The incentive for banks to offer compound interest is exchange for large amounts of deposits.
According to this article, Citi Bank offers compound interest on two different types of accounts. "They offer two different kinds of compound interest savings accounts. The first kind of savings account they offer is a Preferred Account. This account requires a minimum daily balance of $25,000. With this account, one percent interest is compounded daily. The second account that they offer is a Starter Account. This account only requires a $100 daily balance. If you have this account, they compound interest monthly at 0.90 percent."
Credit card companies, mortgage banks, and others charge you compound interest. So as certain institutions charge you compound interest, why not try and earn compound interest for yourself?
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