Interest on interest
Compound interest means you earn interest not only on your money but also on the interest you have already earned. In the first year the difference is barely visible. After several years it becomes huge — which is why it is called a snowball.
Simple vs compound, one example
You put 10,000,000 so‘m in a deposit at 20% a year. With simple interest you get 2,000,000 each year — 16,000,000 after 3 years. With monthly capitalization, each month's interest is added to the balance and earns interest itself.
| Term | Simple interest | Monthly capitalization |
|---|---|---|
| 1 year | 12,000,000 | 12,193,911 |
| 3 years | 16,000,000 | 18,131,304 |
Over three years that is more than 2 mln so‘m extra for doing nothing. Illustrative, before tax and rate changes; fixed-rate 3-year deposits are not always available.
What deposit capitalization is
Capitalization means earned interest is added to the deposit instead of being paid to your card. Check in the contract: whether there is capitalization and how often (monthly beats yearly); the effective rate (20% with monthly capitalization is about 21.9% a year); what happens on early withdrawal; and whether you can top up. If the bank pays interest to your card and you spend it, there is no compounding.
Regular contributions
Assumptions: top-up deposit, 18% a year (for illustration — check current rates in the catalogue), monthly capitalization.
| Monthly | Term | You put in | Balance | Of which interest |
|---|---|---|---|---|
| 500,000 | 1 year | 6,000,000 | ≈ 6,521,000 | ≈ 521,000 |
| 500,000 | 3 years | 18,000,000 | ≈ 23,638,000 | ≈ 5,638,000 |
| 500,000 | 5 years | 30,000,000 | ≈ 48,107,000 | ≈ 18,107,000 |
| 1,000,000 | 1 year | 12,000,000 | ≈ 13,041,000 | ≈ 1,041,000 |
| 1,000,000 | 3 years | 36,000,000 | ≈ 47,276,000 | ≈ 11,276,000 |
| 1,000,000 | 5 years | 60,000,000 | ≈ 96,215,000 | ≈ 36,215,000 |
In year one interest adds less than 10%; after five years it adds more than half of what you put in.
The "start early" effect
Aziz saves 1,000,000 a month from 25 to 30, then stops and leaves the money. Bahrom saves the same from 30 to 35. Both put in 60,000,000. At 35, Aziz has about 235,000,000 and Bahrom about 96,000,000 — nearly 2.5 times less, only because his money worked five years less.
Rule of 72: divide 72 by the annual rate to see roughly how many years it takes to double. At 18% — about 4 years; at 12% — about 6.
Calculate it yourself
For a one-off deposit: Final amount = Deposit × (1 + rate ÷ 12) ^ months. Example: 5,000,000 so‘m at 18% for 2 years with monthly capitalization → 5,000,000 × 1.015^24 ≈ 7,148,000 so‘m (6,800,000 without capitalization). For regular contributions use the calculator in the deposit catalogue.
What matters most: time (growth accelerates every year), regularity (skipped months never catch up), then the rate (1–2% matters less than 2–3 extra years), then capitalization frequency.
Compound interest also makes goals cheaper: saving 150,000,000 so‘m in 5 years takes 2,500,000 a month without interest, but about 1,560,000 in an illustrative 18% deposit with capitalization.
Don't forget inflation
What matters is the real return: deposit rate minus inflation. If a deposit pays 18% and prices rose 8%, your real gain is about 10%. The Central Bank publishes current inflation and the policy rate on cbu.uz.
The flip side: compound interest on debt
Interest on credit cards, microloans and overdue debt snowballs too. Paying off a 40–50% debt beats any deposit, so clear expensive debt first.
Use it now
Start with any amount, choose a deposit with capitalization and top-ups, don't withdraw the interest, automate transfers on payday, and clear expensive debts first.
Next step
Compare deposits with capitalization and top-ups in our deposit catalogue — the calculator shows what you will have. Then create a goal in My Goals and watch the snowball grow.