The Guide to Earning Interest with Crypto Savings Accounts

Anything written on this blog is purely for entertainment purposes only and should not be used as legal, financial or medical advice. Investing is inherently risky—please do your own due diligence.

For the past two years, I’ve been earning more than 8% interest in a little pocket of the internet. Why did I do this? To get higher return for my money compared to what traditional banking would give me.

Despite pre-Covid interest rates above 1% APY, I knew that my money was already losing its value with an inflation rate around 1.4%.

Attempting to get a return with crypto had its risks, yet I felt like the trade offs was worth the experiment:

High yield savings accountsHigh yield crypto interest accounts
Measly interest under 1% APY (as of Oct 2020)Interest up to 12% APY
Safe with FDIC protectionTypically no insurance nor protection
Easy money movementMay have to move money around a few times to “realize” interest earnings.

The strategy: Allocate some of my money sitting in low-interest, FDIC-backed savings accounts into higher-interest, unprotected cryptocurrency accounts.

Specifically, I’ve been earning this interest with stablecoins which are cryptocurrencies pegged to a (more) real assets like gold or the U.S. dollar. You can read more about stablecoins on Wikipedia.

Interested in potentially getting higher interest by buying and holding cryptocurrencies? You’ve come to the right place to learn. But cryptocurrency and investing Stablecoins and crypto have their inherent risks, so consider yourself fairly warned.

I’ll ultimately be recommending BlockFi as my go-to for earning interest with crypto. So if you want to skip the tutorial, start with BlockFi. You’ll get $10 in free Bitcoin if you sign up with my friend link and deposit $100 or more. (If the link doesn’t prefill, put 89b00acc in the referral code field). I have no affiliation with BlockFi other than being a satisfied user who’s been using them for a few years.

The exact steps to earn interest on cryptocurrency

If you already have crypto in accounts like Coinbase or Blockchain.com, there’s a chance that some of your crypto may already be earning interest. So…job done?

However, traditional crypto exchanges are a bit slow on the high interest game. Even though Coinbase is a co-creator of the USDC stablecoin, they only offer ~1.25% interest compared to the 8.6% interest on BlockFi.

I’ll walk through the steps typically required in the process of earning interest on crypto, then show you how my recommended solution dramatically simplifies the process.

Step 1: Acquire cryptocurrency (stablecoins)

The first step depends on whether you already have cryptocurrency, and whether the place that crypto is stored is offering any crypto.

If you don’t have cryptocurrency, consider reading my crypto starter guide here. If you want the fastest way to get started earning an interest rate on crypto, keep reading the rest of the steps.

Here’s a quick cheatsheet on what you can do depending on your scenario:

Do you have crypto?Does your account give interest?Then do this:
Yes I have cryptoYesNice! Keep it where it’s at, or move it somewhere to earn higher interest
Yes I have cryptoNoTry moving some of your crypto to interest-bearing accounts.
I don’t have cryptoN/A Skip to BlockFi recommendation

But heads up—not all cryptos earn interest. The top ones that do are either Bitcoin, Ethereum, and popular stablecoins.

Due to their liquid nature and lower volatility (compared to traditional crypto), you can typically earn higher interest with stablecoins. Here’s a table of interest offered on BlockFi, pulled on Oct 18, 2020:

CurrencyAmount **APY
BTC (Tier 1)0 – 2.56%
BTC (Tier 2)> 2.53.2%
ETH> 05.25%
LTC> 05.0%
USDC> 08.6%
GUSD> 08.6%
PAX> 08.6%
PAXG> 04%
USDT> 07%
Here’s a table of interest offered on BlockFi, pulled on Oct 18, 2020. The stablecoins in bold offer the highest interest rates.

There’s a plethora of stablecoins out there, but I’ll mainly be recommending USDC and GUSD, which are created and backed by U.S. based companies that I trust — Coinbase and Gemini, respectively.

Step 2: Put your crypto somewhere that earns interest

The crypto wallet or exchange you’re on may or may not be offering interest on its deposits. If the crypto wallet or exchange already provides interest, like Coinbase or Blockchain.com, you may choose to not do any extra work and observe what earning interest in crypto feels like.

The famous Coinmarketcap has an earn interest page that breaks down where to earn top interest rates based on the cryptocurrency you already have.

Surf around long enough and you’ll find a few repeating names crop up like BlockFi, Celsius Network, and Nexo.

I ultimately decided to trust my money and crypto with BlockFi.

