Crypto Interest Rates

Crypto interest accounts in DeFi and CeFi enable their users to earn interest on their crypto assets. On the surface, they work similarly to traditional savings accounts in centralized banks. However, the rewards that they help to accrue are typically much higher.

In addition, the account opening process on such platforms is much simpler. As blockchain defies geographical limitations, the possibility to earn crypto interest rates has become available to users all across the globe.

In this article, we are going to give some basic information on different ways to obtain interest in crypto such as staking, lending, and savings accounts. Also, we will review the best crypto interest rates that one may find on the market to help you navigate the landscape.

Top Crypto Interest Platforms

	Name	Score	Visit	Disclaimer
	1Coinbase	8.4	Visitcoinbase.com
	2Kraken	7.6	Visitkraken.com
	3Uphold	8.4	Visituphold.com
	4Nexo	7.0	Visitnexo.com
	5Binance	9.1	Visitbinance.com

Crypto Interest Rates Comparison

Best Interest Rates For Crypto Staking

* for bonded staking

** for flexible staking

Best Interest Rates For Crypto Lending and Savings

How To Earn Interest On Crypto

Staking is, perhaps, the most well-known way of making passive income in crypto. However, it is not the only option available to investors. In this section, we are going to give a quick explanation of all the popular means of earning interest in crypto together with their pros and cons to help you find the best crypto interest rates.

Staking

Staking in crypto refers to the process of committing your assets to the blockchain in order to support the network and help it validate transactions. Originally, this method has been invented as an energy-efficient alternative to the proof-of-work consensus mechanism.

Indeed, networks running on the proof-of-stake consensus algorithm are not dependent on electricity consumption like Bitcoin and similar networks are. At the same time, they feature high security standards and enable network participants to earn interest via staking.

There are many centralized and decentralized platforms that help blockchains connect with end-users for this purpose. We are going to review in detail some of the best staking platforms below: Coinbase, Kraken, Uphold, Nexo, and others.

Lending

Crypto lending is another method of making passive income if you have some spare digital assets at hand.

In this scenario, users who have crypto, i.e. lenders, provide their assets to those who need them, i.e. borrowers, and earn a fee for that.

If you want to make passive income using this method, you can sign up to some of the best lending platforms, such as Nexo, Aave, KuCoin, OKX, and some others.

Savings Accounts

Finally, there is an option to make passive income by keeping your crypto in savings accounts.

On the surface, this method is very much similar to the one offered by traditional financial institutions. Bank customers deposit their funds into savings accounts while the banks pay them interest as they use their funds somewhere else. However, the APR is pretty low as it rarely exceeds 1-2%.

Crypto savings accounts work in the very same way as they are usually available on centralized crypto exchanges in the “Crypto earn” section. Users deposit their crypto while the exchange acts as an intermediary and invests these funds where it deems relevant. Thus, it may lend these coins to other users, stake them, or invest in other projects. Some of the best crypto savings accounts platforms include Binance, Nexo, Coinbase, and KuCoin.

Regardless of the business model and its profitability, the reward that the exchange shares with the users is fixed. Yet, it is still much more lucrative than the one that TradFi offers.

Best Places To Earn Interest On Crypto

1. Coinbase - Best Overall

As a prominent and well-established player in the cryptocurrency market, Coinbase offers a wide selection of cryptocurrencies for trading. Founded in 2012 in the USA, Coinbase plays a significant role in shaping the industry.

On the platform, users can easily link their bank accounts or credit cards to facilitate the conversion of fiat currency into various cryptocurrencies, and vice versa. As Coinbase supports 250+ different assets, it provides its users with a diverse range of options to choose from.

The staking process on Coinbase is quite straightforward. One may find this option on the platform's "Earn" tab. Additionally, Coinbase offers Cloud Staking which allows investors to have full control over their staked assets.

Overall, Coinbase provides a user-friendly experience and a robust platform for trading a wide variety of cryptocurrencies. Its reputation, longevity in the industry, and extensive selection of supported assets make it a popular choice for both novice and experienced traders.

