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Compounding Frequency

How often interest is added to a balance, e.g. monthly or daily.

Compounding frequency is how often earned interest is added back to the balance so it can earn interest itself — annually, monthly, or daily. More frequent compounding produces slightly more growth, but the effect is smaller than most people expect: moving from annual to monthly matters a little, monthly to daily barely at all. Contribution amount and time invested matter far more.

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