335 views Savings Information Savings amount? $ Dividend rate? % Evaluation period (years)? Printer-friendly version Annual Percentage Yield by Compounding Method Yearly Quarterly Monthly Daily Chart Table Savings Balance at End of Evaluation Period Yearly Compounding Quarterly Compounding Monthly Compounding Daily Compounding Savings Balance Submit How dividends are calculated can have a great impact on the dividends earned by your account and how your savings grow. Compound dividends arises when dividends are added to the principal and when the dividends that have also been added earns dividends. You will see your account balance grow more quickly with accounts that pay dividends more frequently. The "Annual Percentage Yield" or APY is the effective annual rate of return once the effect of compounding dividends is factored in.