1. What is the SoFi High Yield Savings Account?

SoFi's High Yield Savings Account offers competitive interest rates (currently 3.80% APY with direct deposit) with no account fees. It uses daily compounding interest to help your savings grow faster than traditional savings accounts.

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, e.g., 0.038 for 3.8%)
• \( t \) — Time the money is invested for (years)

Explanation: The formula calculates daily compounding (365 times per year) which helps your money grow faster than simple interest or less frequent compounding.

3. Importance of Compound Interest

Details: Compound interest means you earn interest on both your initial deposit and on the interest that accumulates over time. This creates exponential growth of your savings, especially over longer periods.

4. Using the Calculator

Tips:

• Enter your initial deposit amount in dollars
• Enter the number of years you plan to save
• The default interest rate is 3.8% (0.038) which is SoFi's current APY with direct deposit
• You can adjust the rate if you're comparing different accounts

5. Frequently Asked Questions (FAQ)

Q1: What is SoFi's current APY?
A: As of 2023, SoFi offers 3.80% APY on savings accounts with direct deposit (rates subject to change).

Q2: How often is interest compounded?
A: SoFi compounds interest daily and credits it to your account monthly.

Q3: Are there any fees?
A: SoFi has no account fees, no minimum balance requirements, and no overdraft fees.

Q4: How does this compare to regular savings accounts?
A: Traditional bank savings accounts typically offer 0.01%-0.10% APY, while high-yield accounts like SoFi offer much better returns.

Q5: Is my money safe in a SoFi account?
A: Funds are FDIC-insured up to $250,000 through SoFi's partner banks.