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What is a compound interest account?

A compound interest account is any account that lets you earn interest or some other return to grow your savings. You could open a compound interest account with a bank, or you could also open a compound interest account with an investment broker. Here’s how it’s done.

How does compounding interest work?

When you opt for compounding interest, your bank or credit union may compound the interest either daily or monthly. Either way, it is typically applied to your account on a monthly basis. A money market account is another type of savings account. It’s like a cross between a checking and a savings account.

What happens if you put money into a compound interest account?

If you put your money into an account that earns compound interest, you'll see your wealth grow exponentially. Here's a closer look at how it works. Compounding happens when you put money into an account that earns interest. When the account pays interest, the interest payment stays in the account.

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