As inflation continues to wreak havoc on the global economy, finding new ways to protect your money from losing value is becoming increasingly important. Unfortunately, parking your idle cash in a traditional brick-and-mortar bank these days will only earn you abysmally low interest rates. While still controversial and not without risk, a cryptocurrency savings account is an alternative that more and more investors are turning to. Like a traditional savings account, a cryptocurrency savings account pays regular interest, but with the added potential for growth in the crypto market.
Not everyone likes the volatility that comes with bitcoin and ether, and for those, a stablecoin interest rate can be a great option. These coins offer greater stability than cryptocurrencies, while still offering attractive interest rates. The best stablecoin interest accounts can offer up to 12% APY, while the best crypto interest accounts can offer up to 6% APY on instruments such as bitcoin and ethereum.
Below, we’ll explore the best platforms and apps to earn interest on your crypto assets and stablecoins. Whether you’re interested in earning interest on bitcoin, ethereum, stablecoins or altcoins, we cover the best places to find the best crypto interest accounts and crypto lending rates.
These are the best crypto interest accounts
Here are the best crypto savings accounts and apps to earn interest on cryptocurrencies:
- Nexo: Best overall, best for beginners
- YouHodler: Best stablecoin interest account
- UpHold: Best for staking rewards
- Coinbase: Most trusted staking platform
- Ledger: Best for decentralized staking, best for self-custodial staking
With so many players in the market, you should compare crypto interest rates side-by-side before deciding on where to put your money. That said, high interests should not be the only consideration for choosing a crypto saving account. Make your own decision and pick a platform you find trustworthy.
1. Nexo: Best overall, best for beginners
Why we picked it
Having been around since 2018, Nexo is one of the oldest crypto interest platforms in the market. We picked Nexo as the top crypto savings account because of its $375 million insurance policy, its numbers of regulatory licenses, and its large selection of cryptocurrencies. Last but not least because it is one of the few big players that has survived the 2022 market crash with no impact on its users’ ability to withdraw their funds.
What you need to know
Nexo offers some of the highest compound crypto interest rates in the market. There is also the Nexo crypto card, which lets users earn cashback every time they spend. Annual interest rate on Bitcoin and Ethereum go as high as 4% and 5% respectively, and up to 12% on USD stablecoins. Users can also earn interest on stablecoins that mirror the Euro and GBP. As a boon to new users, new users can get a $25 BTC bonus when signing up and completing the advanced verification process when they deposit at least $100 in crypto.
A standout features of Nexo is its minimal lock up times and daily paid out interest. This allows users to quickly earn interest on their crypto holdings and the flexibility to withdraw any time they want. The platform is well-rounded, with support for 33 coins and tokens, including expected favorites like BTC, ETH, DOT, AVA, and XRP. Furthermore, a number of altcoins are available as well, including BNB, LINK, and ATOM, just to mention a few. It’s total catalogue of choices makes it one of the most versatile options for earning interest on crypto.
In terms of security and trust, the key advantage of using Nexo for earning crypto interest is its security, with military-grade 256-bit encryption, cold storage, two-factor authentication, IP whitelisting, and a cold-wallet storage system. The platform is also insured for up to insured for up to $375 million and is regulated by financial service providers in multiple regions, including the U.S. and Europe. Nexo is frequently criticised for its lack of transparency, but despite the negativity, Nexo has remained robust on and never limited user withdrawals or put in restrictions on its platform. For those looking for a reputable and versatile crypto savings account, Nexo is a solid choice.
Special offer: Earn up to 10% on BTC and ETH. Invite your friends to Nexo and get $10 in BTC.
2. YouHodler: Best stablecoin interest account
Why we picked it
We picked YouHodler as the best stablecoin interest platform because it offers some of the best rates on UDST and USCD while being compliant with local regulations. These high crypto interest rates, combined with the platform’s impressive list of supported large and small-cap coins, make YouHodler a strong contender for anyone looking to earn interest on their crypto assets.
What you need to know
YouHodler is a crypto loan and savings platform based in Cyprus and Switzerland and is compliant with European laws and regulations. It’s currently licensed in Estonia, Italy, and Switzerland to provide its crypto services. The platform is not available to U.S. users as well as to citizens in other restricted countries. YouHodler claims to be part of Ledger Vault’s $150M pooled insurance, which a 2020 Tweet by Ledger Enterprise confirms. Lastly, it seems YouHodler has maintained stable banking partnerships for its fiat channels, which is a positive indicator.
YouHodler offers a range of crypto-related services, including a high-yield crypto savings account, crypto-backed loans, an exchange, and additional yield-generating services such as Multi HODL, Dual Asset, and Turbocharge. We consider the latter three products high-risk, and they may not be suitable for everyone. Fortunately, users who just want to earn interest on their deposits are not obliged to use these products. Unlike many other crypto lending platforms, YouHodler representatives say the company does not have a desk that engages in crypto trading on various DeFi protocols. Instead, the platform generates revenue through its proprietary lending products.
