Marcus Savings Calculator

Marcus Savings Formula:

\[ A = P \times (1 + \frac{r}{365})^{(365 \times t)} \]

Final Amount (A):

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1. What is the Marcus Savings Formula?

The Marcus Savings formula calculates the future value of an investment with daily compounding interest. It's particularly relevant for Marcus by Goldman Sachs high-yield savings accounts which offer competitive APY (Annual Percentage Yield) with daily compounding.

2. How Does the Calculator Work?

The calculator uses the daily compounding formula:

\[ A = P \times (1 + \frac{r}{365})^{(365 \times t)} \]

Where:

$ A $ — Final amount ($)
$ P $ — Principal investment amount ($)
$ r $ — Annual interest rate (decimal, e.g., 0.0365 for 3.65%)
$ t $ — Time the money is invested for (years)

Explanation: The formula accounts for daily compounding (365 times per year), which slightly increases returns compared to simple annual compounding.

3. Importance of Daily Compounding

Details: Daily compounding means interest is calculated and added to the account balance every day, leading to slightly higher returns than monthly or annual compounding over time.

4. Using the Calculator

Tips: Enter principal amount in dollars, time period in years, and annual interest rate as a decimal (e.g., 3.65% = 0.0365). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between APR and APY?
A: APR (Annual Percentage Rate) doesn't account for compounding, while APY (Annual Percentage Yield) does. This calculator uses APY for more accurate results.

Q2: How does Marcus' 3.65% APY compare to other banks?
A: As of 2023, 3.65% is competitive for high-yield savings accounts, typically outperforming traditional brick-and-mortar bank savings rates.

Q3: Is there a minimum balance for Marcus savings?
A: Marcus requires no minimum balance to open an account or avoid fees, making it accessible for all savers.

Q4: Are there any fees with Marcus savings?
A: Marcus has no monthly maintenance fees or transfer fees, though standard banking regulations may apply for excessive withdrawals.

Q5: How often does the interest rate change?
A: High-yield savings account rates are variable and may change based on Federal Reserve decisions and market conditions.