1. What is the Daily Compounding Formula?

The daily compounding formula calculates how much your savings will grow when interest is compounded daily. Marcus Bank's high-yield savings account uses this method with a competitive APY (currently 3.65% as default in this calculator).

2. How Does the Calculator Work?

The calculator uses the daily compounding 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

Explanation: Interest is calculated and added to the principal balance each day, leading to exponential growth over time.

3. Benefits of Daily Compounding

Details: Daily compounding yields slightly more than monthly or annual compounding because interest earns interest more frequently. Marcus Bank's 3.65% APY compounded daily provides better returns than accounts with less frequent compounding.

4. Using the Calculator

Tips: Enter your initial deposit amount, the number of years you plan to save, and the annual interest rate (default is 0.0365 for 3.65% APY). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How often does Marcus Bank compound interest?
A: Marcus compounds interest daily and pays it monthly.

Q2: Is the interest rate guaranteed?
A: No, high-yield savings account rates can change based on market conditions.

Q3: Are there any fees with Marcus savings accounts?
A: Marcus has no monthly maintenance fees or minimum balance requirements.

Q4: How does daily compare to monthly compounding?
A: Daily compounding yields slightly more due to more frequent interest calculations.

Q5: Can I withdraw money anytime?
A: Yes, Marcus savings accounts allow up to 6 withdrawals per month without penalty.