Looking for ways to earn interest on crypto assets without losing sleep isn’t a bad idea. After all, a few things in life can make a farmer smile more than sitting back to watch his crops grow and yield food seamlessly.
Although there are several legitimate ways to make money with cryptocurrency, many investors are looking for opportunities to invest their idle assets without doing much. Who doesn’t want to sit back, relax, and watch their money grow as if on trees?
In this article, we provide a shortlist of the best platforms to earn interest on crypto. But first, why are so many investors searching for ways to earn passive income on their cryptocurrency assets?
Why Is It a Good Idea to Earn Interest on Crypto?
It is no longer news that interest rates are steadily declining in the last decades, particularly due to constantly changing government policies. The interest rate in most countries now sits close to zero percent. Many believe that this decline is the primary reason why yield seekers are turning to the cryptocurrency market.
As a result, the prospect of earning interest in cryptocurrency has increasingly gained popularity among new-age investors. However, the most popular crypto assets for investors looking to earn passive income are highly liquid assets with real demand.
Most Used Assets to Earn Crypto Interest
Best Platforms to Earn Interest on Crypto
This article provides exhaustive information about the nine best platforms where you can earn interest on your crypto effortlessly. We compiled this list based on the following features that investors usually look out for, namely:
- Interest Rate
- Customer Support
BlockFi launched in March 2019 but has rapidly grown into one of the most used platforms to earn interest on crypto assets. The sudden rise to fame is apparent because of the lending company’s illustrious list of venture capital backers, including Winklevoss Capital, Morgan Creek, and Galaxy Digital.
BlockFi provides a less complicated avenue that allows investors to earn interest on Bitcoin and other cryptocurrencies, making the process as simple as depositing assets on what they term the BlockFi Interest Account (BIA).
BlockFi is based in the United States and is fully regulated under local laws.
- The platform is open to anyone that holds crypto irrespective of their investment status (accredited or unaccredited investors).
- BlockFi lets users withdraw their funds at any time, even though the withdrawal process takes approximately one day, barring any issues.
- The platform offers up to a 4.5% interest rate on ETH and a 6% interest rate on bitcoin (These rates vary based on market demand for these assets.)
- BlockFi uses a popular regulated crypto custodian, Gemini Custody. Thus, users can trust that their funds are secure at all times against hackers.
- BlockFi is liquidity-friendly. Users can borrow up to 50% of the amount they deposit on the platform with an attractive 4.5% interest rate on the borrowed funds (the minimum deposit to unlock loans is $10,000).
- BlockFi offers compound interest on deposited assets. Let’s assume that you made an initial deposit of $1,000 worth of BTC and earn $5 interest on that initial deposit for the first month. If he did not withdraw the paid interest, the next interest he will earn for the following month would include the $5 he earned earlier. In other words, the 6% APY will now apply to ($1,005) and so on.
- Like most crypto startups, BlockFi is not insured by the U.S. Federal Deposit Insurance Corporation (FDIC) and, therefore, cannot enjoy the same public confidence as traditional financial institutions.
- BlockFi only supports a few cryptocurrencies at the time of writing, including BTC, ETH, LTC, PAX, GUSD, USDC, and USDt (for non-US customers).
- BlockFi interest rates are regressive. For investors who make a deposit of less than 5 BTC, the interest rate reduces by 3.2%.
- Although interest accrues daily, users must wait for the first working day of each to receive payouts.
2. Celsius Network
Celsius Network is another platform that lets you earn interest on cryptocurrencies. Established in 2017, the London-based digital asset lending platform introduces financial freedom with over 30 cryptocurrencies.
To earn up to 12% annual interest on crypto via the Celsius platform, all you need to do is deposit any of the supported cryptocurrencies to your Celsius app wallet. The platform also has a native token known as “CEL,” which offers slightly higher interest than other assets.
- Celsius Network doesn’t charge any fee for withdrawals.
- You can withdraw at any time without concerns about penalties or extra fees.
- Celsius offers holders of its native token (CEL) an additional edge to earn interest on their crypto and, besides, gain access to other utilities on the platform. While holding CEL is not a requirement to deposit interest accruing funds, you can choose to get your interest paid in their native token.
- Celsius supports more cryptocurrencies (38 at the time of writing this article.)
- Users can only access their platform via mobile devices.
- While the platform does not require KYC for account creation, users must complete KYC requirements, even SSN, especially for U.S.-based users.
