1. What is the Marcus High Yield CD?

The Marcus High Yield CD is a certificate of deposit offered by Marcus by Goldman Sachs that provides competitive interest rates with daily compounding. CDs offer fixed interest rates for set terms, typically ranging from 6 months to 6 years.

2. How Does the Calculator Work?

The calculator uses the daily compound interest formula:

Where:

• \( P \) — Principal amount ($)
• \( r \) — Annual interest rate (decimal)
• \( t \) — Time in years
• 365 — Number of compounding periods per year (daily)

Explanation: The formula calculates how much your investment grows with daily compounding interest over time.

3. Understanding Compound Interest

Details: Compound interest means you earn interest on both your initial principal and the accumulated interest from previous periods. Daily compounding results in slightly higher returns than monthly or annual compounding.

4. Using the Calculator

Tips: Enter the principal amount in dollars, the annual interest rate (e.g., 3.90 for 3.90% APY), and the term length in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is the difference between APY and APR?
A: APY (Annual Percentage Yield) includes compounding effects, while APR (Annual Percentage Rate) does not. For CDs, APY gives the true annual return.

Q2: Are Marcus CDs FDIC insured?
A: Yes, Marcus CDs are FDIC insured up to $250,000 per depositor, per account type.

Q3: What happens if I withdraw early?
A: Early withdrawal typically incurs a penalty, usually several months of interest.

Q4: How does this compare to savings accounts?
A: CDs generally offer higher rates than savings accounts but require locking up funds for the term length.

Q5: Are CD interest rates fixed?
A: Yes, Marcus CDs offer fixed rates that don't change during the term.