USDT (Tether) Interest Rates Compared [2024]

When considering the prospect of earning interest on USDT, one of the first things people look out for are the rates on offer. This is by no means the most important factor to keep in mind, but there is no denying that a good interest rate is a major positive. With this in mind, let’s examine some of the interest rates found in the USDT saving space and see how they compare against each other.

What is USDT (Tether)?

USDT is a dollar-backed stablecoin. This means that it is a cryptocurrency that has a value that is equal to the US dollar. Doing so is possible because Tether, the company that runs USDT, has a 1:1 reserve of US dollars (or assets of an equivalent value) for every USDT that is in circulation. This helps to keep the price static.

How Do I Earn Interest On My USDT?

There are two main methods you can use to earn interest on USDT. You can either open a savings or Growth Account, or you can yield farm with it. Sometimes people refer to the act of staking USDT to earn interest, but this is a misnomer, as the cryptocurrency does not have its own proof-of-stake blockchain that it relies on.

USDT savings accounts, such as Ledn’s Growth Accounts, are a very common choice for people, and one that is favored by many. This is where you place your USDT into an account and then let it accrue interest over a period of time. The amount that you add to an account, along with the length of time you leave in for, will affect how much you earn.

Yield farming is a more niche and experimental method of earning interest. This is primarily a DeFi activity, where you lend out your USDT to various liquidity pools and receive a reward for doing so. While yield farming certainly has its uses and fans, it is a relatively novel concept, and so it does not have the same legacy as savings accounts do.

The Best USDT Interest Rates

Let’s take a look at some top USDT interest rates on the market, and give an overview of the projects that are offering them. These will all provide interest via savings accounts or yield farming, or potentially a combination of the two.

Ledn

With a legacy of being open and transparent, and with highly competitive USDT interest rates currently set at 8.5% APY, Ledn is a top choice for many crypto fans and enthusiasts. This is a platform that has proven itself to be trustworthy, with its biannual proof-of-reserves, regular open book reports, and ring-fenced method that ensures accounts are only affected by the credit risk of the counterparties that  generate the interest for such accounts. By opening a Ledn USDT Growth Account, users can rest assured that they are working with a legitimate and transparent company in the crypto lending and saving space.

USDT interest rate: 8.5% -10% APY

Aave

Aave is an industry leader when it comes to decentralized lending. This project is essentially a trailblazer in the space, however, you should bear in mind that even though it has built a strong reputation, its decentralized nature means that there is a sheer lack of customer service, and that the underlying protocols and methods behind it are relatively novel and experimental.

USDT interest rate: 0.05%-8.5% APY

Binance

Binance has become a household name as a crypto trading service, although in truth it is more of a fully-fledged ecosystem. With this in mind, Binance offers users the ability to earn interest on their USDT. However, it is worth noting that to get the best interest rates for USDT, you will have to become a VIP user, which is achieved by having a relatively high monthly trading volume– therefore, this service works better for high-value users and businesses.

USDT Interest rate: 6.46% APY

Bake.io

Bake.io, formerly known as CakeDeFi, is a decentralized crypto service, similar to Aave in how it functions. However, the project offers a different range of features and tools, and even allows users to stake certain cryptocurrencies.

USDT interest rate: 0.46% APY

YouHodler 

YouHodler is a centralized crypto ecosystem that takes several novel approaches via its toolset. For instance, its savings accounts and loan services are slightly different, operating largely under its MultiHodl service. It is a little complicated to explain, but it essentially combines trading with saving.

USDT interest rate: 8.33% APY

Blockchain.com

Blockchain.com is a well-known cryptocurrency website in the industry, with many people using its Bitcoin block explorer and wallet creation tools. However, it also offers earning tools for USDT, BTC, and a range of other assets.

USDT interest rate: 7.00% APY

Nexo

While Nexo was once a highly revered leader of the crypto saving and lending sector, there are various reasons nowadays to question its legitimacy and cast doubts on the services it offers. For instance, Nexo has faced a range of legal troubles, such as being fined by the US SEC for $45 million due to violating securities laws, and its co-founders have even been implicated in a Bulgarian criminal case. Overall, it is fair to say that it has fallen from grace– although it still maintains a loyal user base.

USDT interest rate: 12.00% APY

CoinRabbit

While less well-known than some of the other projects listed, CoinRabbit is a big name in the lending space. It offers a range of savings account options for stablecoins, and even lets you transfer your USDT on the Ethereum, Binance Smart Chain, and TRON blockchains. This might not be important to the average user, but for advanced crypto veterans, they might have a preferred blockchain to work with.

