1. What is Compound Interest?

Compound interest is interest calculated on the initial principal and also on the accumulated interest of previous periods. It causes wealth to grow faster than simple interest because you earn interest on interest.

2. How the Calculator Works

The calculator uses the daily compounding formula:

Where:

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

For monthly contributions, the calculator adds the future value of a series formula: \[ A_{add} = PMT \times \frac{(1 + \frac{r}{12})^{12 \times t} - 1}{\frac{r}{12}} \]

3. Marcus vs Amex Comparison

Marcus: Currently offers 3.65% APY with no minimum balance requirements and no fees.

Amex: Currently offers 3.60% APY, also with no minimum balance and no monthly fees.

While the difference seems small (0.05%), over time with compound interest this can add up to significant differences in earnings.

4. Using the Calculator

Tips: Enter your initial deposit, number of years you plan to save, and any additional monthly deposits you plan to make. The calculator will show you the projected growth in both accounts.

5. Frequently Asked Questions (FAQ)

Q1: Are these rates guaranteed?
A: No, high-yield savings account rates can change based on Federal Reserve policy and market conditions.

Q2: Is my money safe in these accounts?
A: Both Marcus and Amex savings accounts are FDIC insured up to $250,000 per depositor.

Q3: How often is interest compounded?
A: Both accounts compound interest daily and credit it to your account monthly.

Q4: Are there any fees?
A: Neither Marcus nor Amex charge monthly maintenance fees for their high-yield savings accounts.

Q5: Which account is better?
A: While Marcus currently has a slightly higher rate, both are excellent options. Consider other factors like customer service and existing banking relationships.