When it comes to getting the most out of your savings, compound interest is a powerful tool. It allows you to see your returns grow, like a snowball rolling downhill – and it can work in almost any type of investment account or portfolio, including workplace pensions, savings accounts and even market investments such as dividend stocks.

However, to get best compound interest investments uk, it takes time and steady reinvestment. And you need to stick with it for the long term – it won’t happen overnight, but in due course your efforts could pay off.

In the UK, you can start to earn compounding interests with your savings accounts by choosing a product that pays interest on your initial deposit plus each year’s interest on top of that, rather than just an annual percentage rate (APY) on your original deposit alone. You can find a range of compounds savings accounts in the Raisin UK marketplace, although the more regularly your interest is paid (i.e. monthly, not annually) the better, to maximise the effect of compounding.

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If you’re saving for a long-term goal, such as retirement, then it makes sense to invest rather than simply put your money in a savings account, which will be eroded by inflation. But the decision about whether to save or invest largely comes down to your appetite for risk – if you’re more cautious then you might prefer the guaranteed income of a CD or savings account, while others may want to take on more of a risk in order to earn a higher return, such as with dividend stock investments that can often be reinvested into additional shares.