1. What is the Marcus High Yield CD?

Marcus High Yield Certificates of Deposit (CDs) are fixed-term savings products that typically offer higher interest rates than regular savings accounts. Your money grows at a fixed APY when you leave it deposited for the full term.

2. How Does Monthly Compounding Work?

The calculator uses the monthly compounding formula:

Where:

• \( A \) — Final amount including principal and interest
• \( P \) — Principal investment amount
• \( r \) — Annual interest rate (in decimal form)
• \( t \) — Time in years

Explanation: Interest is calculated and added to the principal each month, resulting in "interest on interest" growth over time.

3. Benefits of Marcus CDs

Details: Marcus CDs offer competitive rates, FDIC insurance up to $250,000, and various term options. The monthly compounding helps your money grow faster compared to simple interest.

4. Using the Calculator

Tips: Enter your initial deposit amount, the current APY being offered (e.g., 3.90%), and the CD term length in years. The calculator will show your final balance and total interest earned.

5. Frequently Asked Questions (FAQ)

Q1: What is the minimum deposit for a Marcus CD?
A: Marcus typically requires a minimum deposit of $500 to open a CD.

Q2: Are there penalties for early withdrawal?
A: Yes, early withdrawal penalties apply (typically several months of interest) if you withdraw before maturity.

Q3: How does monthly compare to daily compounding?
A: Monthly compounding is slightly less advantageous than daily compounding, but the difference is minimal for most CD terms.

Q4: Are CD rates fixed or variable?
A: Marcus High Yield CDs offer fixed rates that remain the same for the entire term.

Q5: When is interest paid out?
A: Interest compounds monthly and is paid at maturity unless you choose a CD with periodic interest payouts.