Back in November 2020, Coinbase gave users the chance to earn $6 of ALGO through its 'Coinbase Earn' programme. I suspect that many of those users kept their earned ALGO on Coinbase, particularly as they could take advantage of staking rewards of 6% APY. That's certainly what I did, and over time (mainly as a result of the bull market rather than the staking), my ALGO increased in value to over $20.

However Coinbase has now cut its staking reward to 4% APY:

The good news is that it is easy to move your ALGO elsewhere and take advantage of higher rates. Personally, I would recommend Trust wallet. This is a non-custodial wallet (so you have control of your private keys) and it currently pays 6.1% APY on ALGO.

Moving your ALGO from Coinbase is both super-quick and super-cheap. The Algorand network fee is tiny, currently sitting at around 0.001 ALGO per transaction (much less than one cent). Even better, your ALGO will arrive a few seconds after it is sent.

There is one other small cost to take into account. Whenever a new ALGO wallet is activated, 0.1 ALGO is deducted from the first deposit. So if you are not already holding any ALGO in Trust, bear this in mind. Trust does warn you that "Accounts require a minimum balance of 0.1 Algos", but I don't think this is particularly clear. You won't ever get that 0.1 ALGO back!

For this reason, you might want to keep a small amount of ALGO on Coinbase. This means you won't have to pay another activation fee if you choose to use Coinbase for ALGO again in the future. To be honest, I don't know whether the fee would apply in this case anyway as Coinbase is custodial.

The best part about staking ALGO in Trust is that it happens automatically, as long as you are holding at least 1 ALGO in your wallet. The reward frequency is approximately every 20 minutes (ie your balance will tick up regularly).

Although staking happens automatically, compounding (effectively, the rewards you earn on the rewards you've earned) does not. Captainaltcoin says:

"The compounding effect is not automatic. These are the rewards calculated from the last recorded balance on the blockchain. Compounding rewards is fairly straightforward. The easiest way to compound rewards is to send a zero Algo transaction to the target address on a recurring basis."

Of course, you will have to pay the (tiny) network fee every time you make this zero transaction.

One final note - I mentioned on Noise.cash that Trust offers 6.1% APY on ALGO, and another user pointed out that ALGO itself is so inflationary that this represents a negative return:

I'll have to do more reading around this, but it seemed only right for me to include the comment in this article. Certainly an APY of 6.1% is better than an APY of 4%, so moving your ALGO from Coinbase to Trust while you do your own research can't be a bad thing. Plus, it makes sense to hold your assets on a non-custodial wallet where risk is reduced.

Good luck and high returns!