A savings account has a pre-defined interest earning rate and period (e.g. monthly) and typically pay interest on top of the interest that was earned in prior periods (hence the "compound" interest).

ETFs (and equities in general) do not "compound" in the same way. Their price is based on the value of the underlying stocks (companies) and change continuously (up and down). Since the growth of those companies is typically measured in relative terms (e.g. company x grows by 10% per year), that growth compounds and _looks _like compound interest (e.g. the stock for x grows at 10% per year). That growth is also continuous (or at least not always at the same time of the year) so the "growth" of the stock is also continuous.

You can see this exponential growth in long-term graphs of large indexes like the S&P 500. It has periods of large ups and downs, but overall it looks just like an exponential (compound) growth curve at a constant rate. Individual companies do not all look that way since they can have much larger ups and downs, but the market overall does tend to look like an exponential growth curve.

Also note that reinvesting dividends is not an example of "compounding". Dividends are just changing equity to cash, so if you reinvest a dividend that is paid, you should have the exact same amount that you did prior to the dividend. For example, if you own one share of a company that is worth $100 per share, and the company pays a $10 dividend, that company is now worth $90 per share (since it's just giving cash to investors), so you now have $90 in stork and $10 in cash. If you reinvest it in the company, you again have $100 of stock in the company.

A savings account has a pre-defined interest earning rate and period (e.g. monthly) and typically pay interest on top of the interest that was earned in prior periods (hence the "compound" interest).

ETFs (and equities in general) do not "compound" in the same way. They do not pay "interest" - their value is based on the value of the underlying stocks (companies) and change continuously (up and down). Since the growth of those companies is typically measured in relative terms (e.g. company x grows by 10% per year), that growth compounds and looks like compound interest (e.g. the stock for x grows at 10% per year). That growth is also continuous (or at least not always at the same time of the year) so the "growth" of the stock is also continuous.

You can see this exponential growth in long-term graphs of large indexes like the S&P 500. It has periods of large ups and downs, but overall it looks just like an exponential (compound) growth curve at a constant rate. Individual companies do not all look that way since they can have much larger ups and downs, but the market overall does tend to look like an exponential growth curve.

Also note that reinvesting dividends is not an example of "compounding". Dividends are just changing equity to cash, so if you reinvest a dividend that is paid, you should have the exact same amount that you did prior to the dividend. For example, if you own one share of a company that is worth $100 per share, and the company pays a $10 dividend, that company is now worth $90 per share (since it's just giving cash to investors), so you now have $90 in stork and $10 in cash. If you reinvest it in the company, you again have $100 of stock in the company.