Crypto

6 Best Crypto Interest Accounts in 2020

If you want to earn up to 12% in passive income on your idle crypto or stablecoin savings, you want to explore the concept of crypto lending. But what are the best crypto savings accounts? We reviewed the top choices for this year.

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With traditional brick-and-mortar banks offering dismally low-interest rates on savings accounts, it might just be the right time to explore different routes for activating your idle cash.

Though still controversial, more and more people are eyeing the benefits of a cryptocurrency interest account as a viable alternative for earning a passive income. The best crypto interest accounts offer up to 12% interest on stable coins and will let you earn 6% interest on more popular instruments like Bitcoin and Ethereum.

To help you find the best way to earn interest on your crypto, we separated the wheat from the chaff and selected the most competitive offerings for putting your digital assets to work.

We looked at the top crypto interest accounts for stablecoins, Bitcoin, Ethereum, altcoins, small-cap tokens, and fiat currencies, and selected the best platform from each category.

Without further delay, let’s take a look at this year’s 6 best savings accounts for earning interest on your crypto.

These Are the Best Crypto Interest Accounts

Our side-by-side comparison of the best crypto interest accounts:

CompanyStablecoinsBitcoinEthereumAdditional offer
BlockFi8.6%6%4.5%
Crypto.com12%6.5%5%18% (CRO)
Celsius Network7.25%4.13%3.82%5% (CEL)
CoinLoan10.5%6.6%5%10.5% (Euro)
YouHodler12%4.8%4.5%12% (Euro)
Binance12%3%6%15 (BUSD)
Rates as per 14-04-2020

BlockFi Interest Account: Most Trusted & Institutionally Backed

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BlockFi is a regulated New York-based financial service provider that offers two crypto banking products: crypto interest accounts to investors and crypto loans to borrowers.

Investors can open a crypto interest account with BlockFi and earn up to 8.6% on their digital currencies per year with compound interest.

Although these are not the best rates in the industry, we consider BlockFi the most trusted and compliant offering currently available. The firm generates interest for account holders by lending out their crypto to institutional and corporate borrowers. To ensure payments from clients, it only lends out crypto with overcollateralisation. Meaning, the pledged asset always exceeds the actual value of the loan.

Most interestingly, the Blockfi Interest Account does not require any minimum deposit, making it accessible to anyone with crypto assets.

BlockFi interest rates:

CurrencyAnnual Yield
BTC6%
ETH4.5%
USDC8.6%
PAX8.6%
Actual rates may vary

BlockFi is available to investors worldwide except for a few sanctioned countries and a number of U.S states.

Pros

  • Regulated and supervised company with multiple licences
  • High-interest crypto account with up to 8.6% APY
  • Unused reserves are stored securely with Gemini, a New York trust company regulated by NYDFS.
  • Crypto savings account with compound interest
  • No minimum deposit requirements to qualify for interest earnings.
  • No penalty for early withdrawal
  • One Zero-fee withdrawal per month
  • No utility token required to access the platform.
  • Run by some of the most experienced experts in Crypto

Cons

  • Only supports 6 currencies
  • Withdrawal fees are high – 0.0025 BTC, 0.0015 ETH and $0.25 for Stablecoins
  • No private keys
  • Slow account verification

Your assets deposited with BlockFi are securely stored with the licensed and trusted custodial – Gemini. Gemini is about the most secure exchange in Crypto. They make use of security protocols such as cold storage, two-factor authentication, and Amazon Web Services hosting.

BlockFi also generates interest from the funds held in interest account by lending them to borrowers. These loans are over-collateralized and are monitored round the clock for optimal loan performance.

Supported coins: BTC, ETH, LTC, USDC, PAX, GUSD

Minimum Deposit: No minimum deposit is required.

Instant withdrawals? BlockFi doesn’t offer instant withdrawals. Their withdrawal process is manual and can be cumbersome. The stated timeline for withdrawal is seven days, although it could take as little as 24 hours in some cases.

