Best Compound Interest Investments UK

The physics genius UK’s Top-Rated Investment Apps Einstein once described compounding as the “eighth wonder of the world.” Compound interest allows you to turn small cash sums into larger cash piles over time by reinvesting any interest you earn on your original capital. But it’s important to know that you need to commit to investing regularly and for the long-term to take full advantage of compounding.

Investing your money in the right way can help you make it work harder for you. It’s why starting early, and reinvesting any dividends (or distributions) you receive is so important – not only can it boost your returns over the long term, but it can also help to cushion you from market dips and volatility.

Investment Advice for Retirees: Building Financial Security

Compounding works for investments as well as savings accounts. But you’ll likely need to choose more aggressive investments to reap the benefits of this principle – as they can often return higher rates of interest than savings accounts. These options include CDs, savings accounts that pay interest based on the amount you save or reinvest, shares in companies that pay dividends (which can be reinvested for even better returns), and alternatives such as artwork, farmland, or hedge funds.

All investments can fall as well as rise, you could get back less than you invest and tax rules can change. You should always seek independent advice before making any investment decisions. Please note that these calculations do not take account of any charges you may incur when investing, nor do they reflect the impact of inflation – which can reduce your spending power over time.