1. What is the CD Compound Interest Formula?

The compound interest formula calculates how much your Certificate of Deposit (CD) will be worth at maturity. Marcus by Goldman Sachs® offers competitive CD rates (typically 3.75%–4.25% APY for high-yield CDs).

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)
• \( n \) — Number of compounding periods per year
• \( t \) — Time the money is invested for (years)

Explanation: More frequent compounding (daily vs. monthly) results in slightly higher returns due to the effect of compounding.

3. Understanding CD Interest Rates

Details: CD rates are fixed for the term length. Marcus CDs typically offer terms from 6 months to 6 years, with higher rates for longer terms.

4. Using the Calculator

Tips: Enter your initial deposit, Marcus CD interest rate (as a percentage), term length in years (can use decimals for partial years), and select compounding frequency.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between APY and interest rate?
A: APY (Annual Percentage Yield) includes compounding effects, while the interest rate doesn't. For accurate calculations, use the stated interest rate with this calculator.

Q2: Are Marcus CD rates competitive?
A: Marcus CDs typically offer rates in the top 5% nationally, currently between 3.75%–4.25% APY for high-yield CDs.

Q3: Is there a penalty for early withdrawal?
A: Yes, Marcus CDs have early withdrawal penalties ranging from 90 days to 365 days of interest depending on term length.

Q4: How is interest paid out?
A: Marcus CDs compound interest daily and pay it at maturity, unless you choose a CD with monthly interest payments.

Q5: Are CD investments FDIC insured?
A: Yes, Marcus CDs are FDIC insured up to $250,000 per depositor, per institution.