Crypto.com Earn: Best Overall for Earning Interest on Crypto

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Crypto.com ‘Earn’ is the interest account offering from the centralized crypto-asset lending platform, Crypto.com.

Depending on their stake with the platform and the locking period, investors can earn up to 6.5% on Bitcoin, 12% on stablecoins, and 18% p.a. on Crypto.com’s proprietary token, CRO.

There are three staking terms to choose from – flexible staking, one month, and three months. Accrued crypto interest is paid in the same currency as your Deposit and will be credited to your account every seven days.

Crypto.com interest rates:

CurrencyAnnual Yield
BTC4.5% / 6.5%
ETH4% / 5%
USDC10% / 12%
PAX10% / 12%
CRO (Crypto.com Coin)16% / 18%
Actual rates may vary

Crypto.com’s Earn is accessible globally and accepts over 15 cryptocurrencies. The interest account works much like a peer-to-peer lending system. Depositor’s assets are lent out to borrowers through Crypto.com’s credit product.

Your assets are maintained in the Crypto.com wallet, which are kept in cold storage custody through a Ledger Vault.

Pros

  • Offers the highest interest on crypto savings
  • Options of daily, monthly, or 90-day interest lock-up agreements. The interest rate increases with a higher agreement duration.
  • Supports over ten crypto assets and five stablecoins.
  • Visa Cards with up to 5% cashback on all spendings
  • Crypto.com Earn is available as a mobile app on both Android & IOS.
  • 24/7 customer support via live chat on both the Crypto.com website and mobile applications.

Cons

  • Company is not licensed
  • Unclear who holds deposits and who your crypto is lent to
  • Interest does not compound

Supported coins: DAI, PAX, TUSD, USDC, USDT, BTC, ETH, LTC, XRP, BNB, MKR, LINK, BAT, MCO, CRO, PAXG, EOS

Minimum Deposit: Varies but around $20 in crypto

Instant withdrawals? ‘Flexible’ term allows instant withdrawals.

Celsius Network: Top Crypto Savings Account With a Great Reputation

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Celsius Network is a peer-to-peer crypto lending platform founded in 2017 by serial entrepreneur Alex Mashinsky (one of the inventors of VOIP).

Claiming $200m worth of investments and 40,000 active wallets, it offers a great mobile-based solution for earning interest on your crypto. Moreover, Celsius partners with a number of high-trust institutions and security firms, which increases the confidence in the company.

Celsius Network sports some of the best crypto interest rates and accept a range of popular cryptocurrencies and stablecoins, including Bitcoin, Ethereum, USDC, PAX, and several others.

Moreover, it pays out interest on a weekly basis, with the option to earn more when getting paid in Celsius’ native token CEL.

Celsius Network interest rates:

CurrencyAnnual Yield
BTC4.1%
ETH3.84%
USDC7.25%
PAX7.25%
CEL Token (own coin)5.10%
Actual rates may vary and are adjusted on a weekly basis

Celsius Network is secured with multi-factor authentication, private key double vaults, encryption, and third-party solutions. Their assets are distributed amongst cold wallets and exchanges for additional security.

Pros

  • Supports a wide range of cryptocurrencies, including BTC, ETH, USDC, PAX
  • Instant interest once deposited
  • Compound interest
  • Instant withdrawals
  • Audited financials
  • Uses FireTrust and Prime Trust for transfer and custody of client assets
  • No fees for deposits, withdrawal, and no early termination fees, and no initiation fees.
  • No minimum deposit.
  • No lock-ups. You can access your funds at any time.
  • Weekly payouts of earned interest

Cons 

  • Not regulated
  • Only available as mobile app
  • Celsius ICO token CEL is not available to U.S customers.

