1. What is the SoFi HYSA Calculator?

This calculator estimates the growth of your savings in a SoFi High-Yield Savings Account (HYSA) using daily compounding interest. It helps project how your money will grow over time with a fixed APY.

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, e.g., 0.046 for 4.6%)
• \( t \) — Time in years

Explanation: The formula accounts for daily compounding (365 times per year), which maximizes your earnings compared to simple interest or less frequent compounding.

3. Importance of Daily Compounding

Details: Daily compounding means interest is calculated on your balance every day, including previously earned interest. This "interest on interest" effect accelerates growth over time.

4. Using the Calculator

Tips: Enter your initial deposit in dollars, the current APY as a decimal (e.g., 0.046 for 4.6%), and the time period in years. The calculator will show your projected balance.

5. Frequently Asked Questions (FAQ)

Q1: What is SoFi's current APY?
A: As of 2023, SoFi offers 4.60% APY (0.046 in decimal form), but rates may change. Always check their current rate before calculating.

Q2: How often is interest paid?
A: SoFi pays interest monthly, but it compounds daily for maximum growth.

Q3: Are there any account fees?
A: SoFi HYSAs have no monthly fees and no minimum balance requirements.

Q4: Is my money FDIC insured?
A: Yes, SoFi savings accounts are FDIC insured up to $250,000 per depositor.

Q5: How does this compare to regular savings accounts?
A: HYSAs typically offer 10-20x higher interest than traditional savings accounts (0.01%-0.05% APY).