When a ligand bonds with the central metal ion in such a way that it forms a ring, then it is found that the metal - ligand bond is more stable. In other way a compound which forms chelate ring are more stable than the complexes without chelate rings. This effect is known as chelate effect.

In this example we can see that the ligand form a closed ring structure around central atom and increase the stability of complex with forming a stron bond between them.