Supported coins: BTC, ETH, LTC, XRP, OMG, BCH, ZRX, BTG, ZEC, XLM, DASH, TUSD, GUSD, DAI, PAX, USDT, TGBP, TAUD, TCAD, THKD, EOS, SGA

Minimum Deposit: No

Instant withdrawals? Yes. You can withdraw less than $20k within 24 hours. Anything more will take about two days.

Coinloan: Top Crypto Interest Account with European Licensing

Coinloan Interest Account

Coinloan is an Estonia-based fintech with an interest in peer-to-peer lending backed by cryptocurrency. They act like middle-men matching lenders and borrowers in a licensed and EU-authorised platform.

The company launched in 2016, under the regulation of the Estonian Financial Supervision Authority, which means it has the required European Financial Licences to operate.

The platform allows you to make passive income by investing fiat currency and stablecoins for a high yield return. As an investor, your deposits are used to create loan offers on the Coinloan platform.

CoinLoan interest rates:

CurrencyAnnual Yield
BTC6.6%
ETH5.10%
USDC10.5%
PAX10.5%
EUR (fiat)10.5%
Actual rates may vary

Interest for crypto is accrued daily on your deposit and credited directly to your wallet on the first day of each month. The rates for Coinloan interest account vary but can go up to 12% per year.

As for security, CoinLoan stores cryptoassets in offline, cold, multi-signature wallets with the digital asset trust custodian BitGo with $100 million worth of insurance from Lloyd’s. Furthermore, all transactions are done in accordance with Cryptocurrency Security Standard (CCSS).

Pros 

  • Licensed and certified platform
  • High yield interest – up to 12% APY
  • Client funds are stored with BitGo and insured for $100 million from Lloyd’s.
  • Cryptoassets are stored in offline, cold, multi-signature wallets.
  • Overcollaterised loans ensure investors’ funds are paid on time and loan default minimized.
  • Straightforward set up and verification process 
  • Intuitive and easy-to-use dashboard  
  • Investors have the option of buying whole loans or investing in fractional loans

Cons 

  • Crypto can only be transferred to and not bought on the platform
  • Low volume of loans on offer
  • Owners and team members not disclosed
  • Investors can only earn interest when their loan offer is taken up 

Supported coins: BTC, ETH, TUSD, LTC, USDC, PAX, XMR, BCH, USDT, BUSD

Supported fiat: EUR

Minimum Deposit: $100 worth of crypto

Instant withdrawals? No

YouHODLER: Aspiring Multi-Asset Crypto Savings Account

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YouHodler is a new cryptocurrency fintech registered in Cyprus and Switzerland that provides deposit and lending services similar to those of traditional banks. You can earn up to 12% on your digital assets or borrow money by putting up your crypto assets as collateral.

YouHodler’s crypto savings account pays interest on BTC, ETH, USDT, USDC, TUSD, and PAX deposits, as well as for BNB, PAXG, XRP, LINK, and XLM.

You can also convert other cryptocurrencies or fiat currency to these supported currencies. YouHodler pays interest every month, and the monthly interest periods start counting once you deposit funds into your savings accounts.

Another innovative product from YouHodler is Multi HODL, a speculative betting product that uses leverage to increase potential gains but also one that comes with a high degree of risk.

YouHODLR interest rates:

CurrencyAnnual Yield
BTC4.8%
ETH4.5%
USDC12%
PAX12%
Fiat (EUR, USD, GBP)12%

YouHodler has a self-declared fund of $1 million to cover the potential losses of users’ money. This may not be adequate given the volume of user funds with them. It is also unclear if the company has been audited by an external accounting firm to show proof of funds.

For the moment, YouHodler has no partnerships with crypto insurance providers. However, it uses industry-standard security practices when it comes to safekeeping client funds from hackers by using both cold storage and hot wallets.

YouHodler is also a member of the Blockchain Association, which is an independent body that ensures all users get a quick and fair dispute resolution.

