Compound growth means your money earns a return, and then that return earns a return too. Over time, the growth builds on itself.
A simple example
This is an example only, not a promise. Say you save $100 and it grows by 5% in a year. You now have $105. Next year, the 5% is on $105, not $100, so you earn a bit more. Over many years, that snowball effect adds up.
What helps
- Time. The longer your money has to grow, the more compounding can work.
- Regular saving. Small, steady amounts add up.
- Lower fees. Fees reduce what is left to grow.
Returns are never guaranteed, and investments can go down as well as up.
Learn more from the Government of Canada
This guide is general education, not personal advice. Rules can change, so check the official sources above.