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By David Fielding on September 12, 2016
Estimated reading time: 1 minute

How to explain compound interest to kids

By David Fielding on September 12, 2016
Estimated reading time: 1 minute

Here's an easy way to explain this important financial concept.

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It’s how your savings grow faster the longer you leave them alone. Whatever you save—whether it’s in an RESP, a savings account or an RRSP—earns interest not just on what you put in, but also on the money it picks up along the way, which is called compound interest.

Compound interest

Compare the best savings accounts in Canada

More tips on raising money-wise kids:

Ages 0 to 6: My first money moves » Ages 7 to 12: Saving not spending » Ages 13 to 17: Big kids, bigger budget » Ages 18+: Preparing to launch »

How to explain…

Basic budgeting to kids » Net worth to kids »

Ways your kids can earn and save

Run a successful lemonade stand » Save money at school »

Help!

How can I avoid money tantrums? » Should you pay your kids to volunteer? » Should I buy my 10-year-old a smartphone? » Does my kid need a clothing allowance? » Should I give my teen a credit card? » My kid called from college and is broke again »

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