1. What is the High Yield Savings Formula?

The formula calculates compound interest for high-yield savings accounts like Goldman Sachs (Marcus) or American Express, which compound interest daily. This gives slightly better returns than simple annual compounding.

2. How Does the Calculator Work?

The calculator uses the daily compounding formula:

Where:

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

Explanation: The formula accounts for daily compounding (365 times per year), which is how most high-yield savings accounts operate.

3. Current Rates (2024)

Current Rates:

• Goldman Sachs Marcus: 4.40% APY
• American Express: 4.25% APY
• Discover: 4.20% APY
• Capital One: 4.25% APY

Note: Rates change frequently. Check with your bank for current rates.

4. Using the Calculator

Tips: Enter principal amount in dollars, annual interest rate in percentage (e.g., 4.40 for Marcus), and time period in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How often is interest paid?
A: Most high-yield savings accounts pay interest monthly, though it compounds daily.

Q2: Are these accounts FDIC insured?
A: Yes, both Marcus and Amex savings accounts are FDIC insured up to $250,000 per depositor.

Q3: What's the difference between APR and APY?
A: APR doesn't account for compounding, while APY does. For savings accounts, always look at APY.

Q4: Are there any fees?
A: Typically no monthly fees for these accounts, but check with your provider.

Q5: How does this compare to regular savings accounts?
A: High-yield accounts offer 10-20x higher interest than traditional savings accounts (which average 0.05% APY).