1. What is the Marcus CD Calculator?

The Marcus CD Calculator helps you estimate the growth of your Certificate of Deposit (CD) or savings account using daily compounding interest. It's particularly useful for Marcus by Goldman Sachs® accounts, but can be used for any daily compounding investment.

2. How Does the Calculator Work?

The calculator uses the compound interest formula:

Where:

• \( A \) — Final amount ($)
• \( P \) — Principal amount ($)
• \( r \) — Annual interest rate (as decimal)
• \( t \) — Time in years

Explanation: The formula calculates how your money grows with daily compounding, which means interest is calculated and added to your balance every day.

3. Importance of Compound Interest

Details: Compound interest allows your money to grow exponentially over time. Daily compounding (as used by Marcus) provides slightly better returns than monthly or annual compounding.

4. Using the Calculator

Tips: Enter your initial deposit, the annual interest rate (APY), and the time period in years. The calculator will show your final balance and total interest earned.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between APR and APY?
A: APR is the simple interest rate, while APY includes compounding effects. Marcus CDs use APY which already accounts for daily compounding.

Q2: Are there penalties for early withdrawal from CDs?
A: Yes, Marcus CDs typically have early withdrawal penalties that vary by term length. This calculator doesn't account for penalties.

Q3: How often is interest paid out?
A: Marcus CDs typically pay interest at maturity, though some offer monthly payouts. This calculator assumes interest remains invested.

Q4: Are CD interest rates fixed?
A: Yes, Marcus CD rates are fixed for the term. This differs from savings accounts where rates can change.

Q5: What's the minimum deposit for Marcus CDs?
A: Marcus requires a minimum $500 deposit for CDs, but this calculator works with any amount.