1. What is the Marcus High Yield CD Calculator?

The Marcus High Yield CD Calculator helps you estimate the growth of your Certificate of Deposit investment using daily compounding interest. It's particularly useful for Marcus CDs which currently offer competitive APY rates like 3.90% for 20-month terms.

2. How Does the Calculator Work?

The calculator uses the daily compounding formula:

Where:

• \( A \) — Final amount ($)
• \( P \) — Principal investment ($)
• \( r \) — Annual interest rate (decimal, e.g., 0.039 for 3.9%)
• \( t \) — Time in years

Explanation: The formula accounts for daily compounding, which means interest is calculated and added to the principal 365 times per year.

3. Importance of CD Growth Calculation

Details: Understanding your CD's growth potential helps with financial planning, comparing investment options, and setting realistic savings goals.

4. Using the Calculator

Tips: Enter your principal amount in dollars, the annual interest rate as a decimal (e.g., 0.039 for 3.9%), and the time period in years (e.g., 1.67 for 20 months).

5. Frequently Asked Questions (FAQ)

Q1: How does Marcus CD interest compare to regular savings?
A: Marcus CDs typically offer higher rates than regular savings accounts, with the trade-off of locking your funds for the term duration.

Q2: What happens if I withdraw my CD early?
A: Early withdrawal typically incurs a penalty, often several months' worth of interest.

Q3: Are CD earnings taxable?
A: Yes, interest earned on CDs is taxable as income in the year it's credited.

Q4: How does the 20-month CD rate compare to other terms?
A: Marcus often offers competitive rates for mid-term CDs like 20 months, which may be higher than both shorter and longer terms.

Q5: Can I automatically reinvest my CD?
A: Marcus typically offers automatic renewal options at the current rate when your CD matures.