Compound interest is interest that is added to the initial investment, or 'principal' of a deposit, so that the investment plus the added interest also earns interest from then on.
For example, you will earn interest as follows -
Month 1: earn Interest on your Initial Investment
Month 2: earn Interest on your Initial Investment plus the Interest from Month 1
Month 3: earn Interest on Initial Investment, plus all the Interest earned from Month 1 and Month 2
... and so this continues.
For numerical examples of compound interest, click here.
You can also find out more about Compounding Interest from the following external link - http://www.investopedia.com/terms/c/compoundinterest.asp