YouHodler offers some of the highest crypto interest rates in the CeFi industry, with an APY of up to 8% on popular stablecoins like USDT and USDC and 3-4% on BTC and ETH. Last we checked, the platform offered an impressive 50-coin palette of crypto savings products, with the option to earn interest on both crypto and stablecoins. YouHodler’s crypto interest account is simple to use and requires no lockup periods, which makes it a flexible option for those looking for a convenient way to earn interest on their crypto. You can easily deposit your crypto or fiat (EUR, GBP, CHF, and USD are supported) and exchange it to earn interest on your coins. By and large, YouHodler’s reputation is excellent, its platforms are straightforward, and the rates are competitive.
Read More: Full review of YouHodler.
UpHold: Best for Staking Rewards
Uphold is a U.S. cryptocurrency exchange that offers a unique way to earn rewards through staking. The staking rewards vary by asset, with an estimated APY range from 1% for Algorand (ALGO) to 13% for Cosmos (ATOM). ETH staking is also supported. Aside from POS staking, Uphold is also a fully-fledged crypto exchange and platform that allows users to buy, sell, hold, and transfer a variety of assets, including cryptocurrencies, fiat currencies and commodities.
What you need to know
Users can stake different PoS-based coins to receive staking rewards. The platform provides some of the best interest rates on the market for decentralized staking, including Cosmos (ATOM) at 13%, Mina (MINA), Injective (INJ), Polkadot (DOT), and NEAR Protocol (NEAR), among many other coins. There is a 15% commission on any staking incentives that Uphold receives from the network or other staking partners, but this commission is taken into account when calculating the anticipated annual percentage yield (APY) that users will get.
Uphold offers a level of security to its users and their assets thanks to FinCEN registration, regulation, and compliance with KYC and AML standards. Depending on your place of residency, you will open an account through one of UpHold’s five operating countries. This enables them to abide by various regional rules and regulations.
Coinbase: Most trusted staking platform
Why we picked it
Coinbase is one of the largest cryptocurrency exchanges in the world and perhaps the best-known next to Binance. A little-known feature of Coinbase is its Earn Program is a great option for those looking to earn staking rewards on their digital assets. Although Coinbase generally provides lower staking rewards than its competitors, we selected Coinbase as the most trusted staking platform for earning interest due to its long history, security features, regulatory licenses, and publicly traded status.
What you need to know
The Earn feature at Coinbase allows users to earn interest on a number of different Proof of Stake (POS) coins, including Ethereum (ETH), Tezos (XTZ), Algorand (ALGO), and Cosmos (ATOM), just to name a few. Users can earn interest on their coins without having to go through the hassle of setting up and managing their own staking node. The Coinbase Earn program is only available to users in certain countries and regions, so be sure to check if it is available in your area before signing up.
Users can take part in the Earn program by staking the relevant coin to earn interest. The staked coin is pooled with other users’ funds and accrues interest on a monthly basis. Like other platforms, Coinbase levies a commission on the staking rewards before they are paid out to users. If you’re keeping your altcoins with Coinbase already, staking them for interest is worth considering.
Ledger – Best for decentralized staking and best for self-custody staking
Why we picked it
Ledger is the natural pick for the best decentralized staking platform because it allows users to retain self-custody while staking altcoins. Staking with Ledger does require more technical knowledge than going through an exchange, but for those who prefer to control their crypto, it’s a clear winner.
What you should know
Ledger is a trusted brand in the crypto space that is best known for its series of hardware wallets. Ledger allows users to earn staking rewards on several Proof-of-Stake (PoS) coins through its Ledger Live software. The main benefit of staking your crypto through Ledger Live is that you own the private keys giving access to your crypto. This means you have full control over your assets, unlike staking coins on an exchange like Binance or Kraken.
Staking with Ledger is different than staking through an exchange and, to tell the truth, slightly more complicated. You will have to connect to a wallet that supports the chain you want to stake in. This could be a web wallet, a mobile wallet, or a full node. For example, to stake ADA on the Cardano network, you would need to connect your Ledger’s ADA account to Yoroi or another Cardano chain wallet. From there, you need to select a validator to delegate your stake and confirm it with Ledger. Once you’ve staked your coins, you’ll start earning staking rewards. The rewards will be paid out regularly, depending on the blockchain protocol.
Some blockchain protocols require an unbounding period for unstaking and withdrawal, while others do not. Make sure you research the terms of each coin and staking pool before staking your crypto.
Frequently asked questions
What is a crypto interest account?
A crypto interest account or crypto savings account operates much the same way as a normal savings account. Instead of depositing cash to earn interest, you deposit crypto-assets and earn crypto interest in return.
Are crypto interest accounts safe?
Crypto interest accounts are not insured by any government, but the safest cryptocurrency savings platforms take extreme measures to protect your assets from misuse and hackers. Lenders like BlockFi have complex security systems to minimize counterparty risk and implement automated margin call systems for borrowers. But remember only to invest money that you can afford to lose.
