# Calculating APY and compounding rates of investment on Coinbase

So I have been working on determining which is better: the Coinbase apy seen in coins such as DAI (2%), and Algorand (4%) and a bank's apy, say 0.6%. I have the calculations in Matlab, but wanted to verify that I had my understanding and formula's correct.

What is USDC Rewards Annual Percentage Yield and how is it calculated?
USDC Rewards Annual Percentage Yield (APY) means the percentage rate reflecting the total amount of USDC rewards earned, based on the then-current USDC Rewards Rate and end-of-month compounding for a 365-day period.

What is the current USDC Rewards rate?
USDC Rewards Rate is the annual rate of rewards earned on a USDC wallet, which does not reflect compounding. As of June 3rd, 2020, the USDC Rewards rate is 0.149896%. USD coin rewards

So I want to make sure I understand this right, assuming I figure out from the APY the base compound rate, this is compounded every month, correct? If so why does the second part state that this does not reflect compounding?

With reference to the Wikipedia nominal interest rate calculation

The USDC Rewards Rate is a nominal (annual) rate compounded monthly, from which the monthly rate `m` is obtained by division, i.e.

``````m = 0.149896/100/12 = 0.000124913
``````

So the USDC Rewards Rate is obtained by multiplication (simple interest)

``````12 m = 0.149896 %
``````

and the USDC Rewards Annual Percentage Yield is obtained by compounding

``````(1 + m)^12 - 1 = 0.00149999 = 0.15 %
``````

confirmed here https://help.coinbase.com/...

As of June 3rd, 2020, the APY for USDC Rewards is 0.15%.