Best Compound Interest Investments (2024)

Last Updated: December 07, 2023 21 min read

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Zach is an expert in personal finance, entrepreneurship, and investing dedicated to helping others obtain generational wealth. He has been featured in many popular publications including MSN, GOBankingRates, Apartment Therapy, Yahoo Finance, Credit Sesame, and many others. To learn more about Zach, visit the About Page.

Best Compound Interest Investments (For Beginners & Pros in 2024)

Who doesn't crave a slice of that compound interest pie?

You probably get the gist of the perks it brings, but let's talk about the nitty-gritty – the specific accounts that can turbocharge your earnings.

Top Compound Interest Investments to Grow Your Money

1. Invest in Rental Properties with Fundrise

My go-to for compound interest kicks? Hands down, it's Fundrise, a real estate investing platform I've been hooked on for months. The simplicity of diving into investments here is what won me over.

Fundrise lets you dance with rental properties and the entry fee? Just a humble $10.

Every quarter, your earnings roll in, fueled by the property income from your chosen investments.

Trust me, this platform is no newbie. Since 2012, it's juggled a real estate portfolio exceeding $7 billion. The cherry on top? No need for fancy investor credentials – everyone's welcome to join.

Simple, straightforward, and accessible – that's the beauty of Fundrise.

Best Compound Interest Investments Fundrise

2. Invest using Index Funds

Diving into the world of investments, especially for beginners, an index fund can be your trusty starting point to ride the compound interest wave.

With many index funds and stocks, a steady 7% annual return on investment, compounding like clockwork, is a reliable ballpark.

Now, if the stock market is your playground and you're eager to watch your money grow, my top pick is SoFi. Here's the lowdown:

  • Beginner-Friendly. No account minimums – perfect for those just stepping into the investing arena.
  • Fractional Shares Magic. Don't have a fortune? No worries. SoFi lets you buy slices of stocks to fit your investment comfort zone.
  • Automated Awesomeness. Hit your goals with ease using SoFi's automated tools. Investing doesn't get more hands-off than this.

So, whether you're a rookie or seasoned, SoFi packs the punch of accessibility, bonuses, and hands-free investing. A no-brainer for anyone eyeing the stock market journey.

Best Compound Interest Investments SoFi

3. Invest in Crowdfunded Real Estate

When it comes to real estate, I find crowdfunded platforms to be an excellent choice. The appeal lies in the accessibility – you don't require a significant sum to start, and the process is remarkably hands-off.

Imagine this: a collective effort where numerous investors pool their resources to partake in substantial real estate deals. This means you don't need a fortune to dip your toes into the world of apartment investing – it's a democratized entry.

Now, my preferred platform in this realm is Realty Mogul. Established in 2013, they boast a substantial user base. What sets them apart? Anticipate returns that surpass the stock market, a compelling factor for those eager to amplify their financial portfolio. Ready to witness your money grow effortlessly? Realty Mogul offers a streamlined avenue for just that.

4. Small Business Investing

Venturing into small business investments can significantly amplify your compound interest growth.

Traditionally, it involves a substantial amount of effort to initiate. However, not anymore!

Thanks to platforms like Mainvest, small business investment has become more accessible. With a minimal investment starting at $100, you can boost your income while supporting the growth of small businesses. Joining Mainvest is completely free, and there are no fees associated with investing. Simply create your account to embark on your small business investment journey.

5. Real Estate Investment Trusts (REITs)

Dive into real estate with REITs—it's like real estate investing made easy.

Think stocks, but all about real estate—no hassle with property management or rent collection.

Your cash isn't stuck in one place; REITs own loads of properties, spreading the risk.

Invest in a REIT, get profits like dividends—a low-risk addition to your portfolio.

Trade REITs on the stock market, use apps like SoFi for easy investing and compounding returns.

6. Invest in Real Estate Debt

Don't overlook this gem in real estate investing—diversify and earn compound interest.

Use platforms like Groundfloor to invest in short-term real estate debts.

These debts fuel property flips. Need $10,000 to finish a flip? Groundfloor's got your back.

Investors, this is your ticket to grow money. Start with just $10, perfect for compounding interest.

Ready to roll? Create your account here—let the money-making begin!

7. Commercial Real Estate Investing

Real estate investing: two main types—residential (for living) and commercial (for businesses).

Both types can earn you compound interest. Mix them for a diverse portfolio.

For commercial, try Streitwise. $5,000 to start, but they boast over 8% annual returns—serious profit.

8. Rental Properties

Diversify and grow wealth with real estate—an excellent hedge against inflation.

As home prices soar, fortunes are made in real estate—you can do it too.

