If you’re willing and able to put away some of your money over the long term, then you’d be doing yourself a favour by getting acquainted with compound interest – but even if you can’t right now it’s a very useful financial concept to understand

Most of us will have heard the saying that time is money – a reminder not to fritter away our days. But did you know this maxim also applies to our personal finances? How, with a little planning and time, we can make an increasing amount of money on our money through savings.

The concept is simple. Compound interest is the interest paid on your original savings deposit and then the interest accumulated on the interest paid on the deposit. With a decent interest rate and years of saving, even initially small amounts can grow to produce significant gains over a lifetime.