Crypto interest accounts are essentially savings accounts for crypto assets that yield interest on their balances.

Let’s take a look at an example:

A user is looking to earn compound interest on their Bitcoin holdings. They open a Bitcoin interest account at Blockfi, deposit 1 Bitcoin on the 28th of February, and the following occurs:

Ending account balance after 1 calendar year: 1.062 Bitcoin

Crypto interest account benefits include:

• Compounding interest on account balances
• Minimal time investment & maintenance
• Low minimum deposits & account balance requirements
• High transparency with fees and charges
• Higher interest rates and returns compared to traditional banking interest accounts.

Compound interest is earned on the majority of crypto interest accounts, with few exceptions.

See the potential of compound interest with our crypto interest rate calculator.

Blockfer’s crypto Interest Account Rates provides our users a daily updated list of the best interest rates available for Bitcoin, Ethereum, stablecoins, and more.

The two most common ways to earn interest on cryptocurrency are margin funding and crypto interest accounts.

Blockfer’s crypto interest rate calculator works for a variety of Bitcoin, stablecoin, and other crypto asset compounding interest calculations.

Blockfer and a considerable amount of global customers believe so.

While there are risks involved, crypto interest account APR rates are well above other industry standards and to date, there have been no major issues with the reputable service providers.

• Long term focused holders and investors.
• Investors looking for an above average return on their Bitcoin or other crypto assets with low maintenance requirements.

There are several important factors to consider when choosing a crypto interest account provider:

• Country of residence
• Crypto assets supported
• Interest rates
• Compound interest

Blockfer’s compare crypto interest account section found above is an excellent starting point.

The majority of crypto interest account providers, particularly the decentralized providers, do not offer insurance on user balances.

It is very important that users exercise proper due diligence and understand the risk vs reward when using these products.

This being stated, users should be aware of the following:

• No reputable crypto interest account provider has suffered a major security breach to date.
• Reputable service providers such as Blockfi, Nexo, and Compound have very strong financial backing with established VC funds.
• Smart contract audits and internal wallet security tests are routinely performed by reputable service providers.

The table below outlines insurance offerings by crypto interest account providers:

There are risks involved with any financial product and crypto interest accounts are no different.

Users should be aware of the following risks:

• Service Provider Company Default - Startups and new companies carry an inherent risk of failure.
• Interest Rate Fluctuations - Service providers reserve the right to change interest rates. A crypto interest account that began paying a 6% APR can be reduced to 3% APR within weeks.
• Custodial Risk - Users are entrusting their crypto assets to be held by a third party. In the event of a security breach or acts of negligence, a user is relying on the service provider to act ethically.

1. Navigate to the Blockfer review of the chosen crypto interest account provider.
2. Each review has detailed step by step instructions on how to open a crypto interest account.

Crypto interest account providers go to great lengths to maximize account balance security.

Smart contract audits, high level encryption standards, and frequent internal wallet security tests are all common procedures for reputable crypto interest account providers.

Additionally, service providers often partner with industry trusted custodians such as BitGo to store and protect account balances.

Bitcoins themselves do not fundamentally earn interest but there are blockchain finance products such as Bitcoin Interest Accounts that enable users to earn compounding interest on their Bitcoin holdings.

A benefit of crypto interest accounts is the low amount of fees. Generally, users are only subject to basic blockchain network withdrawal fees.

Minimum and maximum account balances for crypto interest accounts vary depending on the provider:

Currently, there are no debit cards available from crypto interest account providers for account holders.

Users interested in crypto debit cards can view our compare crypto debit cards section.

Users can also lend their crypto assets to traders looking to access more capital for trading on margin for an agreed upon interest rate.

This process is called margin funding, and is available on several reputable cryptocurrency exchanges.

Yes. As with traditional savings and interest accounts, the service provider reserves the right to change interest rates at any time.

Crypto market volatility, supply vs demand, and increased competition for service providers can all affect interest rates.

Companies providing crypto interest accounts do not require a credit check.

Crypto interest accounts are free of charge to open.

Crypto interest accounts cannot lose value in their respective crypto asset units. However, since Bitcoin is priced in fiat value, crypto interest accounts can lose fiat value in adverse market conditions.

Reasons include:

• Interest account providers are competing to acquire new users, and therefore currently offer generous interest rates.
• Higher relative demand for crypto loans.
• Higher account risk. Deposits are being used to issue loans to traders, corporations, and entities in a volatile market.
• Smart contract automation results in a more efficient customer onboarding process. Crypto interest account providers have less overhead costs than traditional banks and therefore have higher margins.
• Crypto asset markets are less efficient than traditional markets.

Most reputable crypto interest account providers do not require asset lock up periods and users are free to withdrawal their assets at any time without penalty.

In general, non-custodial (decentralized) crypto interest account providers do not require KYC and are therefore relatively anonymous. Custodial (centralized) crypto interest account providers will require users to KYC.

Yes. There are several crypto interest accounts that pay interest on stablecoins. See our Stablecoin APR & APY Rates index page for the available options.

This will depend entirely on your country of residence and local tax laws. Serious crypto investors should consult an experienced cryptocurrency tax accountant.