Pros

  • High-interest crypto savings account with up to 12% for stablecoins
  • Funds protected with security fund of $1M
  • Zero withdrawal fees
  • No lockups

Cons

  • New and relatively unknown company
  • Small self-established insurance fund
  • Not available in the USA

Supported coins: BTC, ETH, XRP, XLM, LINK, BNB, PAXG, PAX, USDT, USDC, TUSD

Supported fiat: USD, EUR, GBP, CHF

Minimum Deposit: 0.1 BTC

Instant withdrawals? No

Binance Savings: Flexible & Fixed Crypto Lending Product

Binance savings account

Binance Lending is another term for the crypto savings account product from Binance – the world’s leading crypto exchange.

Binance Lending offers you the opportunity to earn interest on your digital assets by lending them out to margin traders. The margin traders, in turn, pay interest for borrowing your funds.

Binance Lending comes in two variants – Fixed Deposits and Flexible Deposits. Fixed Deposit means you lock your deposited funds for a predetermined period and higher interest. Flexible Deposits, on the other hand, lets you withdraw your funds at any time, and the interest rate can change with time.

Binance interest rates:

CurrencyAnnual Yield
BTC3%
ETH6%
USDC7%
USDT12%
Fiat (EUR, USD, GBP)n/a

Binance Lending distributes interest daily on a first-come, first-serve basis for flexible deposits while interest for the Fixed Deposits is only paid on the redemption date.

Binance Lending supports the major currencies, including BTC, USDT, ETC, and many more. They are always evaluating and adding new cryptocurrencies.

Pros

  • Binance is the world’s leading cryptocurrency exchange
  • Industry-leading security protocols
  • High interest savings account – up to 15%
  • Supportsdebit and credit card payments for cryptocurrencies
  • No transaction fees
  • User-friendly interface

Cons

  • Limited supply of loans to invest in
  • Platform is not licensed or authorised
  • Unclear how deposits are protected
  • Slow customer support

Supported currencies: BTC, ETH, XRP, LTC, EOS, LINK, BNB, USDT, TUSD, USDC, BUSD.

Minimum Deposit: Varies

Instant withdrawals? Yes

What Is a Crypto Interest Account?

How does crypto lending work?

A crypto interest account or crypto savings account operates much the same way as the savings account you have in your local bank. However, instead of depositing cash to earn interest on your Dollars or Euros, you deposit cryptoassets and earn interest in return – although some platforms do offer interest on fiat currencies.

When the first Crypto interest account – Bitcoin (BTC) savings account was introduced some years ago, it was met with a healthy dose of scepticism. This was because the initial sponsors were small startups without sound financial footing or backing.

Fast-forward to the present, crypto interest accounts have become popular choice with the community, with several large-scale reputable – and some regulated – blockchain companies providing the service.

These blockchain companies make money by lending your coins to borrowers at a higher rate than they pay you as interest – just the same way banks operate.

How Does Crypto Lending Work?

Drawn by the appeal of the blockchain technology, most aspects of traditional banking are finding it’s way into the crypto space. Lending is one such service that is widely being exploited by cryptocurrency players. Crypto lending is the practice of lending digital assets through lending platforms or crypto exchanges for interest.

Interest rates on traditional savings products are generally low, and therefore, cryptocurrency assets appear very attractive, with some platforms offering interests rate up to 12% on popular stablecoins and up to 18% on more volatile, exotic small-cap tokens and altcoins.

With so many players in the market, it may help to compare their rates side-by-side before deciding on where to put your money. Although a high interest should not be the only consideration for choosing a crypto saving account.

Lending your crypto for interest

You lend crypto for interest thorough cryptocurrency lending platforms or an exchange. The platform connects you to borrowers, private individuals or institutional trading firms, who back up their loans with tangible security like cryptocurrency or real money. You’ll get your cryptocurrencies back with interest once the borrower repays the loan.

