It is possible to earn interest on Bitcoin, and one way to do it is via a savings account. How does it work and where can you find them?

One can try to earn interest on Bitcoin savings accounts just by holding the assets. Most platforms do provide you interest in Bitcoin and others are part of DeFi (Decentralized Finance). Various mechanisms that these platforms offer might not always be compatible with your risk management.

Bitcoin Interest

They basically lend the cryptocurrency then proceed to enable trading with it in order to generate a return that will be shared to the Bitcoin savings accounts. Thus, make sure you understand the risks because your investment's worth could go down should the transactions go south. If you're already aware of the downsides and are capable of managing the risks, here are some platforms to you earn interest on Bitcoin savings accounts.

 

1. BlockFi

So far, this is the best way to get interest from your Bitcoin savings accounts. BlockFi offers an annual interest of around 6.2% depending on the amount you lend. The company supports Bitcoin, Ethereum, GUSD (Gemini Dollar), Litecoin, USDC, and PAX.

You can also trade directly using BlockFi and gain profits. For instance, if you sell your Bitcoin for GUSD and buy it back when you know the price went down, you easily earn interest from both cryptocurrencies. Other than that, you will earn interest when it is paid out in the first week of every month.

However, the BlockFi locking period is within a month and you need to wait for 7 days to withdraw your money. Also, there is a withdrawal fee on the BlockFi Interest Account (BIA), so keep an eye for that too.

 

2. Celsius

If you wish to find a product that allows you to make a withdrawal without fees, then Celsius is the answer. They will give you some advantages that BlockFi is unable to provide: no locking period and minimum deposit, and the interest on your Bitcoin savings account will be paid weekly.

These are the cryptocurrencies that are supported by Celcius if you wish to get interests from their savings accounts. Please note that if you take an interest in the platform token (CEL), your interest rate will be higher.

  • Bitcoin – 4.60%
  • Ethereum – 3.90%
  • Litecoin – 4.50%
  • Ripple – 2.50%
  • OmiseGo – 4.25%
  • Bitcoin Cash – 3.75%

 

3. Binance Savings Account

The world's most-loved cryptocurrency exchange that is used by more than a million traders also provides a savings account. It is a product that you can try even if you are a newbie, easy to use with an interest rate that is flexible. Binance interest rate is only 1.6% and estimated annual yield. To be able to get that amount of interest, simply head to Binance website and click on finance then click the savings menu.

 

4. Compound Finance

Compound Finance, from which you can lend a few of the major cryptocurrencies and earn interest on them, is at the forefront of Decentralized Finance. When you lend cryptocurrencies through Compound, you are increasing the liquidity pool. You are not directly dealing with borrowers; instead, they borrow from the market.

Interest rates are determined algorithmically (in real-time) on the basis of supply and demand and the protocol lives on the Ethereum blockchain. There are several cryptocurrencies on Compound Finance, such as ETH, DAI, BAT, USDC, 0x (Zrx), Augur, and WBTC. However, if you are looking for stable trading, try DAI and USDC crypto. In the future, Compound Finance plans to add more cryptocurrencies to acquire more clients.

If you are concerned with your security when it comes to trading, it is best to use DeFi as it will allow you to use hardware wallets like Ledger Nano X, Ledger Nano S, Trezor, and Fortmatic. Furthermore, Compound Finance is a good option for traders who wish to have no locking period to withdraw the assets at any time. The interest is paid after ETH block confirmation every 15 seconds.

 

5. Nexo

Lastly, this is one of the best platforms to earn interest on Stablecoins with an interest rate of up to 8% that will be paid out daily. This will help you gain pretty high interest, especially if your crypto is supported by Nexo. Their supported currencies include USDT, TUSD, USDC, PAX, DAI, etc. Aside from that, this platform is easy to use and free of withdrawal fees and locking periods. Nexo is also backed by custodial insurance of $100 million by BitGo and Lloyd's of London, and the business is audited by Deloitte.

 

Those are some products that can help you earn interest on Bitcoin savings accounts. Again, make sure you know the risks when it comes to investing in the cryptocurrency market with this method. Pick one platform that offers you flexibility in all aspects; don't just look for the one offering the highest interest.