You can earn interest on your crypto holdings just like you would with a savings account in a bank. Crypto interest accounts or crypto savings accounts are offerings from crypto platforms that let you earn interest on digital assets that lend out to them.
What to know before investing in bitcoin
- Bitcoin investment is associated with serious risks that include the risk of total loss of your funds. Generally, bitcoin investments have not statutory/voluntary deposit insurance or state protection/supervision. It takes time and effort to find the safest crypto savings account.
- Don’t trade or invest in bitcoin more than you can afford or willing to lose. We recommend that you invest not more than 10% of your funds into bitcoin.
- The best way to protect your bitcoin is to “hodl” and only store in non-custodial wallets. Don’t leave your bitcoin on a third party wallet. All bitcoin you store elsewhere apart from your personal wallet can be lost. Always have safe backups for when your wallet gets lost.
How Crypto Interest Accounts Work
Crypto interest accounts provide a way to earn passive income with your cryptocurrency holdings. When you deposit your bitcoin in an interest account, it is made available to crypto borrowers who repay it with interest. Interest rates will depend with the specific cryptocurrency you deposit and your choice of provider. Just like with traditional bank accounts, some interest accounts come with lock-up terms while others with flexible withdrawal policies.
The maximum amount we recommend to put in a crypto interest account would be 10% of your available funds. You should know that crypto interest accounts are risky. This year alone, many people have lost their life savings on platforms such as FTX, Voyager and Celsius Network.
Top Crypto Interest Accounts
There are many platforms that offer crypto interest accounts. However, it is critical to note that different platforms offer varying interest rates for different cryptocurrencies. For this reason, it is important to do your research to find the best platform that suits your needs. Other factors to consider include the safety of funds, coins on offer, interest rates, and minimum deposits. The following are some of the best crypto interest accounts:
Nuri, formerly Bitwala, used to offer crypto interest accounts. Unfortunately, it will soon stop to operate. Users can still withdraw all their bitcoin and money until 18.12.2022.
Coinbase Crypto Interest Account
Coinbase put its crypto interest accounts on hold in 2021 but you can still earn passive income through their staking platform. Coinbase supports six tokens for stacking (Ethereum, Cosmos, Algorand, Tezos, USDC, and DAI). Staking on Coinbase requires you to have a verified account with a confirmed Tax Identification Number (TIN). You will need to lock-up your crypto tokens for a certain period of time and Coinbase will pay you rewards in form of interest. Cosmos earns an APY of 5%, 4% APY on Ethereum, 4.64% APY on Tezos, 4% APY on Algorand, 2% APY on Dai, and 0.15% APY on USDC. Interest is paid out daily.
Cashaa Crypto Interest Account
Cashaa is a crypto-friendly bank that offers personal accounts that enable users to store, buy, sell, and earn interest on crypto holdings. The Cashaa personal wallet was designed for retail users enabling them generate best interest rates on fiat, crypto, and stablecoin deposits. Cashaa personal account comprises two modules; Flex Earnings up to 13% interest rate with no locking and Fixed Deposit Earnings up to 24% interest rate with locking periods of between 1 month to 12 months. Interest is paid daily to investors.
Is crypto interest taxable? The answer varies depending on the country. In the US, the Internal Revenue treats cryptocurrency the same as bond, stocks, and other similar assets. Therefore, some of your crypto earnings may be subject to taxation.
Crypto.com Crypto Interest Account
Crypto.com offers one of the best crypto interest accounts that support dozens of digital tokens including stablecoins, Bitcoin, Ethereum, Litecoin, Stellar, Bitcoin Cash, Cardano, Chainlink, EOS, and more. Crypto.com allows you to earn up to 14% APY on stablecoin deposits and up to 14.5% for non-stablecoins. However, this depends on the term of your deposit and whether you stake your CRO tokens or not. To get maximum benefit for staking, you need to stake at least 40, 000 CRO tokens and lock your funds for a period of 3 months. If you decide not to stake any CRO tokens, the yield is reduced to 6%. Crypto.com crypto interest accounts pay out interest weekly. If you want to benefit from a long-term compounding strategy, you will need to manually reinvest your tokens. You can access your crypto investments anytime you want by withdrawing from an ATM using its crypto debit card. Minimum deposits vary depending on the coin while the maximum deposit is $500,000 (USD equivalent).
