1. What is the High Yield Savings Calculator?

This calculator estimates the growth of your money in a high-yield savings account like American Express Personal Savings, which compounds interest daily. It helps you project your savings growth over time.

2. How Does the Calculator Work?

The calculator uses the daily compound interest formula:

Where:

• \( A \) — Final amount ($)
• \( P \) — Principal investment amount ($)
• \( r \) — Annual interest rate (decimal, e.g., 0.0425 for 4.25%)
• \( t \) — Time the money is invested for (years)

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

3. Importance of Compound Interest

Details: Compound interest can significantly boost your savings over time. High-yield savings accounts like Amex offer better rates than traditional banks, helping your money grow faster while remaining FDIC-insured.

4. Using the Calculator

Tips: Enter your initial deposit in dollars, the APY as a decimal (e.g., 0.0425 for 4.25%), and the time period in years. The calculator will show your projected balance.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between APY and APR?
A: APY (Annual Percentage Yield) includes compound interest, while APR (Annual Percentage Rate) doesn't. Savings accounts use APY.

Q2: How often does Amex compound interest?
A: American Express Personal Savings compounds interest daily and credits it monthly.

Q3: Are there any fees with Amex savings?
A: No monthly maintenance fees or minimum balance requirements for Amex Personal Savings.

Q4: How does this compare to CD rates?
A: High-yield savings offer liquidity while CDs typically offer slightly higher rates for locking up your money.

Q5: Is my money safe in a high-yield savings account?
A: Yes, Amex Personal Savings is FDIC-insured up to $250,000 per depositor.