Best Crypto Interest Rates in 2024

It is no secret that the crypto industry offers some highly enticing and lucrative interest rates for people looking to save and store their wealth. However, sifting through the many options on the market can be a headache. Thankfully, we have collated some of the top crypto interest rates available in 2024, to help jumpstart your journey and investigation.

Cryptocurrency Interest Rates 2024

Let’s view some of the most recent crypto interest rates in 2024:

Why Are Crypto Interest Rates Higher Than Traditional Interest Rates?

Compared to the fiat market, crypto interest rates tend to look more attractive and worthwhile. But exactly is this?

There are several reasons. For starters, companies and projects offering interest in this sector are typically much smaller (and therefore leaner) than fiat institutions such as banks and other financial organizations. This means they do not hire many people, or even have many physical offices and branches.

Another reason is that the interest offered is sometimes connected to the increased risk involved. This is especially true with cryptocurrencies, which are known for their volatility. The perspective is that opening a savings account with these assets is higher risk than with fiat, and so there is a higher reward associated with it.

However, such a viewpoint does not translate over to stablecoins, like USDT and USDC, which have some of the highest interest rates in the entire crypto market. The reason behind these stats is that there is an extremely strong demand for them, which results in greater rates. Stablecoins are a major aspect of many traders, lenders, and company’s business strategies, due to their lack of volatility and global accessibility. Therefore, you could say it is a “saver’s market”, in the sense that companies and protocols are actively looking for people to open accounts and deposit their stablecoins, and working hard to offer competitive rates. The same also applies to regular cryptoassets, but to a slightly lesser extent (as reflected by the typical rates on offer).

Popular Cryptocurrencies and Their Interest Rates

Let’s take a look at some of the most popular cryptocurrencies, and their respective rates. This should give you an idea of what you can expect to find on the market.

Bitcoin: BTC interest rates vary from a very low 0.01% APY offered by Aave, to a questionably high 7% APY offered by Nexo. Ledn can be found somewhere in the middle of this, currently offering 3% APY. Remember that while you should definitely focus on the rate being provided, you must additionally consider the reputation of the project facilitating it, and whether they have a good legacy. This is why many people choose Ledn, despite it not being the highest percentage, as it has a long and trustworthy history, where transparency and risk management are at the core of its business model.

Ethereum: ETH interest rates range from 0.04% APY at Aave, and 8% APY at Nexo. For Ledn users, they can currently receive up to 4% APY interest. This is almost directly in the middle of these two values, revealing a very competitive percentage for the asset.

USDT: At the lower end of the range for USDT, you will find Compound’s rate of 4.56% APY, and at the higher end, you’ll find Ledn’s 10% and Nexo’s 16%. Receiving up to double figures on a stablecoin is a standard rate, which is why many people choose Ledn to open crypto savings or Growth accounts specifically for these assets.

USDC: With USDC, you can get 1.91% APY from Compound (which is relatively low), or receive up to 10% APY at Ledn, 12.07% APY at Aave, or 14% APY at Nexo. Here, these three rates are all in the double figures, placing them within a competitive range between each other. When the rates are so close to one another, you need to start asking yourself which company you trust and which ones have the safest risk management policies and security protocols. This is, in fact, one of the many reasons why people choose Ledn.

Crypto Interest Rates Pros and Cons

We’ve looked at some of the top rates on offer, but it is a good idea to contextualize our discussion by assessing the positives and drawbacks that come with saving in the crypto industry.

Pros

High Yields: As you have seen, there are some particularly high yields on offer. This is especially the case with stablecoins. Therefore, saving with crypto can often be more lucrative than doing so with fiat.

Variety of Assets: You can earn interest on practically any cryptocurrency out there. This naturally includes leaders like BTC, ETH, USDC, and USDT, but it is also possible to do so with lesser-known and niche altcoins. For day-traders and people who enjoy exploring some of the less popular coins and tokens on the market, this is a huge benefit as it means they can put their cryptocurrency to greater use, regardless of what asset it is.

