1. What is the Amex Savings Interest Formula?

The Amex Savings Interest formula calculates the compound interest earned on a savings account with daily compounding, which is how American Express personal savings accounts accrue interest.

2. How Does the Calculator Work?

The calculator uses the daily compounding formula:

Where:

• \( P \) — Principal amount ($)
• \( r \) — Annual interest rate (decimal, e.g., 0.036 for 3.6%)
• \( t \) — Time period in years
• 365 — Number of compounding periods per year (daily)

Explanation: The formula accounts for daily compounding, which means interest is calculated on your principal plus previously earned interest every day.

3. Importance of Interest Calculation

Details: Understanding how much interest your savings will earn helps with financial planning and comparing different savings account options.

4. Using the Calculator

Tips: Enter your principal amount in dollars, time period in years, and the annual interest rate as a decimal (3.6% = 0.036). The default rate is set to Amex's current 3.60% APY.

5. Frequently Asked Questions (FAQ)

Q1: Is the Amex savings rate fixed?
A: No, the rate is variable and can change. Always check the current rate before making calculations.

Q2: How often is interest paid?
A: Amex personal savings accounts pay interest monthly, though it compounds daily.

Q3: Are there any fees that affect the interest?
A: Amex personal savings has no monthly fees, so the full APY is earned on your balance.

Q4: What's the difference between APR and APY?
A: APR doesn't account for compounding, while APY does. Savings accounts use APY to show the actual yield.

Q5: Is there a minimum balance to earn interest?
A: Amex requires no minimum balance to open the account or earn interest.