1. What is the High Yield Savings Calculator?

This calculator helps you project the growth of your savings in a high-yield account like Marcus by Goldman Sachs, using daily compound interest. It shows how your money can grow over time with a competitive APY (Annual Percentage Yield).

2. How Does the Calculator Work?

The calculator uses the compound interest formula:

Where:

• \( A \) — Final amount
• \( P \) — Principal investment amount
• \( r \) — Annual interest rate (decimal)
• \( t \) — Time in years
• 365 — Number of compounding periods per year (daily)

Explanation: The formula calculates how your money grows with daily compounding, which is how most high-yield savings accounts operate.

3. Understanding Compound Interest

Details: Compound interest means you earn interest on both your original money and on the interest you keep accumulating. Daily compounding (as used here) gives slightly better returns than monthly or annual compounding.

4. Using the Calculator

Tips:

• Enter your initial deposit amount in dollars
• Use the current APY (like Marcus' 4.40% as of 2023)
• Project growth over different time periods (1 year, 5 years, etc.)
• Try different rates to compare savings options

5. Frequently Asked Questions (FAQ)

Q1: How accurate is this calculator?
A: It provides mathematical projections assuming constant rate and no withdrawals. Actual results may vary slightly due to rate changes or compounding methods.

Q2: Are high-yield savings accounts safe?
A: Yes, they are FDIC-insured up to $250,000 per depositor, per institution.

Q3: How often do interest rates change?
A: Rates can change based on Federal Reserve policies and market conditions. Most banks adjust rates monthly.

Q4: Is there a minimum balance required?
A: Many high-yield accounts have no minimum balance requirements, but check with your specific bank.

Q5: How does this compare to CDs or money market accounts?
A: Savings accounts offer more liquidity than CDs (no term commitment) and typically higher rates than regular savings, though rates may be lower than some CDs.