Investing in rental properties is a common yet profitable method, demanding capital and effort.

Ensure you've got the cash and skills to add value when diving into rental property investments.

Analyze capital, research locations, and understand rental rates for similar properties in the area.

Consider hiring a property management company for maintenance and requests.

Properties vary—choose residential (like a duplex) or explore commercial real estate for wealth building.

Real estate investments, a solid way to compound money and hit six figures.

Rentals can outshine other investments but carry more risk and demand more effort.

9. ETFs (Exchange-Traded Funds)

ETFs: Low fees, high benefits—a savvy investor's choice.

Similar to index funds, they're super diversified, slashing risk.

Enjoy a lower entry point—most ETFs cost less than a couple of hundred dollars.

Some brokerages even let you snag fractional shares, cutting costs more.

ETFs cover various sectors—commodities, bonds, international—take your pick.

Expect an average 10% annual return, a stellar choice for compounding in the stock market.

Top ETFs to check:

  • Vanguard S&P 500 ETF (VOO)
  • Vanguard FTSE Developed Markets ETF (VEA)
  • Vanguard Dividend Appreciation ETF (VIG)

Invest hassle-free with SoFi!

10. Mutual Funds

Mutual funds—a stock investing option with similarities to index funds and ETFs.

Expect slightly higher fees, and they may include assets like real estate.

Actively managed—fund manager calls the shots, aiming to beat average returns.

Increased returns may be there, but watch for additional fees.

Still, mutual funds rank among the best for compounding interest investments.

11. Dividend Stocks

Grow compound interest with dividend stocks—a mature, less flashy option.

As companies peak, they share profits with shareholders via dividends.

Regular payouts—commonly quarterly, but some offer monthly or annual dividends.

Structure your portfolio right—reinvest dividends for continuous growth.

Not sure which stocks? Go for a dividend ETF—stay diversified.

Whether aiming for $500 or $1,000 monthly, dividend investing is a smart portfolio addition.

12. Growth Stocks

Meet growth stocks—a publicly traded gem in its early phases, packed with future potential.

Think tech stocks—they're prime examples, pricey but promising.

Unlike dividends, growth stocks don't pay out. The focus? Use capital to fuel business growth.

No returns till you sell—patience pays off in the world of growth stocks.

13. CIT Bank Savings Accounts

High-interest savings accounts—your monthly compound interest booster, safe and sound.

Explore online options for that extra interest kick.

High yield savings—often 10 times more than standard accounts—why miss out?

National average rate? A mere 0.06%—$10,000 for a year nets you just $6.

Connect to your bank account—easy transfers, no fuss.

Accrued interest might not be a fortune, but it's a secure money-grower.

Watch out—interest rates can dance with market conditions, bank whims.

Some accounts have fees—look out for those sneaky charges, avoidable but worth checking.

Sign-up bonuses galore—free money up to $1,000, shop around.

Perfect for low-risk folks needing cash soon—savings accounts, your safe haven.

14. Invest in Venture Capital

Seeking big returns? Venture into venture capital—a riskier but lucrative choice.

Invest in startups—think Alphabet, Airbnb—tapping into massive growth potential.

Some have hit billion-dollar status, offering investors returns over 1000%.

Beware—it's riskier than other options. Massive returns come with a price.

15. Grow Your Money With Art Investing

Artwork—a modern investment avenue for compound interest.

Yieldstreet opens doors to invest in renowned pieces, growing your money through art.

Impressive track record—since inception, a solid 15% average annual return.

Art as an investment, blending tradition with lucrative modern opportunities.

16. Bonds

Bonds—simplicity meets low-risk compound interest.

Explore types: treasury, municipal, corporate.

Government bonds—safest, lowest rates. Municipals—safe with lower yields.

Corporate bonds—higher rates, higher risk.

Diversify with a mix—government and corporate bonds.

Like an index fund, bond funds bring passive income and compound interest to your portfolio.

17. Money Market Accounts

Money market accounts—high annual interest, beating traditional savings.

Perfect for low-risk tolerance—safe and sound.

Available at most banks—check local options for the best fit.

Level up from traditional savings with a money market account's safety and higher returns.

18. Certificate of Deposit (CD)

CDs—a safe bet, blending features of money market and savings accounts.

Deposit money, watch it grow with a fixed interest rate.

Downside? Withdrawals before maturity often come with penalties.

While CD interest rates may be lower, the safety factor is top-notch—your money stays secure.

19. Investing in a Business

Overlooked but potent—starting a business, a dynamic compound interest investment.

Invest in your business, reap extraordinary returns, build valuable equity.

Starting your own business offers control, smart decisions for growth.

