What is the compound interest effect?
Compound interest or ‘interest on interest’ means that returns from your company’s initial investment earns interest on top of the invested capital. Time is the best friend of the compound interest effect. The sooner you start investing, the more you stand to benefit. Examples of the compound interest effect:
If your business saves 100 euros per month on an account with a 0% interest rate, you end up with 24,000 euros in 20 years.
If your business invests 100 euros per month in a fund with a 7% expected return, you could end up with 51,000 euros after 20 years thanks to the compound interest effect.
Investment based cash management
Investment based cash management ensures your company’s liquidity and allows your company’s money to grow and bring in a return. The service invests assets to seek returns. The automated system ensures that your company’s account always has sufficient funds for ongoing costs.
Investment based cash management is a free-of-charge service. You only pay the fund costs.