Compound Interest: Many savings account services offer compound interest, which means that you earn interest on the interest you have already gained. As you can likely tell, this is a powerful wealth-growing method. To make use of it, simply open one of Ledn’s Growth Accounts, which allows you to gain compound interest on your BTC, ETH, USDC, and USDT.

Cons

Platform Financial Risks: When you are gaining interest on crypto, you must engage with a platform or service of some sort, in the sense that you need to hand your assets over to them. Doing so naturally comes with some inherent risks, as you are relying on a third party to be a custodian for or manage your cryptocurrency. If you pick the wrong project, then it could malfunction (if it is a DeFi protocol), or it could become insolvent or bankrupt (if you pick a CeFi company like Celsius or BlockFi). Even if you decide to earn interest by staking directly on a blockchain, there is a risk that the network will become faulty in some capacity. The best way to mitigate this is to pick a service with a strong track record for reliability, and good risk management methods in place, such as Ledn.

Volatility Risk: If you are gaining interest on an asset like BTC or ETH, then they are very likely going to experience rises and falls during that time. These coins, much like every non-stablecoin asset in the market, are known for sharp fluctuations. Therefore, the value of your savings are likely to bounce up and down often. While the interest you earn can help soften the blow when it comes to low periods, it may not actually offset any losses, should the asset drop. Even stablecoins carry some volatility risk, as they occasionally depeg at times, but it is fair to say they are much more consistent in their worth.

Limited Withdrawals: Some services limit your ability to access your assets. This is standard practice, as savings and yield-generating projects work on the basis that you will reliably leave a sizeable amount of your cryptocurrency with them for a decent period of time. At Ledn, withdrawal limits are not particularly stringent, with users being able to withdraw up to 100 BTC or ETH, and up to 1 million USDT or USDC every seven days. However, some other services are much more restrictive.

Is Earning Interest on Crypto Safe?

Like every aspect of the crypto market, there are some risks involved when earning interest on these assets (mostly listed above). However, generally speaking, earning interest is significantly safer than alternative methods of gaining returns, such as trading. Nevertheless, it is smart to consider the potential pitfalls and complications that can arise, simply so that you have a full picture of what you are agreeing to.

Where Do Crypto Yields Come From?

The interest you earn on crypto, referred to as yield, can come from a range of locations. Companies sometimes use the assets in your savings or growth accounts to provide liquidity to markets, make investments, or lend them out to others (with the interest those participants pay contributing to your returns). This is the case for both CeFi and DeFi projects.

If, however, you decide to stake your assets on an actual blockchain, then the returns are made from the network rewarding you for helping secure and process transactions by locking your finances away. This is only possible on proof-of-stake blockchains.

Where Can I Get The Best Return on My Crypto?

The optimal method of increasing your returns is to open a savings or growth account with a company that offers good rates, with compound interest. The more of your assets you enter into these accounts, and the longer you leave them untouched for, the greater your yield will be.

One method for achieving this would be to open a Ledn Growth Account, where you can earn up to 3% APY on BTC, 4% APY on ETH, and 10% APY on USDT and USDC. These are competitive rates that can help you passively grow your assets.

Conclusion

As you can likely tell by now, earning interest on crypto can be a highly profitable way of making a return on your assets. You should now have a good idea of what the rates are like for top cryptocurrencies in 2024, giving you an indication of what is possible. If you are looking for a specific platform to check out, make sure to take a look at Ledn and their Growth Accounts. Here, you can earn interest on Bitcoin, Ethereum, USDT, and USDC. This is a reputable company with a legacy of being transparent and having strong risk management protocols in place, making it a great option for people who are looking for a well-respected service to work with.

The above is general commentary, you should seek advice from a professional regarding your specific financial situation.

Sponsored by 21 Technologies Inc. and its affiliates (“Ledn”). All reviews and opinions expressed are based on my personal views.