For a different route, buy an existing business or use platforms like Mainvest—comes with challenges.

Purchasing a business with strong cash flow means paying a premium but less risk with an established entity.

Top picks: rental businesses for passive income or affordable service businesses like painting for great returns.

20. Invest in Tangible Assets

There are many tangible assets you can invest in to build wealth. For example, investing in a historic vehicle that increases in value can generate compound interest for years to come.

While you might not see the compound interest paid directly to you each month, when it comes time to sell your asset – the capital gains you make will reflect the compound interest generated.

Other tangible investments can include:

  • Sports cards
  • Collectables
  • Coins

21. Invest in Retirement Accounts

Grow your money, compound returns—not an investment, but a smart move.

Leverage 401k or IRA—watch your money grow, enjoy tax benefits.

Remember, these are for retirement, early withdrawals mean penalties.

Contribution limits apply—plan wisely for long-term financial gains.

What is Compound Interest?

Compound interest is the secret sauce of wealth-building. Pay attention! It's not just interest on your principal; it's interest on steroids, turbocharging your money.

Here's the lowdown: You earn interest not only on your initial investment but also on the interest that piles up. It's like a money snowball rolling downhill, gaining size and momentum.

Imagine investing $1,000. Simple interest would be interest on that grand. Compound interest? Interest on that grand plus the interest it's already earned. It's a compounding cash machine.

Bottom line: Start early, let time do its dance, and watch your money blossom. Compound interest is the silent force turning financial rookies into money maestros. Don't ignore it; embrace it.

What is Compound Interest Investing?

Now that you grasp the compound interest concept, let's kick it up a notch – welcome to the world of compound interest investing.

It's not just about stashing cash under the mattress; it's about putting your money to work. Invest wisely, and compound interest becomes your loyal sidekick. Stocks, bonds, mutual funds – pick your weapon.

Here's the drill: Your investment grows, and the magic of compounding amplifies your returns. The longer your money marinates in the market, the richer the stew. Patience isn't just a virtue; it's a financial strategy.

Ditch the "get rich quick" schemes. Compound interest investing is the marathon, not the sprint. Make your money sweat, toil, and multiply. It's not about timing the market; it's about time in the market.

So, strap in and ride the rollercoaster of compound interest investing. The journey might have bumps, but the destination? Financial freedom. It's not a myth; it's a mathematical certainty. Your money, working for you, compounding its way to financial glory. Seize it.

Simple Interest vs Compound Interest

Imagine Simple Interest as a single spark in the financial darkness – it lights up once, and that's it. A firework that dazzles briefly but fades into the night.

Now, picture Compound Interest as a relentless snowball rolling down a mountain. It starts small, but as it descends, it gathers more snow, growing larger and more powerful with each revolution.

Here's the scoop: Simple Interest is like planting a seed and waiting for a single harvest. You get what you planted, no more, no less. Compound Interest? It's planting a seed and watching it turn into a perpetual money tree, bearing fruit season after season.

In the financial garden of life, you decide – a fleeting burst of light or a perpetual bloom of wealth. The choice is yours, but let me drop a hint: Compound Interest is the sun, rain, and fertile soil all rolled into one. Your money deserves more than a momentary spark; it craves the eternal glow of compounding returns. Choose wisely.

How to Earn Compound Interest Daily

There are many investments that pay daily compound interest. The easiest and safest option is getting a high yield account through Tellus.

With Tellus you will earn daily compound interest with a minimum deposit of only $100. As you earn daily compound interest you will achieve your financial goals faster.

What Investment Has the Highest Compound Interest?

The highest compound interest investments include:

  • Rental Properties
  • Crowdfunded Real Estate
  • Index Funds
  • ETFs
  • Mutual Funds

There are many options, but these investments historically have the highest rates of return.

How to Manage Your Investment Portfolio for Great Returns

Diversify Smartly: Be the Asset Maestro

Spread your investments wide. Stocks, bonds, real estate – variety is your shield. When one wobbles, others stand firm.

Stay Sharp: Knowledge is Profit Power

Read. Learn. Stay ahead. Market mastery starts with information. Ignorance? Unacceptable.

Rebalance Regularly: Keep the Financial Ship Steady

Markets sway; so should you. Sell high, buy low. It's not a suggestion; it's a mantra. Align your portfolio with your goals.

Play the Long Game: Grit Wins Over Fidgeting

Investing isn't a sprint; it's a marathon. Stick to your plan. Ignore the noise. Patience is your secret weapon.

Trim the Fat: Let Go of the Underperformers

Not every investment is a winner. Cut the losers loose. Keep the winners. Simple equation.

