Compound interest and why it pays to save early

older couple relaxing on bench at seasidePut your money to work for you. With a combination of time and compound interest, your goals are nearer at hand than you might think.

In case you haven't heard, compound interest is the best. It powers all sorts of savings and investment products and, over time, allows you to turn your money into even more money!

So, how does it work?

One of the great things about savings and investments is that they earn interest. With compound interest, those earnings are reinvested into your principal. Your principal grows and, as a result, earns even more interest. The longer you can keep this compounding equation going, the more money you’ll earn in the end. Check out this example to see for yourself!

That’s why it’s so important to start saving early – you can end up with a lot more money, even while making fewer or smaller contributions.

Small contributions turn into big earnings over time so get started today. Take the hassle out of saving and set up a pre-authorized contribution into your savings, RRSP, or TFSA. That way you can’t use forgetfulness as an excuse!

I'd like to talk to an advisor. Book an appointment.Call our Contact Centre at 1.866.863.6237 to learn more about compound interest and saving, or book an appointment online.

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