- Like other crypto lenders, interest while using Celsius Network isn’t consistent. Rates usually depend on market demand for locked-up assets.
Swiss-based company Nexo.io allows you to earn interest on crypto and borrow over 40 fiat currencies. The company claims to be licensed in Europe and thus compliant with laws that govern regulated financial institutions.
Established in 2017, Nexo supports users in 200 countries globally and also has a native token called NEXO. Users get discounted rates on their loans if they stake NEXO, and also enjoy higher interest rates by opting to receive interest payouts in the token.
- Nexo has a partnership with a licensed digital custodian, BitGo to store crypto that users deposit. This partnership is crucial to NEXO since BitGo has achieved the cryptocurrency security standard level III as proof that it has surpassed the strictest level of security.
- Nexo allows users to borrow up to 50% or more of the amount they deposit on the platform.
- Nexo supports a handful of cryptocurrencies, including Bitcoin, ETH, and stablecoins.
- The company has a responsive customer support team and an active community.
- Nexo supports fewer fiat currencies.
- Nexo offers little transparency into its operations and the company hasn’t been audited by any known auditors.
Holdnaut is a Singapore-based cryptocurrency lending platform launched in 2019 to help investors improve returns on their holdings. As with most lending platforms, the company generates paid interest from lending user funds to trusted regulated institutions. Users can deposit in any of the supported cryptocurrencies: Bitcoin, Ethereum, DAI, USDC, USDT, and WBTC. Interests are paid out weekly, while there are no lockup periods unless users choose to do so in order to earn higher interest.
- There is an in-built swap feature for converting coins.
- The platform has a highly responsive customer support desk.
- Interest is paid out weekly instead of monthly, as some platforms do.
- There are no lockup periods, so users can withdraw funds at any time.
- There is an added insurance protection for customer funds via a partnership with Nexus Mutual.
- There is an in-built calculator for estimating yield on deposited assets.
- Improved fixed-term loan offerings for large holders.
- The platform only supports six cryptocurrencies (at this time).
- There is also no support for depositing fiat (at this time.)
Around the crypto space, Blockchain.com is one of the oldest companies. The Luxembourg-based company was launched in 2011 and now has over 53 million wallets in its custody. Initially, users can safely buy, store, and trade cryptocurrencies. Recently, though, the exchange introduced an option for users to earn interest on bitcoin and a few other crypto-assets.
To earn interest on your bitcoin on Blockchain.com, you need to open an Interest Account on the website. Users earn around 4.5% to 6% per annum on their Bitcoin deposits, depending on the amount.
- Blockchain.com is a reputable company in the cryptocurrency space.
- The process is as simple as depositing assets to your Blockchain.com Interest Account.
- Blockchain.com provides an interest calculator so you know how much interest to expect over a given period.
- Pegging the annual interest between 4.5% to 6% allows Blockchain.com to offer consistent rates.
- Blockchain.com requires investors to reach the “Gold Level” of verification before they can run an interest-earning account.
- There is also a $300 benchmark before you can start earning interest on bitcoin.
- The Blockchain.com electronic wallet adds support for a limited number of cryptocurrencies, which includes BTC, BCH, ETH, Paxo Standard Stable Coin (PAX), and Stellar(XLM).
6. Binance Savings
Binance launched in 2017 and is currently one of the largest cryptocurrency exchanges in the world. To further improve liquidity across its platform, Binance allows clients to earn interest on crypto via its lending products. Users can earn interest on cryptocurrencies including Bitcoin (BTC), Binance USD (BUSD), Tether (USDT), and Ether (ETH) to mention just a few.
Binance lending products are categorized into two types which are:
- Fixed Deposit
- Flexible Deposit
Under this category, an investor is required to lock in or stake funds for a certain period of time to attract a determined amount of interest. This option is best for long-term investors; however, you cannot gain access to withdraw your funds until the subscription period expires.
This category is where investors earn interest on crypto while saving crypto. The service is flexible because you can choose to pull your funds at any time you wish. This type of savings will appeal to traders, especially; however, it attracts lower interest rates than the fixed deposit category.
- Binance is a reliable cryptocurrency exchange.
- The exchange presents a variety of savings and lending options for investors to choose from, depending on the individual’s choice of either a long-term lending basis or flexible deposit fit for traders.
- Binance lending products support more cryptocurrencies than other platforms reviewed so far.
- Users must complete Binance’s KYC process before they can use the lending service.
- Users risk an impermanent loss when they save assets that offer higher yields, but often drop in market price.