Rule Your Realm: Command Your Portfolio

Monitor. Adapt. Conquer. Your portfolio obeys your command. Be the master, not the servant. Success is non-negotiable.

There you go – a punchy playbook for portfolio domination. Execute it with gusto, and let your returns do the talking.

How Much Money Can Compound Interest Make?

Understanding the concrete impact of compound interest involves a closer look at the numbers.

Early Advantage: The Time Factor

Begin early to leverage time's compounding power. The longer your money is at play, the greater the multiplication effect. Every day you delay potentially affects your bottom line.

Rule of 72: A Quick Formula for Doubling

Ever heard of the Rule of 72? It's a simple tool – divide 72 by your interest rate to estimate how long it takes for your money to double. For instance, with a 10% return, expect doubling in about 7 years.

Concrete Example: The Snowball Effect

Let's illustrate. Invest $1,000 at 7% interest. In a decade, it's not just $1,967; it's the initiation of a compounding process. Extend the horizon, and your money evolves into a formidable compounding force.

Can You Get Rich Off Compound Interest?

Oh, yes you can!

Compound interest is one of the best financial instruments you can use to get rich and build your wealth.

Where Can I Put My Money to Earn the Most Interest?

Curious about the top-notch accounts for reaping compound interest?

Look no further than SoFi. With a SoFi account, the potential to score over 10% annually from your investments is on the table.

Another sweet spot for making your money work is investing in an index fund or ETF through SoFi. These investments typically return a 10% annual return, making it a savvy move to both earn interest and boost your net worth.

How to Calculate Compound Interest

Calculating compound interest is no arcane art; it's a straightforward mathematical affair. Here's your step-by-step guide to demystify the process:

1. Understand the Formula: The Heart of the Matter

The compound interest formula is your compass. A = P(1 + r/n)^(nt) – it might look like alphabet soup, but it's the key.

A is the future value, P is the principal, r is the annual interest rate, n is the number of times interest is compounded per year, and t is the time in years.

2. Plug and Play: Substituting the Values

Take your numbers and plug them into the formula. Don't fret; calculators are fair game. Plop in the principal, interest rate, compounding frequency, and the time your money plays the game.

3. Hit Calculate: Let the Magic Unfold

Push the button, and voila – the future value appears. This is the amount your money metamorphoses into after the compound interest has worked its mathematical charm.

4. Repeat for Clarity: Practice Makes Perfect

Repeat the process. Familiarity breeds confidence. The more you calculate, the more it becomes second nature.

5. Online Tools: The Lazy Genius Approach

No shame in the game. Online compound interest calculators exist for a reason. Plug in your numbers, and let the digital wizards do the heavy lifting.

6. Real-Life Example: A Concrete Lesson

Let's walk through a real-life example together. It's not about the theory; it's about applying the formula to your actual financial scenario.

Let’s say you invest $1,000 in the stock market with an average return of 7% annually and you keep your money invested for an entire decade.

Our formula looks like this:


Plug that into your calculator and you get $1,967.

Accounts that Pay Compound Interest

Not all investment vehicles provide compound interest, and actually some only make you money when the investment increases in value. The best compound interest investment accounts include:

  • Money Market Accounts
  • HYSA (High Yield Savings Account)
  • CDs (Certificates of Deposit)
  • REITs (Real Estate Investment Trusts)
  • Bonds

Do Banks Offer Compound Interest Accounts?

Yes many banks offer compound interest accounts like savings accounts. I recommend opening a bank account through CIT Bank where you can get up to 10x the national average in compounding interest.

Why You Need Compound Interest Investments

Why settle for stagnant funds when you can unleash the power of compound interest? Here's why incorporating compound interest investments is not just a choice but a financial imperative.

1. Wealth Multiplier: Compound interest isn't just interest; it's interest on steroids. Your money works tirelessly, multiplying itself over time. It's not a gradual climb; it's a financial leap.

2. Time is Your Ally: The earlier you start, the more time your money has to dance with compound interest. Time is the magic ingredient, transforming modest investments into substantial wealth.

3. Beating Inflation: Inflation erodes the purchasing power of your money. Compound interest acts as your shield, outpacing inflation and ensuring your wealth retains its real value.

4. Financial Freedom Blueprint: Whether it's retiring comfortably, buying a home, or funding your dream venture, compound interest provides the financial fuel to turn your aspirations into reality.

5. Risk Mitigation: While no investment is risk-free, compound interest provides a cushion. The longer your money compounds, the better it withstands the inevitable market fluctuations.

6. Stress-Free Retirement: Ensure your golden years are indeed golden. Compound interest investments lay the foundation for a stress-free retirement, allowing you to enjoy the fruits of your labor.

