What is compound interest?

Last Updated: 12 Feb 2016

When you have a term investment, you earn interest on the principal you’ve invested. And when that principal and interest combined earns interest as well, that secondary interest is called ‘compound interest’.

Compound interest can help your investment grow faster because you’re earning interest on your interest.

Compound interest is available on a term deposit or an ASB Term Fund for terms of six months or more, with interest/returns paid quarterly, six-monthly, yearly or on maturity. The compound interest option isn't available when interest/returns are paid monthly.

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