5%=$1,050 X 5%=$1,102.50... $1,276.28

There are many ways of benefiting from the magic of compound interest. Here are a few examples:

Type of investmentReturn
Savings account:Between 0.01% and 1.20%*
Guaranteed Investment Certificate (GIC) invested for 1 year:Between 0.75% and 1.75%*
Québec or Canada government savings bonds invested for one year, redeemable at any time: Between 0.65% and 1.50%*
*Rates as at August 1, 2011.

The sooner and more regularly you start investing money, the more you benefit from the magic of compound interest.