How Compound Interest and the Reinvestment of Profits Can Grow Your Money

What is Compound Interest / Reinvestment of Profits?

When you save or invest your money, it has the potential to grow through investment returns - whether from interest earnings or reinvestment of profits (for Shariah-compliant products).

Over time, these returns are added back to your balance, allowing you to earn even more on both the initial amount and the returns you’ve already accumulated. It’s like your money is working a second job — on autopilot. 

Sounds too complicated? 💡 Read on to learn how it works.

Example:

When you save RM1,000 at 5% annual compound interest/reinvestment profits:

No top-ups. No effort. Just time doing its thing⏳. That’s the power of compounding / reinvesting!

Why You Should Start Investing Now, Not Later

Here’s the catch: the earlier you start, the more time your money has to grow 📈

Even small amounts make a big difference when you give them enough time. This is why investing in your 20s or early 30s can seriously pay off down the road.

Ever heard stories of people retiring with over RM1 million in their EPF (Employees' Provident Fund)? Whether you have a Conventional or Shariah-compliant EPF account, that's the power of compound interest — or reinvested profits — working for you over decades. 

The earlier you start contributing, the more your savings can multiply!

Beginner-Friendly Investment Options

Here are a few low-risk and beginner-friendly options worth checking out:

💡 Pro Tip: You can manage all these investments right on your CIMB OCTO app.

• Invest in professionally managed funds that provides consistent and competitive returns.

• A wide selection of fixed and variable priced funds including ASB (Amanah Saham Bumiputera) and ASM (Amanah Saham Malaysia).

• Affordable investment from as low as RM1.

• Buy and hold gold digitally without needing the physical gold bars.

• Gold often retains or grows in value during inflation.

• Minimum investment: 1 gram of gold.

➡️Learn more about e-GIA here.

Note: e-GIA is not a Shariah-Compliant investment vehicle. 

• Offering you a diversified range of Unit Trust Funds/Shariah-Compliant Unit Trust Funds.

• Managed by professional Fund Managers who are equipped with deep expertise, experience and resources.

• Start your investment from as low as RM100.

➡️Learn more:

• Unit Trusts
• Shariah-Compliant Unit Trusts

Final Thoughts: Start Small, Start Now

Ultimately, compound interest (conventional) and reinvestment profits (Islamic) are distinct mechanisms with the same economic goal: generating returns on both your principal and accumulated earnings — driving powerful long-term growth.