USDT interest rate: 5.00% APY

Bit.com

Bit.com is primarily a trading service, although it also offers savings options for USDT, BTC, and several other cryptocurrencies. With minimum deposits of $50, this can be very appealing to beginners looking to explore the sector for the first time.

USDT interest rate: 8.25% APY

Is USDT a Safe Stablecoin?

There is no way to discuss Tether interest rates without actually tackling the topic of USDT’s safety profile itself. Over its many years in the crypto space, USDT has built an intriguing reputation. For a long time, it was viewed as a “necessary evil” in the industry– in the sense that it was the leading USD stablecoin with global adoption, but that it had been cagey in the past about its independent auditor reports and reserves.

As a result, many people viewed USDT in an unfavorable light, and preferred working with alternatives like USDC. However, in recent years USDT has worked hard to regain the public’s trust, and is now significantly more transparent and open about its reserves and its independent auditor reports history. The fact that you can directly check details like this on Tether’s website is a good indicator that it is a reliable stablecoin.

That being said, in the crypto industry (just as with every financial sector), there are  risks involved that can never be fully eradicated. There is always a chance that disaster could strike and you could find yourself at a loss. The most likely way this could occur is via USDT losing its value and becoming depegged (meaning that 1 USDT no longer equals 1 USD). While most depegging that happens is short-lived, such as with USDC’s recent incident, it is possible that something could trigger an irrecoverable position.

However, you should not let matters like this entirely dissuade you from looking into USDT interest rates, as this is more of an outlier situation than one that is guaranteed, expected, or predicted in any way. It is more so a matter to keep in mind due to the inability to fully reduce risk in such an activity.

Is Earning Interest on USDT Worth It?

When it comes to assessing worth, there are a few questions you need to ask yourself personally. For starters, you need to consider how much you can earn over a set period, and if this is a suitable level of profits. Remember, earning interest is a typically slow and accumulative process, and so you cannot expect to have great returns unless you are thinking long-term.

It is also important to consider these rewards in respect to the risks involved. While the risk of USDT failing or losing tremendous value is relatively low, there are also risks that can come with using certain projects that help you gain interest. Some services raise more red flags than others, meaning they might have a higher chance of collapsing or causing complications. This becomes especially significant when you think of how companies like BlockFi and Celsius Network fell apart in recent history.

With all of this in mind, it makes sense to pick a service that has solid and competitive Tether interest rates, as well as a strong legacy of trustworthiness and transparency. This is exactly what Ledn offers with its Growth Accounts. You can currently earn up to 8.5% interest on your USDT, whilst also engaging with a company that is revered for its openness and risk management . For instance, Ledn publishes its proof-of-reserves attestations biannually and its open-book reports monthly.

Plus, all their Growth Accounts are ring-fenced, meaning that the assets held in them are only exposed to the credit risk of counterparties who generate the interest for the accounts in question. Any potential losses from Ledn’s other activities or an unlikely event of bankruptcy will not affect Growth account assets. This prevents any unfair and unorthodox intermingling and redistribution of funds in any way.

How Do You Maximise Your Returns With USDT?

The best way to maximize your returns is to find a service with good USDT interest rates, and to then allocate your assets to them for a prolonged period of time. Interest works best when viewed as a way of accumulating rewards over a sizeable period of time. This means that the longer you keep your USDT in a place that builds interest, the better your returns will be.

One great option to consider is Ledn’s USDT Growth Accounts. With a current highly competitive rate of 8.5% APY, you can make good returns overall, whilst resting easy knowing that you’re engaging with a company that has a fantastic track record for transparency and risk management.

Bear in mind that the strongest returns are available only to those who are patient, or who have the time and digital assets to wait. This does not necessarily mean you need to hold your assets somewhere for a whole year, as you should be able to see good results within a few months, but typically longer is better.

Conclusion

As you can likely tell by now, there is a large range of Tether interest rates available on the market, all managed by different companies and services that have different practices, methods, and risk management protocols. While it is extremely important to look out for high-interest rates, it should only be one element that makes up your entire judgment call. You will also want to work with a service that is trusted and that treats their community with the respect they deserve.

With this in mind, Ledn’s Growth Accounts are a great way of building USDT interest. Not only are Ledn’s interest rates impressive, but they actively care about their user base, and ensure that their finances are looked after (with their ring-fenced accounts), and that the company’s activity is accounted for and visible to everybody (via their open book reports and proof-of-reserve data). If this sounds interesting to you, make sure to take an in-depth look at Ledn and consider trying their accounts out for yourself.

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