A Simple interest is calculated on the original amount you invest , compound interest is added to your investment and from then on you earn "interest on the interest" in addition to interest on the original investment. Compound interest can be compounded daily , weekly, monthly , six monthly , annually or any other time period. You earn more interest if it is compounded daily instead of annually for example , although at low rates - 2 to 5 % for example - the difference isn't that great unless you invest a large amount.