2. Uphold - Best For Beginners

Founded in 2015, Uphold represents a versatile cryptocurrency platform offering users the convenience of buying, selling, and trading a wide range of assets in one place.

The platform provides a user-friendly interface and a diverse selection of financial products to fit even the most sophisticated requirements. The platform has a broad geographical coverage as it is accessible to customers in over 180 countries.

One of the notable advantages of the platform is its ability to facilitate transactions across different asset classes. Thus, it enables users to diversify their investment portfolios and explore opportunities within the cryptocurrency market. Uphold supports over 250 cryptocurrencies with 32 of them being available for staking which allows users to earn additional yield.

Uphold's primary focus is to deliver a user-friendly experience. Thus, it s a better fit for beginners. However, such an approach may not cater to the demands of advanced traders who seek sophisticated trading features and tools.

The platform had some security incidents in the past which resulted in the loss of customers’ funds. Thus, there was a broad discussion on Reddit in April 2022 with many affected users. There is no information on whether or the platform reimbursed the stolen funds to its users.

3. Kraken - Best For High Staking Yields

As a leading global crypto platform, Kraken offers its services in 190+ countries worldwide, boasting a substantial quarterly trading volume of over 200 billion USD. On the platform, users can buy and sell over 200 cryptocurrencies, utilize margin trading with 5x leverage, and trade more than 70 futures contracts.

Kraken's staking protocol is available in the Kraken Pro section, which caters to the needs of professional traders. Its high yields reach up to 24% per year for members of the system, with a bi-weekly distribution of rewards for many of the cryptocurrencies. However, the specific schedule depends on whether the staking feature is on-chain or bonded.

The list of assets that the platform supports includes Ethereum, Algorand, Tezos, and many more. Investors can easily track their rewards through a visualization graph developed by the in-house team. The graph showcases the growth of their accrued rewards over time, thereby encouraging the use of the staking feature.

4. Nexo - Best for Diversification and Funds’ Security

Nexo is another reputable cryptocurrency platform that is available in over 200 jurisdictions globally.

In the broad list of its products, there is the "Earn" feature that enables its users to make passive income by holding their crypto. As the platform supports over 35 cryptocurrencies for earning interest, it offers a diverse range of options for investors to choose from.

The facility offers flexible options, as well as fixed-term savings with periods ranging from one to six months, allowing investors to tailor the duration to their preferences. Daily payouts provide investors with regular income from their assets, enhancing the liquidity and usability of the platform.

In addition, Nexo has implemented top-tier insurance coverage to safeguard clients' funds in the event of hacks or loss of private keys. Such a service is designed to provide an additional layer of security. Moreover, Nexo's Platinum tier, which requires holding over 10% of the crypto portfolio in NEXO tokens, provides higher rewards, while receiving your rewards in NEXO provides an additional 2% interest.

5. Binance - Best for Diversity of Products

With a trading volume surpassing $6 billion per day, Binance has earned its place as one of the most notable platforms in the crypto market. Thus, the platform meets the varying needs of its users. Whether it's crypto staking, trading, or anything else, Binance has it covered.

With its Binance Earn feature, users can choose from hundreds of cryptocurrencies or tokens, including some popular options like XRP, ETH, LTC, and AAVE. Most of the tokens supported in Binance Simple Earn offer a range of flexible and fixed terms, ranging from one to four months.

In the list of earning products, Binance sets apart ETH 2.0 staking, aiming to support the new Ethereum environment. The service allows users to earn rewards for staking ETH on a daily basis.

While Binance excels in many areas, it's important to note that rewards for ETH 2.0 staking are paid in BETH as the tokenized representation of your staked ETH. Such an approach may become a stop factor for some users. Nevertheless, Binance remains a top choice for those seeking a reputable platform with a diverse set of crypto services.

Binance Earn products aren’t available on Binance.US, but US users can instead access on-chain staking for 17 cryptocurrencies.

6. Crypto.com - Best for Flexibility and Customized Earnings

Crypto.com is a popular cryptocurrency trading platform that caters to the needs of both newbies and experienced professionals.

