1. What is Monthly Compounding?

Monthly compounding means your interest is calculated and added to your principal each month, allowing you to earn interest on your interest. This results in faster growth compared to simple interest or annual compounding.

2. How the Calculator Works

The calculator uses the monthly compounding formula:

Where:

• \( A \) — Final amount
• \( P \) — Principal investment amount
• \( r \) — Annual interest rate (in decimal)
• \( t \) — Time in years

Explanation: The formula accounts for interest being calculated and added to the principal 12 times per year (monthly), with each month's interest calculation based on the new balance.

3. Benefits of High-Yield Savings

Details: High-yield savings accounts like Amex's offer significantly higher interest rates than traditional savings accounts, helping your money grow faster while remaining FDIC-insured and liquid.

4. Using the Calculator

Tips: Enter your initial deposit amount, the current APY (like 4.25%), and the number of years you plan to save. The calculator will show your projected balance and total interest earned.

5. Frequently Asked Questions (FAQ)

Q1: How does Amex's rate compare to regular banks?
A: Amex's high-yield savings typically offers 10-20x higher interest than traditional bank savings accounts.

Q2: Is my money safe in an Amex savings account?
A: Yes, funds are FDIC-insured up to $250,000 per depositor, per account ownership type.

Q3: How often does the interest compound?
A: Interest compounds daily and is credited monthly in Amex high-yield savings accounts.

Q4: Are there any fees or minimums?
A: Amex has no monthly fees and no minimum balance requirements.

Q5: Can I access my money when needed?
A: Yes, you can make up to 6 withdrawals per month without penalty (as per federal regulations).