Compound interest explained simply — and how to show it to your child

The most important factor isn’t money — it’s time

Compound interest means: your returns generate returns of their own. The longer it runs, the stronger the effect. With a child you have something almost no one else does: 60 years and more.

An honest example

From a small monthly amount plus the state top-up, the decades can turn it into a multiple of what you paid in — depending on performance and with no guarantee. Run your own numbers in the calculator; it deliberately shows a range, not one pretty figure.

How to explain it to your child

Take a jar and a spoon of rice each day. At first you see almost nothing. But every day something is added — and what was added grows too. That’s compound interest: start small, stay in for the long run, time does the rest.

The most valuable thing you pass on isn’t a few euros a month. It’s that your child understands how money works over time.

Non-binding, not investment advice. Performance is not guaranteed.