1. What is the SoFi Savings Calculator?

The SoFi High Yield Savings Calculator helps you estimate the growth of your savings with SoFi's competitive APY (Annual Percentage Yield) using daily compounding interest. It's particularly useful for planning long-term savings goals.

2. How Does the Calculator Work?

The calculator uses the daily compounding formula:

Where:

• \( A \) — Final amount ($)
• \( P \) — Principal investment amount ($)
• \( r \) — Annual interest rate (decimal, e.g., 0.038 for 3.8%)
• \( t \) — Time the money is invested for (years)
• 365 — Number of compounding periods per year (daily)

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

3. Understanding Daily Compounding

Details: With SoFi's 3.80% APY (as of 2023), daily compounding means you earn interest on your interest every day, which can significantly boost your savings compared to simple interest or monthly compounding.

4. Using the Calculator

Tips: Enter your initial deposit amount in dollars, the number of years you plan to save, and the interest rate (default is 0.038 for 3.8% APY). The calculator will show your projected balance.

5. Frequently Asked Questions (FAQ)

Q1: How does SoFi's APY compare to traditional banks?
A: SoFi's 3.80% APY is significantly higher than the national average of 0.42% for traditional savings accounts (as of 2023).

Q2: Is the interest rate guaranteed?
A: APY may change over time based on market conditions. SoFi may adjust rates but typically remains competitive.

Q3: Are there any fees with SoFi savings?
A: SoFi doesn't charge monthly maintenance fees or require minimum balances for their high-yield savings.

Q4: How often is interest paid?
A: Interest is compounded daily and credited to your account monthly.

Q5: Can I withdraw money anytime?
A: Yes, SoFi savings accounts allow up to 6 withdrawals per month without penalty, in compliance with federal regulations.