In a financial world filled with options, compound interest isn't just a choice; it's a necessity. It's the engine that propels your money forward, turning aspirations into achievements. Embrace compound interest investments, and let your financial journey be one of growth, security, and accomplishment.

Where to Invest for Compound Interest

Realty Mogul

Dive into real estate on Realty Mogul – where compound interest steals the show


Harvest dividends effortlessly with SoFi – simplicity meets wealth growth

CIT Bank

Elevate your savings game with CIT Bank's high-yield sanctuary


Join the small business movement on Mainvest – a journey of returns and entrepreneurship

How to Invest in Compound Interest

In the realm of compound interest, the options are as diverse as your financial goals. Let's break down two paths – one through real estate and the other through the stock market – in a way that suits your style:

Embarking on Real Estate with Realty Mogul

  1. Create a free account on Realty Mogul
  2. Drop in your initial investment and invest in a Real Estate Investment Trust (REIT)
  3. Witness as your compound interest takes center stage!

Navigating the Stock Market with SoFi

  1. Open an account with SoFi
  2. Throw in that initial deposit
  3. Channel your funds into an index fund or ETF, sit back, and revel in the pleasure of watching your wealth blossom over time!

Best Compound Interest Stocks to Consider

I always recommend investing in diversified assets when investing in the stock market like ETFs or index funds.

If you're eyeing compound interest with a sprinkle of regular income, consider these dividend-paying stocks to fortify your portfolio:

1. Johnson & Johnson (JNJ): Healthcare Dividends

Besides being a healthcare stalwart, J&J is no stranger to dividends. A solid choice for stability and a regular income stream.

2. Procter & Gamble (PG): Household Name Dividends

PG, with its array of household products, is not just a staple; it's a consistent dividend payer. A reliable pick for those seeking steady returns.

3. Coca-Cola (KO): The Beverage Dividend Icon

Coca-Cola's dividends are as refreshing as its beverages. With a global presence, it's a reliable source of income for your portfolio.

4. AT&T (T): The Communication Dividend Giant

AT&T is more than just a telecom giant; it's a dividend heavyweight. A dependable choice for those who appreciate a regular cash flow.

5. Realty Income Corporation (O): The Real Estate Dividend King

Known as "The Monthly Dividend Company," Realty Income delivers a monthly payout. A unique option for those desiring frequent returns.

These dividend stocks not only have the potential for capital appreciation but also offer a reliable income stream. Remember, a well-balanced portfolio considers both growth and income. Dive into the specifics of each stock, assess your financial goals, and let dividends become the cherry on top of your compound interest strategy.

Best Compound Interest Mutual Funds

When it comes to unleashing the power of compound interest, mutual funds can be your trusty sidekick. Here's the lowdown on the cream of the crop:

1. Vanguard 500 Index Fund (VFIAX): The S&P 500 Marvel

This fund mirrors the S&P 500, a powerhouse index. Investing here is like hitching a ride on the success of 500 of the largest U.S. companies. A solid choice for the long haul.

2. Fidelity Contrafund (FCNTX): The Growth Maestro

If growth is your game, Contrafund is your ally. It's actively managed, seeking companies with high growth potential. A dynamic choice for those eyeing substantial returns.

3. American Funds Growth Fund of America (AGTHX): The Diversification Dynamo

Diversification is the name of the game here. With a mix of stocks, this fund spreads the risk. A steady performer for those who appreciate a balanced approach.

4. Schwab S&P 500 Index Fund (SWPPX): The Low-Cost Contender

Low fees and mirroring the S&P 500? That's a winning combo. If cost-effectiveness is your priority, this fund deserves a spot on your radar.

5. TIAA-CREF Large-Cap Value Fund (TILCX): The Value Seeker's Sanctuary

For those who appreciate undervalued gems, this fund focuses on large-cap, value-oriented stocks. A strategic choice for the value-conscious investor.

Remember, the best compound interest mutual fund for you depends on your financial goals, risk tolerance, and investment horizon. Dive into the specifics, analyze your needs, and let your money compound its way to financial victory.

Final Thoughts on the Best Compounding Interest Accounts

Putting your money into compound interest accounts is like snagging money for free.

Now, when it comes to compound interest investments, my all-time favorite is real estate. But hey, no one-size-fits-all here. Your choice depends on your personal scenario.

Here's the cream of the crop for compound interest investments:

  • Rental Properties
  • Commercial Real Estate
  • Crowdfunded Real Estate (Realty Mogul)
  • Index Funds (SoFi)
  • ETFs
  • Mutual Funds

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