Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be Scamsmart.
A healthy credit score has its benefits, so make sure you manage your debt correctly.
Before you start university, make sure to organise your finances.
Explore the best cards with a 0% introductory period.
Could the value of your state pension rise by more than inflation?
Will your loved one's gift be tax affected?
Looking for inflation beating returns? Investing in shares could be an option.
A healthy credit score has its benefits, so make sure you manage your debt correctly.
Before you start university, make sure to organise your finances.
Explore the best cards with a 0% introductory period.
Could the value of your state pension rise by more than inflation?
Will your loved one's gift be tax affected?
Looking for inflation beating returns? Investing in shares could be an option.
Albert Einstein reportedly once described compound interest as “the most powerful force in the universe”. But what exactly is it?
We all know that we earn interest on our savings. But what happens to the interest once we've earned it? It’s either moved (or paid) into a different savings or current account, or it stays in the same account and is added to your savings.
You might have your interest ‘paid away’ if you were looking to use the interest you earn on your savings as an income, for instance to supplement your pension in retirement. However, because your savings pot never gets a chance to grow, the amount you can buy with it will become less over time, due to the effects of inflation.
With compound interest, your savings have the chance to grow and snowball. When you earn interest on your savings, the interest you earn is added to your savings pot. Then the next time you earn interest, you not only earn it on your original savings amount, but also on the interest you have previously accrued – in other words, your interest is compounded.
Of course, the more you save and the longer you can leave it, the larger and larger your nest egg will become. And that is – in part – due to the effects of compound interest.
When looking for a new savings account, you can use the Moneyfactscompare.co.uk charts to compare the best rates on the market. On our tables you can find which accounts pay compound interest too.
Vera has £1,000 to save. She decides on an account paying an interest rate of 2.00% annually.
At the end of year one she receives £20 in interest (as £1,000 x 2% = £20).
This £20 is added to her original £1,000 savings, making a new total of £1,020.
At the end of year two she’s earned £20.40 (as £1,020 x 2% = £20.40) because she’s not only been paid interest on her original £1,000, but also on the £20 interest she earned in year one.
The £20.40 is then added to her £1,020 to make a new total of £1,040.40.
The cycle then repeats again and again, so that by the end of year 10, her savings have grown to £1,218.98.
If she had this interest paid away from her savings account she would only earn £20 each year in interest, as she’d only ever be earning interest on £1,000. So, whereas with the interest compounded she would earn £218.98 over a 10-year period, with the interest paid away she would only earn £200.00.
All of our newsletters are available free by email to all Moneyfactscompare.co.uk users.
Send me Weekend Moneyfactscompare, Savers Friend, Companies Friend and selected third-party offers.
Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.
There are many reasons why you may want to give a cash gift to your loved ones. We explain the implications from a tax perspective.
There are many reasons why you may want to give a cash gift to your loved ones. We explain the implications from a tax perspective.
Every basic rate taxpayer in the UK currently has a PSA of £1,000, which means the first £1,000 of savings interest earned in a year is tax-free and you only have to pay tax on savings interest above this.
Every basic rate taxpayer in the UK currently has a PSA of £1,000, which means the first £1,000 of savings interest earned in a year is tax-free.
If you're lucky enough to win one of those draws, NS&I will write to you to give you the good news. However, if they don't have your current contact details, you may not realise your good luck.
If you're lucky enough to win one of those draws, NS&I will write to you to give you the good news. If you haven't updated your details, here is what to do.
There are many reasons why you may want to give a cash gift to your loved ones. We explain the implications from a tax perspective.
There are many reasons why you may want to give a cash gift to your loved ones. We explain the implications from a tax perspective.
Every basic rate taxpayer in the UK currently has a PSA of £1,000, which means the first £1,000 of savings interest earned in a year is tax-free and you only have to pay tax on savings interest above this.
Every basic rate taxpayer in the UK currently has a PSA of £1,000, which means the first £1,000 of savings interest earned in a year is tax-free.
If you're lucky enough to win one of those draws, NS&I will write to you to give you the good news. However, if they don't have your current contact details, you may not realise your good luck.
If you're lucky enough to win one of those draws, NS&I will write to you to give you the good news. If you haven't updated your details, here is what to do.
Moneyfactscompare.co.uk will, like most other websites, place cookies onto your device. This includes tracking cookies.
I accept. Read our Cookie PolicyMoneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.
Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.
Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.
Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.
Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.
Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.