Why are crypto interest rates so high?
Interest rates on cryptocurrencies can be as high as 13% because the crypto lending industry is still in its infancy and the demand for loans is growing exponentially. These blockchain companies make money by lending your coins to borrowers at a higher rate than they pay you as interest. Another reason for the high rates has to do with traditional financial institutions refusing to work with crypto-related businesses.
Is the crypto lending industry regulated?
The best crypto lending and borrowing platforms are licensed by multiple financial authorities as money transmitters (US) or as crypto-asset businesses (UK.)
Should I lend all my crypto for interest?
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 platform’s 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.
How does crypto lending work?
Crypto lending is the practice of lending digital assets through lending platforms or crypto exchanges for interest. 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.
Guide: How to choose a reliable crypto savings account
With interest yield on crypto interest account outstripping those of traditional banking interest accounts, it’s no surprise that investors are flocking to earn interest on their unused cryptocurrencies. While it pays to shop around before deciding on the crypto interest account to invest with, here are some essential factors to consider when choosing the best way to earn interest on crypto:
- Understand insurance: Can investors keep their digital assets in crypto savings accounts and sleep with both eyes shut? Unlike traditional banking, deposits in crypto interest accounts are not insured by the FDIC or any other government compensation scheme. Keep this in mind when searching for the right interest account to invest in. Keeping your funds in a thoroughly vetted crypto interest account is the best way to earn interest without jeopardizing your entire investment.
- 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.
- 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 an app on your phone. The Google Authentication 2FA is the most popular software-based authenticator, another is Microsoft’s.
- Bug bounty reward program: To further tighten security, the best crypto lending 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.
- 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.
- 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: Thoroughly 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.
- 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 crypto interest-bearing savings accounts work
A crypto savings account works much in the same way as a regular financial savings account. You deposit a certain amount of cryptocurrency, BTC, ETH, USDT, etc., into the account and earn interest.
The only difference is that you’re earning interest from your cryptocurrency rather than actual fiat money. However, this also means that you can access your funds quickly. However, there may be more risks involved in earning interest on crypto than earning interest from a bank, depending on the digital asset you provide.
Crypto interest rates and risks
The crypto interest you earn is likely to vary depending on the account. Different cryptocurrencies will offer different rates of return, so you’ll need to do your research before choosing a savings account that provides the highest returns for you.
While it may seem like a great idea to deposit large sums of cryptocurrency into an interest-bearing account, there are some risks involved in doing so. If someone hacks the website where your funds are kept, they could potentially steal all of them. If the lending platform goes out of business or becomes subject to a lawsuit, your funds may also be at risk.
Differences between a regular and crypto savings account
There are a few key differences between a regular financial savings account and one that pays interest in cryptocurrencies.
- Interest rates: An ordinary savings account typically won’t pay any serious interest these days. Still, some banks can offer interest rates of around 0.1-0.5%. If you’re earning an annual return of 1% per year, there aren’t many options left. On the other hand, a crypto savings account will pay much more, sometimes as high as 5-10%.
- Insurance: A regular savings account will be insured by the government or other financial body. If your bank goes down, you won’t lose access to the funds in your account. However, if a cryptocurrency savings platform is hacked or becomes bankrupt, there’s a chance you’ll never see those funds again. That said, many crypto lending platforms now offer insurance protection that can be bought for a monthly or yearly fee.
- Rehypothecation: Not many people are familiar with the term rehypothecation, but this is one of the ways banks and crypto banks make money from your deposit. Basically, rehypothecation means that the lender can use whatever is deposited with them as collateral for a loan they give to others. In other words, if you deposit $100 000 into an interest-bearing savings account and rehypothecation applies, there’s a chance that this money will be lent out to third parties. If this happens, your savings account may become less than $100 000 over time without you noticing.
Why trust this ranking
I’ve been writing about cryptocurrencies for years, and I’ve been using centralized and decentralized lending sites for around two years now, which has given me a profound insight into how they operate behind the scenes. I’ve analyzed numerous platforms to find the top ones, and I’ve seen enough collapses, rug pulls, black swans, and eccentric CEOs to evaluate which ones are the safest in the long run.
The lessons I’ve picked up over the years have shaped my opinion of these crypto interest accounts. Besides my own experience, this ranking draws on hundreds of hours of researching news outlets, Reddit, Twitter, company registries, and chatting with other users, comparing these sites for trust, transparency, licenses, complexity, number of available coins, and tokens, and several other factors. I keep notes on all major lending and borrowing platforms and try my best to keep this list updated at all times.
Summary: The best crypto savings accounts
Cryptocurrencies are fast becoming mainstream, and an increasing number of companies now offer crypto interest accounts that pay monthly or daily 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 a high yield, it’s no surprise that crypto owners are increasingly demanding 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 rates, 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.