Part 3/9:
Consider the comparison between Singapore's CPF (Central Provident Fund) savings and Singapore Savings Bonds. CPF accounts offer interest that compounds internally, meaning interest earned is added back into the account, leading to growth on interest accumulated earlier. Conversely, Savings Bonds typically pay out interest based on the initial principal, without compounding on previous interest gains.
This distinction highlights why choosing investment options that leverage compound interest can significantly boost long-term returns, especially for young investors with a longer horizon.