Fixed investment of funds means that investors set a fixed investment plan and choose to buy funds in batches at a fixed time and amount. In real life, many users don't have the time and energy, so they choose to invest in funds by fixed investment to obtain stable income. So is the income of fixed investment calculated in the form of simple interest or compound interest?

Is the return of fixed investment simple or compound?

Whether the income of the fund's fixed investment is calculated by simple interest or compound interest mainly depends on what dividend distribution method investors choose. If it is dividend reinvestment, the income will be calculated together with the fund principal, resulting in compound interest. However, if the cash dividend has been paid and the money is returned to the investor's personal account, then there will be no compound interest effect.

Investors investing in funds is a long-term investment process. Continue to invest the dividends and profits of investment funds into the process and result of realizing rolling interest bearing, which will have a strong compound interest effect. Therefore, for investors, it is not only a lazy investment method, but also a process of pursuing compound interest and excess returns.

In addition, the fixed investment of the fund is not endless. Investors should also set a target rate of return in the process of fixed investment. By setting the profit-taking point and taking profit in time, stable investment income can be obtained more effectively. When the profit-taking goal is achieved, investors can rationally analyze and judge and then choose to sell them all at once. If you are not sure about the fund's later trend or are still optimistic, investors can sell it in batches.

Generally speaking, if you choose dividend reinvestment to make a fixed investment in the fund, it will have a compound interest effect in the long run.