Investors urged to take advantage of compound interest

Investing sooner rather than later will help savers to reap the benefits of compound interest.

This is according to Fidelity International, which notes that Albert Einstein is believed to have described compound interest as ’the eighth wonder of the world’.

By investing in an Isa at the beginning of December rather than in April the following year, the firm notes that savers cans significantly increase their returns by earning interest on their interest.

After comparing an Isa investment on December 1st with one made on April 1st using the FTSE All-Share Index, the company found that the return for December was over £3,600 higher.

Head of UK personal investments at Fidelity International described Isas as ’the most tax-efficient way to save outside of a pension’.

He also said that the recent increase in the Isa allowance is the ’biggest positive move the government has made in over a decade towards saving’.

The annual limit for Isa savings went up from £7,200 to £10,200 for savers over 50 years old in October and this change is set to apply to everyone from April next year.
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