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Wealth & Investing

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

CIMB ❘ 16 Dec 2025

4 min(s) read

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:

	Opening Bank Balance (RM)	Interest / Reinvestment Profits (RM)	Closing Bank Balance (RM)
Initial deposit	1,000.00	5%
By Year 1	1,000.00	1,000 × 5% = 50	1,050.00
By Year 2	1,050.00	1,050 × 5% = 52.50	1,102.50
By Year 10	1,551.33	1,551.33 × 5% = 77.57	1,628.90
By Year 30	4,116.14	4,116.14 × 5% = 205.81	4,321.95

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.

1. ASNB (Amanah Saham Nasional Berhad) Fixed & Variable Priced Funds

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.

Fund Type	Minimum Investment
Fixed Priced Funds	RM1
Variable Priced Funds	RM10

➡️Learn more:

Note: ASNB Funds have both Conventional and Shariah-Compliant offerings. Returns are not guaranteed and may vary depending on market conditions.

2. e-Gold Investment Account (eGIA)

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.

3. Unit Trust/Shariah-Compliant Unit Trust

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:

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.

✅ Automate monthly savings, even RM50/month makes a difference.

✅ Use CIMB OCTO app to track and manage your investments.

✅ Set a goal: RM10K in 5 years? RM100K in 10 years? Let compounding interest/reinvestment profits help you get there.

✅ Don’t wait for “the right time”, just start 🌱.

This article is for informational purposes only and CIMB does not make any representation and warranty as to the accuracy, completeness and fairness of any information contained in this article. As this article is general in nature, it is not intended to address the circumstances of any particular individual or entity. You are advised to consult a financial advisor or investment professional before making any decisions based on the information contained in this article. CIMB assumes no liability for any consequences arising from your reliance on the information presented here.