The exchange offers a variety of cryptocurrency products, including the staking feature that supports over 20 different coins. In addition to well-known tokens such as ETH or USDC, users also have the opportunity to expand their portfolios with less popular assets such as ZIL or VET.

The notable aspect of Crypto.com's earning feature is its flexibility. Users have the freedom to choose the amount and the duration to earn interest on assets. The period may range from one to three months with rewards being distributed on a weekly basis.

Thus, users can customize their rewards with respect to their individual preferences. The rewards received depend on the amount of CRO tokens locked, with higher amounts typically resulting in greater yields.

Also, it's worth mentioning that Crypto.com features the Private Members status, which grants its owners additional perks and benefits. However, achieving it requires meeting high requirements, which may pose a challenge for some users.

7. Aave - Best for Advanced Users

As a popular Ethereum-based DeFi platform, Aave offers a range of financial services with a focus on lending and borrowing. Thus, it allows the members of the system to earn interest on their cryptocurrency assets.

Besides, the protocol employs staking of the AAVE token which helps to secure the protocol and enables users to earn passive income. With yields ranging from 6.14% to 12.22%, the platform distributes rewards in the form of additional AAVE tokens.

As Aave pays high attention to security, it is audited regularly. At the same time, its reports are insured by Nexus Mutual, a dedicated crypto insurance service. The system provides a fully decentralized staking setup, making it one of the top choices for those who want to eliminate counterparty risk for their holdings.

With Aave, the members of the ecosystem can borrow and lend more than 15 cryptos. As the platform processes billions of dollars, it presents a highly liquid market with a specific mechanism that works across numerous marketplaces.

Honorable Mentions

Ledger

As a hardware wallet provider, Ledger also offers a range of other crypto-related services. Ledger Staking enables users to stake a broad variety of coins right on a Ledger device and thus make passive income. Ledger Lending operates through Aave and Compound and supports USDT, DAI, and USDC only.

KuCoin

Kucoin is a reputable centralized exchange platform that operates across 180+ countries worldwide. In addition to numerous trading tools and the NFT market, it also offers two solutions for earning crypto. KuCoin Earn is a one-stop shop of financial products aiming to help users increase their wealth. Kucoin Lending, in turn, connects lenders and borrowers on a peer-to-peer basis assisting both parties in reaching their goals.

OKX

OKX is another well-known CEX with a huge variety of products. In particular, it offers a number of different services for making passive income in crypto such as Simple Earn, Shark Fin, and On-chain Earn. OKX Loan is a lending solution that enables borrowers to get up to 65% of their collateral’s value while paying no more than 1% APR.

Compound

Compound.Finance is a DeFi lending protocol that uses the idea of decentralized pools at its core. Users may deposit their crypto assets into the pools and earn the native cTokens to cash them out somewhere else. Borrowers may get a loan from these pools with the LTV ratio varying between 50% and 75%.

Cream

As a part of Yearn.Finance, C.R.E.A.M. Finance develops a permissionless and blockchain-agnostic protocol aiming to facilitate peer-to-peer financial transactions for its users. Its staking product allows depositing its native tokens CREAM or iceCREAM long-term (1-5 years) for the sake of passive income. Lending, in turn, supports a much broader number of different assets across different protocols.

YouHodler

As a Swiss-based fintech platform, Youhodler focuses specifically on crypto lending and exchange services. Its Crypto Loans service enables users to get cash right to their bank account with an LTV ratio ranging from 50% to 97%. Those who want to make passive income can check its Loyalty program for yields of 7% to 15% on 30 popular cryptocurrencies.

CoinLoan

Finally, there is also an Estonian-based crypto platform, CoinLoan, that focuses specifically on crypto loans and lending services. Its Earn product offers comparatively high returns to its users via Fixed and Flexible Accounts while the Loans product enables users to get crypto-backed loans with APR as low as 5.5%.

Is Crypto Interest Worth It?

