Simple interest pays only on the original principal; compounding pays interest on interest, and the compounding frequency (yearly, monthly, daily) nudges the result higher. Over long periods the gap becomes dramatic — the reason savings started early outperform larger amounts started late.
Almost always compound, typically calculated daily or monthly.
It helps, with diminishing returns: daily vs monthly differs far less than compound vs simple.
No — interest income may be taxable depending on your residency.
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