SoFi High Yield Savings Calculator vs Amex

Compound Interest Formula:

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

SoFi Final Amount (3.80% APY):

Amex Final Amount (3.60% APY):

Difference (SoFi - Amex):

1. What is the Compound Interest Formula?

The compound interest formula calculates how money grows over time when interest is earned on both the initial principal and accumulated interest. Daily compounding (common for savings accounts) means interest is calculated and added to the balance each day.

2. How Does the Calculator Work?

The calculator uses the compound interest formula:

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

Where:

$ A $ — Final amount ($)
$ P $ — Principal amount ($)
$ r $ — Annual interest rate (decimal)
$ t $ — Time in years
365 — Number of compounding periods per year (daily)

Explanation: The formula accounts for daily compounding, which means interest is calculated and added to the balance every day, leading to exponential growth.

3. Comparing SoFi and Amex Savings

Details: SoFi currently offers 3.80% APY while Amex offers 3.60% APY. This calculator shows how the 0.20% difference impacts your savings over time. Even small rate differences can result in significant amounts over several years.

4. Using the Calculator

Tips: Enter your initial deposit amount and the number of years you plan to keep the money in the account. The calculator will show projected balances for both SoFi and Amex savings accounts.

5. Frequently Asked Questions (FAQ)

Q1: Are these rates guaranteed?
A: No, high-yield savings account rates can change. These are current rates as of 2023.

Q2: Is the interest compounded daily?
A: Yes, both SoFi and Amex savings accounts compound interest daily and credit it monthly.

Q3: Are there any fees?
A: Both accounts have no monthly maintenance fees or minimum balance requirements.

Q4: Which account is better?
A: While SoFi currently offers a slightly higher rate, consider other factors like customer service, mobile app features, and your existing banking relationships.

Q5: How often do rates change?
A: Rates can change monthly based on Federal Reserve policy and market conditions.