Compound Interest is the process of earning interest not just on the money you originally put in (called your principal), but also on the interest that money earns over time. Think of it like a snowball rolling down a hill — as it goes, it picks up more snow, which helps it grow faster and faster. In the same way, compound interest helps your savings grow more quickly the longer you leave them invested. The more often your interest compounds (daily, monthly, or yearly), and the longer your money stays invested, the more powerful the effect becomes. This is one of the key reasons why starting to save and invest early can make a big difference in building wealth over time.