Hodl Hodl Crypti Interest Account
Hodl Hodl is a bitcoin exchange that offers a peer-to-peer bitcoin-backed lending product, Lend at Hodl Hodl. With Lend at Hodl Hodl, you can borrow PAX, USDC, DAI, USDT, and other stablecoins using Bitcoin as collateral. The minimum loan amount is 50 USD equivalent and the loan period ranges from 1 day to 1 year.
Celsius Network Crypto Interest Account
On June 13, 2022, Celsius announced that it was pausing all withdrawals, Swap, and transfers between accounts due to extreme market conditions. It has also filed for bankruptcy in July 2022. This means Celsius crypto interest account is not available at the moment. Read the full statement here.
As of April 15, 2022, Celsius Network lets accredited investors in the United States to deposit and earn interest rates of up to 18.63% APY on select coins (Bitcoin, Matic, Ethereum, and Solana) and stablecoins (TUSD and USDC). Users outside of the United States will still be able to earn interest, but lower (17.78% APY). Interest is paid out weekly. Celsius also offers loans in cash or CEL (the native coin of Celsius). Celsius has no minimum balance or fees to earn on your crypto deposits. The only fee you pay on Celsius Network is the interest paid on loans by borrowers.
Binance Crypto Interest Account
Binance offers one of the best crypto interest accounts in terms of yields and supported coins. However, your yields will depend on your lock-up terms. Binance offers two crypto savings products. One product allows for withdrawals without time constraints with interests of up to 20% while the other product has lock-in periods and up to 25% interest per year. Crypto assets outside of the top-10 can earn you huge APYs. For example, Axie Infinity offers 104% (on a 90-day lock-up period but is reduced to 25% on a 7-day period. The account offers up to 5% APY on Bitcoin. The Binance crypto interest account is flexible allowing you to withdraw your BTC tokens at any time and you can also view the performance of your crypto interest account in real-time. Interest is paid out daily. You can also grow your crypto portfolio by stacking crypto.
Wirex X-Accounts are other top crypto savings accounts that allow you to earn up to 16% interest on your crypto savings. Interest is calculated daily and paid weekly. There are no account maintenance fees and no withdrawal fees.
Nebeus Crypto Interest Account
Nebeus is a crypto fintech that offers crypto renting services to crypto investors. Crypto renting works like crypto savings only that with crypto renting, you rent your crypto to Nebeus through a rental agreement and you earn interest annually. Your interest rate will be based on the prescribed period. Nebeus has two crypto renting programs; Juniper and Sequoia. The Juniper program allows investors to earn 6.45% interest per year with a deposit period of 3 to 36 months. The Sequoia program pays an interest of 8.25% per year if you rent the company a minimum of 0.35 BTC or 18 ETH for more than 3 months. Sequoia program’s deposit period is 6 to 36 months. Interest is paid out to your account monthly but you can withdraw your earnings every 24 hours. Both programs do not attract any fees.
YouHodler Crypto Interest Account
YouHodler crypto interest accounts support a wide range of cryptocurrencies (about 22 cryptocurrencies). Depending on your choice of cryptocurrency, you can deposit a minimum of $100 to earn interest. YouHodler crypto interest accounts can earn APYs between 3% and 12.7% depending on the crypto asset you deposit. Its interest payments are made every week. YouHodler crypto interest accounts are available in the UK, EU, Asia, and Eastern Europe but not available in the U.S.
Are Crypto Interest Accounts Safe?
Cryptocurrencies are generally risky investments. This means that even the crypto interest accounts used to hold these coins to earn interest are exposed to some degree of risk. It is for this reason that you must do proper research on the available accounts before you make a choice. Some of the core risks to consider include the following:
- Platform risk. When you deposit your funds into a crypto interest account, you trust the platform to ensure safety of the funds, pay your interest on time, and at the agreed amount. However, all this is not guaranteed.
- Market crash risk. Most crypto interest platforms require a minimum amount of collateral to facilitate loan requests. This collateral will not be sufficient to pay back the lender in the event that there is a major crypto market crash.
- Default risk. Just like all loan agreements, Crypto loans have the risk of default. To prevent this, many platforms have a safeguard in place- collateral. In the event that a borrower defaults on their loan agreement, the collateral is sold to pay the lender.
Your crypto is often not insured. You are giving away your crypto for others to invest with. Most often to institutional investors so they can leverage from that. But there is no guarantee to get back your crypto. The business can go bankrupt. Remember: not your keys, not your coins. It is advisable to keep on stacking your SATs as it is not risky.
Final Thoughts on the Best Crypto Interest Accounts
Crypto interest earnings offer more attractive yields compared to traditional bank accounts. However, it is crucial to consider all the risks associated with crypto investments.