How to choose a crypto interest account

With interest yield on crypto interest account outstripping those of traditional banking interest accounts which they are modeled after, it’s no surprise that investors are flocking to them. While it pays to shop around before deciding on the crypto interest account to invest with, the sheer number of crypto interest accounts offered by blockchain companies makes it a daunting task.

Here are some essential factors to consider when choosing the best way to earn interest on Crypto:

Insurance

Unlike traditional banking, deposits in crypto interest accounts are not insured by the FDIC. Customers of conventional banks get a part of their funds back if, for any reason, the bank fails. So what happens to depositors of Crypto interest accounts?

Does it mean that all is lost once the crypto company goes under?

Can investors keep their digital assets in crypto savings accounts and sleep with both eyes shut?

Some crypto companies are gradually turning to traditional insurance companies to secure their assets against thieves and hackers. Although, the volatile nature of cryptocurrencies has hampered the insurance coverage and underwriting of crypto assets.

Some of the best Crypto companies that offer some sort of insurance for assets in their interest accounts include BlockFi and Celsius Network.

Keep this in mind when searching for the right interest account to invest in. Keeping your funds in an insured interest account ensure you earn interest without jeopardizing your entire investment. In the case of a black swan event, you’ll be compensated in line with the extant terms and conditions of the coverage.

Security Protocols

Research in detail the security protocols of the crypto interest account provider you intend to invest your funds. This is very important as it could mean the difference between falling victim to hackers and thieves and earning some passive income safely.

Some crypto interest account providers like BlockFi stores your deposited digital assets with a custodian. This means your investigation should further extend to the custodian and their security protocols.

For additional security, these crypto companies often make use of a combination of security protocols. The most common ones you should be on the lookout for include:

Cold Storage

Cold storage refers to storing digital assets in servers in an offline environment, cut off from the internet. This measure is a necessary security protocol that stops theft by hackers. Additional security can be obtained by combining cold storage with Mutisignature to create Multisig cold storage. Multisgnature is the process of using more than one key to authorize a bitcoin transaction. This eliminates the risk of a single line of failure and makes it tough to compromise the wallet.

2-factor authentication

This is a must if you have any digital assets anywhere. 2-factor authentication is simply, a second layer of security in the form of a unique code generated on a dedicated electronic device, or an app on your phone. You use the generated code to log in to your accounts, together with your user name and password. So, for any account you have set -up on 2-factor authentication, you must input both the 2FA unique code for that particular account and the associated username and password to get access.

What makes the 2FA formidable additional security is that each code is specific to an account, randomly generated and mostly only stored on the device you installed the 2FA app. Therefore to get into an account, a user has to use the code that the 2FA device generates currently. A hacker would have a hard time getting the latest version of your 2FA code from your device, your username, and your password all at once.

The Google Authentication 2FA is the most popular software-based authenticator, another is Microsoft’s.

Cloud Storage

Cryptocurrency interest account providers often use machine learning tools from Amazon Web Services and similar large-scale solutions to develop anti-fraud systems. This allows users to transact in a safe and secure environment. Amazon Web Services is a secure cloud services platform that offers database storage, computing power, and other functionalities designed to assist businesses.

Bug bounty reward program

To further tighten security, crypto companies incentivize hackers to detect and report vulnerabilities by offering them a reward. The bug bounty program allows the crypto company to identify and resolve security flaws before they are exploited by criminals and lead to loss of assets.

Many of these companies use the same level of security protocols as large financial institutions. All connections are typically encrypted and some even distribute assets amongst several cold wallets and exchanges for additional security.

Collateralisation

As an investor, your deposited digital assets are given out as loans to borrowers at an agreed interest rate. The borrowers secure their loans with crypto assets, which are usually far above the loan in value. This is known as overcollaterisation, and it’s in fact, the basis for crypto lending.

Overcollaretaisation ensures the loans are paid back on time and in full. Due to the volatility of cryptocurrencies, the collateral is monitored, and borrowers are advised to repay part of the loan or increase the collateral if the value drops to a predetermined level.

