The Power of Compound Interest: Watch Your Savings Grow!
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Did you know that ₹10,000 invested at 7% p.a. returns doubles in 11 years?
Wondering how?
It is through compound interest.
Let’s decode.
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If you invest ₹100 at 5% returns per year, you receive an interest of ₹5. In the 2nd year, the interest is calculated on ₹105, and you will earn ₹5.25.
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Every year, the interest gets added back to the deposited amount. As the deposited amount increases, the interest income also increases.
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The returns increase considerably if the compounding frequency increases, i.e., you receive interest upon interest through the power of compounding.
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For instance, interest on ₹1,000 at 5% interest compounded annually is ₹50.
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When investing, choose avenues that compound the interest more frequently for better returns. Stay invested longer for higher returns.
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IDFC FIRST Bank Savings Accounts offers monthly interest, which compounds more frequently than with quarterly interest payouts. Open an account and watch your savings grow!