See More

Bitcoin Interest: 9 Platforms That Pay Interest on BTC

9 mins
Fact Checked
by Maria Petrova
Join our Trading Community on Telegram

In a central banking system, as it currently exists across the world, commercial banks are subservient to the nation’s central banks, setting their interest rates according to central banks’ policies. In Europe, the European Central Bank (ECB) has long gone into a negative interest rate zone. This resulted in hundreds of commercial banks charging people for having deposits.

In the United States, although financial affairs have not come to that point, an interest rate of 0.25% is not much to be excited about either. Outside of stock market dividends, the only accessible alternative for most people is to embrace cryptocurrencies. While they may be volatile, the upside of cryptos is that they offer a path to passive income that overshadows traditional savings accounts’ gains. One popular option includes Bitcoin interests.

The earning potential of BTC

American interest rate FED – long-term graph: Global-rates

In a traditional savings account, you get with your local bank, the bank would give you a small APY (annual percentage yield) for loaning out your money to third parties.

However, in order to prevent the economy from “overheating” and stimulate economic growth, central banks have been keeping the interest rates as low as possible. After all, because interest rates are low, borrowing encourages investing.

In the crypto space, the same principle applies, but without any central body setting the policies. Therefore, your cryptocurrency deposits generate a much higher interest rate as they are loaned out to third-party borrowers. In contrast, a traditional savings account can generate between 0.1%–0.6% annual interest yield (APY). This is several orders of magnitude less than cryptocurrency savings accounts that can go up to 10% APY or even higher.

Methods for generating Bitcoin returns

Overall, you can generate income from Bitcoin and other cryptos using the following methods:

  • Trading: The simplest method consists of buying the dip. You buy Bitcoin and then sell it at a higher price than when you bought it. Such trades can be completed on a micro level — hourly or daily — or on a macro level years after you have purchased BTC.
  • Arbitrage: Similar to BTC trading, but between different marketplaces. For example, South Korea is notorious for having a much higher BTC price than the rest of the world. This phenomenon is called the kimchi premium. Accordingly, if one manages to go through the regulatory hurdles and enter the South Korean crypto market, one can buy BTC cheaply in the Western market and sell it in South Korea for a hefty profit.
  • Lending: A much more elegant option for crypto gains. Instead of actively trading, you simply lock in your Bitcoin deposits so others can borrow from this crypto pool. Many crypto exchanges offer this passive income, with APY depending on the time period for locking your funds.
  • Savings account: Much like traditional savings accounts, it is the passive income method that requires the least engagement. Instead of a bank that yields an interest rate on your deposit, a crypto savings account relies on either a DeFi protocol or a centralized crypto exchange. The only difference between a regular crypto wallet and a crypto savings account is that the latter allows you to accrue interest over time.

Risks of earning Bitcoin interest

This guide will focus on the last two methods to earn interest from cryptocurrencies. However, keep in mind that almost all crypto savings accounts are not FDIC-insured. In the banking system, your cash deposits are automatically ensured by registered banks for up to $250,000.

You have to take responsibility by either properly selecting the right platform or acquiring insurance via Nexus Mutual or a similar smart contract-based service in the crypto space. In order for your funds to be accessible to others, which gives you your interest rate, the platform holds your savings account’s private keys. Therefore, it is paramount that they offer some security for your funds. After all, if they go under — either from cyber theft or bankruptcy — your funds will follow suit.

For this reason, make sure the platform you are entrusting your crypto assets with has a good reputation.

More importantly, if they had previously been hacked, they would have out proper compensation. Under these criteria, here are the top services that provide crypto savings accounts with Bitcoin interest or high yields.