Transparency

The authenticity of a crypto company where you intend to invest your assets is defined by how transparent they are with users.

Look out for companies that maintain communication with their users. At the point of sign up, you should know about all fees, charges and any other conditions. A reliable crypto company should have active social media accounts and continuously provide updates to its community of users.

Track record

Thororoughly research the track record of the interest accounts provider you wish to invest in. Has there been consistent growth with time? Has there been any security breach?

With the long history of hacks in the crypto space, and the billions of dollars’ worth of assets stolen so far, you must consider the interest account provider’s security records.

Also, check out for consistent performance. Has their interest rates been relatively stable? 

Generally, there’s not been any major issues with the Crypto interest account providers profiled here.

Regulation & Licenses

Check if the crypto interest account provider has the appropriate licenses to operate in their area of coverage. Dealing with an unregulated company places you at considerable risk since no legal recourse would be available in the event of malpractice or loss. 

How DeFi Loans Work

Through the ascendancy of DeFi or Decentralized Finance, the cryptocurrency sector is witnessing a breath of fresh air. DeFi is the concept of using blockchain technology to provide financial services that had previously been the sole preserve of traditional institutions.

The Decentralized Finance (DeFi) project seeks to promote financial inclusion by providing an open alternative to all the available financial services that anyone with an internet connection and an internet-enabled device can access from anywhere in the world. DeFi supported financial products include savings, trading, loans, and insurance.

DeFi loans are powered by apps, which are basically smart contracts on the Ethereum blockchain that can execute automatically when certain conditions are met. When you place your crypto into the DeFi smart contract, it lends your crypto to interest-paying borrowers.

The contract agreement fluidly regulates the interest rate based on the demand and supply for loans.

DeFi loans are secured by the borrower with cryptocurrency. The collateral cover is usually high, in some cases up to 200%. For instance, if a borrower wants to take $1,000, they may have to lock up at least $2,000 worth of Crypto in the blockchain as security.

In case of default, or if the collateral value drops below a certain level, the smart contract sells the security to recover the debt and repay the lender.

Is Crypto Lending Safe?

Crypto lending platforms apps are relatively new and mostly unregulated. People who resort to borrowing from crypto lending platforms do so because they have been rejected by traditional lenders due to poor credit scores.

That indicates a high risk of default, although the lending is usually over-collateralised. But remember that Crypto can be remarkably volatile.

You should also consider the security risk that arises when you move your crypto assets from the security of your hardware wallet to the lending platforms custodians. Always check if they have insurance in place and to which extent you can be compensated for any loss in the event the account is hacked.

Your Deposit is not insured in some cases, and returns are not guaranteed. So, you should only invest money that you can afford to lose.

Conclusion – The Best Crypto Savings Accounts

Best crypto lending platforms

Cryptocurrencies are fast becoming mainstream, and an increasing number of decentralized finance (DeFi) companies now offer crypto interest accounts that pay dividends. These companies provide a great investment opportunity for crypto owners looking for ways to generate passive income.

This income is achieved through high-interest loan offers to crypto borrowers. The crypto space abounds with traders looking for Crypto to borrow to overcome capital inefficiencies, amongst other uses. Therefore, the interest rate in the crypto space is considerably higher than that of fiat, with some providers offering rates as high as 15% APY.

With such high-yield, it’s no surprise that crypto owners are increasingly demanding for reliable Crypto interest accounts to put their money to work for them. However, before you invest your hard-earned savings in any crypto interest account, there are many factors to consider. These include interest rate, security protocols, insurance, platform reliability, and others.

The six crypto savings accounts listed in this article are some of the best currently in the crypto space. Some of these allow you to invest crypto and earn interest directly, or invest fiat and earn interest in crypto. By putting your funds in the right interest account and platform, you can hopefully see your digital assets multiply over time.

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