You can scroll down to this section to read an detailed account of why I chose them over other competitors. and will show you a comparison table why:

Step 3: Earn interest on your crypto

This is the fun part. Watch your money grow!

Screenshot from BlockFi account

Most crypto platforms will pay you interest in the crypto that you deposited. Example: If you deposit $1000 worth of USDC, you’ll earn 86 USDC (8.6% interest) 1 year later.

*Useful feature* BlockFi allows you to choose the currency you want to be paid interest in. You can choose GUSD for easy withdrawal later, or Bitcoin if you think that’s going to collect the most value.

This is all gravy if you just want to ride the interest train. If you want to realize your gain$ in US dollars, I’ve got you covered in the next step.

Step 4: Convert crypto back to dollars (optional)

If cryptocurrencies still feel less tangible to you, and you want to get real dollars out…it’ll might take a few transfers.

To do this, you’ll need an exchange where you can sell your cryptocurrency and get it back in fiat currency (USD).

Here’s an illustration of how that works in BlockFi:

Putting money inTaking money out
Make a free, bank transfer (ACH) of dollars Withdraw money using a normal ACH bank transfer.
BlockFi automatically converts your USD deposit into the GUSD stablecoin, or Gemini Dollars.Use the free ACH bank withdrawals, or for bigger amounts use a wire transfer (which has a fee though).
Your GUSD stablecoin will earn 8.6% in interest, compounded monthlyYour money is automatically converted 1:1 from GUSD to USD into your connected bank account.

The negative part? Withdrawals may come with fees, like BlockFi’s $0.25 charge withdrawing stablecoins to other crypto exchanges.

Gemini currently has free withdrawals for their native currency.

At the end of the day…If I really needed to get money out into USD, I trust BlockFi’s existing infrastructure to do it…not one of the other European startups that prioritize Euros/British pounds #sorrynotsorry

Conclusion: BlockFi is the easiest option to earn high interest on crypto

Reading steps 1-4, you have a sense of the process of earning higher interest with crypto. If you want the most seamless, and most trusted (IMO) way to turn dollars into stablecoins into interest—and back into dollars—I don’t see any better option than BlockFi right now.

After evaluating a ton of other customers, it really comes down to BlockFi working as expected. For U.S. customers, BlockFi effectively works like a simple savings account, but with a crypto twist. And that, in my opinion, is the boring innovation new crypto users need.

Here’s BlockFi compared to the other top runners:

(most reliable)
(worth watching)
Celsius Network
(highest stablecoin rates)
Up to 8.6% interest—see ratesUp to 10% interest—see ratesUp to 12% interest—see rates
U.S. Based Team that you can contact by phone. Bulgarian-based team. No phone support. Product is Euro-centric, prioritizing deposits in GBP and EUR.U.K.-based team, has phone support.
Smooth web experience that works just as expected right out the gate. Simple ACH (bank) transfers. Decent web and mobile app. “You can make unlimited free-of-charge fiat withdrawals, crypto and fiat transfers into your Nexo Wallet”Requires mobile app, no way to access via desktop (minus for me). Fees for depositing via wire or ACH.

BlockFi gets the basics right, from easy bank transfers to U.S. based support (I’ve chatted with them by phone and email) and easy bank transfers.

Every other platform I looked into made me uneasy:

  • Celsius Network is available on iOS and Android apps only. That means no web-based management tool. When it comes to finances, I have to access things from my browser. The Android app is a bit buggy on my Pixel 3. These factors killed my excitement from the touted 12% interest, but I’m still watching Celsius Network closely.
  • Nexo made claims of earning 10% interest on USD (not crypto!) but I could never find ways to deposit USD. Looks like other users had similar problems too. That and Reddit posts like this about the un-delivered debit card are not promising.
  • I also tried other options that failed me at some point in the UX. Abra’s is mobile-app only and wouldn’t open on my Pixel. Blockchain.com requires jumping through some extra hoops just to deposit $ and start earning interest.

I really hope these other players get their act together and make their products easier to use. Usability is one of the missing pillars of crypto.

From Day 1, BlockFi has worked for me and it’s gained my trust, from their progress to their backing by Gemini.

I’m crossing my fingers that the ACH withdrawals come online soon to avoid that hefty $20 wire fee. Either way, BlockFi is now my default crypto savings account.

Ready to earn interest? Get $10 in free Bitcoin if you sign up with my friend link to BlockFi and deposit at least $100. The link should populate the referral code 89b00acc on the sign up page.

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