Top 9 platforms for your crypto savings accounts

Key features
Debit card, Reservechain and Reserveledger, cryptocurrencies, API access, precious metals, fiat currencies
Platforms
iOS, Android, and web
Interest rate
0.25%-2.5%
Key features
Supports WBTC and L-BTC (Liquid sidechain) for its borrowing and lending markets.
Platforms
iOS, Android, and web
Interest rate
Most loans on the platform average between 1%-12%.
Key features
20 cryptocurrencies on offer as collateral for loans, with over 40 fiat currencies.
Platforms
iOS & Android
Interest rate
Up to 16% APY with daily payouts.
Key features
Passive strategies, manual options trading, self-custodial wallet, DLCs
Platforms
iOS
Interest rate
7%+ APY returns on your Bitcoin
Key features
Multi-chain support, MPC tech, user-friendly UI, staking, theft protection and web3 firewall
Platforms
iOs, Android
Interest rate
APY of 4% for bitcoin interest, up to 8% on stablecoins
Key features
Trading platform, crypto loans, BSC, locked staking, savings accounts
Platforms
iOs, Android, browser
Interest rate
Up to 30% APY
Key features
Crypto swaps, daily compounding passive income, instant fiat deposits
Platforms
iOs, Android
Interest rate
Up to 7% APY, when you lock up bitcoin for 365 days.
Key features
Decentralized lending and borrowing, built on RSK, margin trading
Platforms
iOs, Android
Interest rate
0.15%, 10% fee on interest repayments

9. Smart.Fi

Key features
Open lending platform, small business loan funding
Platforms
iOs, Android
Interest rate
Up to 12% APY on your Bitcoin or Ethereum balances, with monthly compounding.

Financial independence: The rise of self-sovereignty

If you have any amount of crypto assets, you don’t have to resort to begging Elon Musk on social media in the hopes of your assets gaining value. Instead, approach your investment’s long-term, just like your parents and grandparents.

It is clear that banking saving accounts have become not only useless but may even drain your funds. Deflationary cryptocurrencies like bitcoin provide a perfect remedy for such central bank experiments. Fortunately, there are not that many platforms to choose from for high-yield interest rates. The longer the platform has been publicly exposed, and the higher user count it has, the likelier it is that your funds will be safe, even if not FDIC-insured.

Crypto.com, Binance, and BlockFi provide the widest regional coverage, consistently high APYs, and negligible transfer fees. Others have their own strengths, with Gemini being the only one with FDIC coverage. Whichever platform you end up choosing, this passive income method represents the safest method to earn crypto gains.

Frequently asked questions

How can I earn interest on my Bitcoin?

Is earning interest on Bitcoin safe?

How much interest can I earn on my Bitcoin?

Top crypto projects in the US | July 2024
Harambe AI Harambe AI Explore
Uphold Uphold Explore
Coinbase Coinbase Explore
Chain GPT Chain GPT Explore
Top crypto projects in the US | July 2024
Harambe AI Harambe AI Explore
Uphold Uphold Explore
Coinbase Coinbase Explore
Chain GPT Chain GPT Explore
Top crypto projects in the US | July 2024

Trusted

Disclaimer

In line with the Trust Project guidelines, the educational content on this website is offered in good faith and for general information purposes only. BeInCrypto prioritizes providing high-quality information, taking the time to research and create informative content for readers. While partners may reward the company with commissions for placements in articles, these commissions do not influence the unbiased, honest, and helpful content creation process. Any action taken by the reader based on this information is strictly at their own risk. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.

Rahul-Nambiampurath.jpg
Rahul Nambiampurath
Rahul Nambiampurath's cryptocurrency journey first began in 2014 when he stumbled upon Satoshi's Bitcoin whitepaper. With a bachelor's degree in Commerce and an MBA in Finance from Sikkim Manipal University, he was among the few that first recognized the sheer untapped potential of decentralized technologies. Since then, he has helped DeFi platforms like Balancer and Sidus Heroes — a web3 metaverse — as well as CEXs like Bitso (Mexico's biggest) and Overbit to reach new heights with his...
READ FULL BIO
Sponsored
Sponsored