Earning interest on your crypto is an interesting option for making passive income. Not only does crypto staking or lending allow you to put your idle assets to work, but it’s also a nice way to diversify your portfolio and contribute to your strategy of long-term holding.

In addition, the interest that various crypto services offer is usually much bigger in comparison to bank offers. At the same time, the entry thresholds are much lower as you don’t need to submit heaps of papers and prove your solvency. Finally, the accessibility of crypto interest services is much higher as it eliminates geographical boundaries.

However, the high level of risk in conjunction with the uncertain legal status of crypto may be a serious stop factor. Consider these aspects before you make any further steps in this area.

What Is Crypto Compound Interest?

Compound interest enables increasing crypto earnings as it allows you to earn additional interest on your interest. This means that you earn rewards on the principal amount of crypto that you initially deposit plus on the interest that you gain over time.

Let’s review a real-life example with specific numbers to illustrate how it works.

Obviously, compound interest offers higher rewards which makes it a much more lucrative option for crypto holders.

On some platforms, crypto interest compounds automatically. However, this is not always the case. It all depends on the service as well as on specific coins and the methods of earning interest. Therefore, you should always do your own research to find the best crypto interest rates.

Crypto Interest Taxes

In many regions, there is still no regulatory clarity on cryptocurrency status. Therefore, every country has its own rules and regulations when it comes to crypto taxation.

For example, the SEC doesn’t treat Bitcoin as a security. However, earning crypto interest is still considered a taxable event. Therefore, you have to pay taxes on your earnings just like on any other source of income.

In many EU countries, crypto is also subject to income tax. Since cryptocurrencies are mostly very volatile, authorities usually consider the fair market value of the coins at the time they were received to calculate the size of the tax.

If you then realize gains by selling your interest later on, you will also need to pay capital gains tax on the profit (value at the time of sale minus value when you received the interest).

Let’s review how to calculate taxes on crypto interest rates in a real-life example.

The procedure of tax calculation is usually much more difficult, though, especially for crypto interest services that feature daily or weekly payouts. The good news is that you don’t have to do that manually. There are dedicated tax software platforms such as CoinLedger and ZenLedger that can greatly simplify this process for you.

Is Crypto Interest Safe?

Earning crypto interest has a lot of positive aspects. However, there are also some drawbacks that investors should be aware of. Keep in mind the following risks if you decide to earn passive income in the form of interest rates on your crypto:

• Lack of insurance. Not all crypto services offer insurance for your deposits. Therefore, if your money is lost for some reason, you won’t be able to get a refund.

• Hacks. DeFi platforms, as well as CEXes, are prone to hacks and other types of smart contract exploitation which may also result in money losses.

• Limited access to your coins. If you use any of the fixed-term earning products, you won’t be able to access your funds during the whole period of staking.

• Price volatility. If the price of the assets you stake drops while your assets are locked, you may bear serious losses being unable to cash out your coins in time.

• Slashing penalties. If you stake digital assets as a validator and if you break any of the protocol rules, you will face the so-called slashing penalties and thus lose funds. People who have delegated coins to validators who get slashed could also lose them on some blockchains.

• Platform bankruptcy. Storing assets on centralized exchanges comes with counterparty risks. If the platform of your choice gets hacked or files for bankruptcy, you may lose your assets.

• Lack of regulation. There are still many regions that have no clear regulations around cryptocurrencies. If you reside in one of these countries, your crypto earnings may be considered illegal and you may face punishment.

Final Thoughts

Cryptocurrencies offer a nice alternative to make passive income on your idle assets. If you hold some coins that you don’t want to cash out for some reason, you can put them to work via staking, lending, or depositing them in savings accounts.

Each of these methods has both upsides and downsides. Thoroughly evaluate the level of your own expertise and your risk tolerance before you make any decisions. You may use our reviews on the platforms with the best crypto interest rates or do additional research on your own.

Regardless of the method you use, it would be a good option to diversify your investment portfolio and make passive income in crypto.

	Name	Score	Visit	Disclaimer
	1Coinbase	8.4	Visitcoinbase.com
	2Kraken	7.6	Visitkraken.com

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