1. What is Daily Compounding?

Daily compounding means interest is calculated and added to your principal balance every day, allowing your savings to grow faster over time compared to monthly or annual compounding.

2. How Does the Calculator Work?

The calculator uses the daily compounding formula:

Where:

• \( A \) — Final amount ($)
• \( P \) — Principal amount ($)
• \( r \) — Annual interest rate (decimal, e.g., 0.0365 for 3.65%)
• \( t \) — Time in years

Explanation: The formula accounts for interest being calculated and added daily, which results in slightly higher returns than simple annual compounding.

3. Benefits of Daily Compounding

Details: Daily compounding maximizes your earnings by applying interest more frequently. Even small differences in compounding frequency can lead to significant differences in returns over long periods.

4. Using the Calculator

Tips: Enter your initial deposit amount in dollars, the annual interest rate as a decimal (e.g., 0.0365 for 3.65%), and the number of years you plan to save. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How does Marcus' 3.65% APY compare to other banks?
A: Marcus (Goldman Sachs) typically offers competitive rates, often higher than traditional brick-and-mortar banks but similar to other online banks.

Q2: Is the interest rate guaranteed to stay the same?
A: No, high-yield savings account rates can change based on market conditions and Federal Reserve policies.

Q3: Are there any fees with Marcus accounts?
A: Marcus generally has no monthly fees or minimum balance requirements, but always check current terms.

Q4: How often is interest paid out?
A: While interest is calculated daily, it's typically paid out monthly.

Q5: Is my money safe in a Marcus account?
A: Yes, Marcus accounts are FDIC insured up to $250,000 per depositor.