1. What is the High Yielding Savings Calculator?

This calculator estimates the growth of your money in a high-yield savings account like American Express using daily compounding interest. It helps you project how your savings will grow over time with a fixed APY.

2. How Does the Calculator Work?

The calculator uses the compound interest formula:

Where:

• \( A \) — Final amount ($)
• \( P \) — Principal amount ($)
• \( r \) — Annual interest rate (decimal, e.g., 0.0425 for 4.25%)
• \( t \) — Time in years

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

3. Importance of Compound Interest

Details: Compound interest allows your money to grow exponentially over time as you earn interest on both your principal and accumulated interest. High-yield savings accounts typically offer much better returns than traditional savings accounts.

4. Using the Calculator

Tips: Enter your initial deposit amount in dollars, the annual interest rate as a decimal (e.g., 0.0425 for 4.25%), and the time period in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How often is interest compounded in high-yield savings accounts?
A: Most high-yield savings accounts, including Amex, compound interest daily and credit it to your account monthly.

Q2: Are high-yield savings accounts safe?
A: Yes, when offered by FDIC-insured banks (like Amex), they are protected up to $250,000 per depositor.

Q3: How does this compare to CD or money market accounts?
A: Savings accounts offer more liquidity than CDs (no fixed term) and typically better rates than money markets, though rates may change.

Q4: Are there any fees or minimums with Amex savings?
A: Amex currently has no monthly fees and no minimum balance requirements.

Q5: How often do rates change?
A: Rates can change based on Federal Reserve policy and market conditions, though they tend to remain competitive.