Best USDT Savings Accounts in 2024

As the leading stablecoin in the crypto market, there are many people who are interested in opening a USDT savings account. Let’s take a look at what positives these accounts offer, how they differ from any alternatives available, and what some of the top service providers are like.

What is a USDT savings account?

This is a type of account that people place their USDT into, where they can build interest on it over a prolonged period of time. This is similar to a traditional fiat savings account, although interest rates and risks can differ significantly.

What Are The Top USDT Savings Accounts?

Let’s take a look at some of the top USDT savings or Growth Account providers on the market. It can often be hard to figure out who is significant in the crypto industry, and so we have put together a short (and non-exhaustive) list of some companies to look out for.

Ledn

With a strong reputation for risk management and transparency, and a dedication to offering competitive rates, Ledn is a top choice for people looking for USDT savings accounts. Referred to by the company as “Growth Accounts”, this is a transparent and flexible method of saving USDT. With interest currently reaching up to 8.50%-10% APY, this is a highly enticing percentage for serious savers.

Pros:

• Interest rates currently reaching up to 10% APY.
• Ring-fenced accounts, meaning that USDT Growth account assets are only exposed to the counterparty credit risk associated with the institutional borrowers that generate the interest for such accounts. Any potential losses from Ledn’s other activities or an unlikely event of bankruptcy will not affect Growth Account assets.
• Ledn is deeply transparent about its activities, with biannual proof-of-reserve data, and monthly open book reports.

Cons:

• Limited USDT functionality other than Growth accounts, but commitment to add Trading and Loan features soon.
• Growth accounts are limited to only four cryptocurrencies, including USDT.

Nexo

While Nexo was once a leading name in the crypto lending and saving space.  Nexo is still operational, offering USDT savings accounts.

Pros:

• Flexible and fixed terms available.
• Compound interest available.
• A huge range of altcoins are supported.
• Up to 16% interest on USDT savings accounts.

Cons:

• Its highest rates are reserved only for its premium users.

YouHodler

YouHodler is a wide-ranging crypto ecosystem, offering tools and services for an array of digital assets. While the company is mostly known for its trading services, it also provides yield accounts, which work similarly to savings accounts.

Pros:

• USDT interest rates are between 6.00% and 12.00%, depending on a user’s trading volume.
• Weekly payouts available.
• Yield accounts are flexible by nature, but the company offers tailored fixed options as well.

Cons:

• To reach the top USDT interest rates, users must have a trading volume of $5 million per month, making them practically unattainable to the vast majority of USDT users.
• YouHodler is not known for its transparency.
• There are high fees via some deposit methods.

BlockFi

Like Nexo, BlockFi was considered a leader of the crypto lending and saving sector. However, in recent times, disaster has struck due to poor risk management, which has led the company to file for Chapter 11 bankruptcy, and for legal investigations to take place regarding it.

Pros:

• When it was functioning, USDT interest rates reached up to 8.75%.
• A wide range of cryptocurrencies used to be available.

Cons:

• The company is no longer operational.

Gemini

Gemini is best known for its crypto trading services, but it also has offered savings accounts in the past. This was part of its Gemini Earn scheme, which allowed people to gain interest on their assets. However, as of recently, the service has been halted indefinitely due to mistakes made by both Gemini and Genesis, the company it partnered with to provide its products, which led to many customers losing funds. Thankfully, the companies have announced a remuneration plan is on the horizon, which should make many users “nearly whole” in what they lost.

Pros:

• Gemini is a household name in the crypto space, making it highly recognizable.

Cons:

• The service is no longer active.

KuCoin

Like Gemini, KuCoin is known for its trading services, however in truth it is more of a fully-fledged crypto ecosystem. Among the tools it offers is its KuCoin Earn scheme, which allows people to gain interest on their digital assets. These are essentially savings accounts, although the company does not refer to them as such.

Pros:

• Flexible and fixed accounts are available.
• Fixed accounts typically have short periods of time, such as 7-35 days.

Cons:

• USDT interest rates reach a maximum of 4.6% APR, which is relatively uncompetitive.
• KuCoin is not particularly transparent in its actions.

Aave

Unlike the previous companies listed, Aave is a decentralized service. This means that it functions largely autonomously, via smart contracts that connect to different blockchain networks. Aave does not offer savings accounts exactly, but it does provide “staking” tools. However, this is not the same as traditional staking, where user actions have a direct impact on specific blockchains and are given voting rights. Rather, this is a type of yield account, where users gain interest as a reward for providing liquidity to its assets.

Pros:

• A decentralized service, therefore adhering to the core principle of the blockchain industry.
• A wide array of assets are available.

Cons:

• USDT APY hovers around 2.50% and 6.50%, which is relatively low.
• Without any centralized point of control, this means that if problems occur, there is nobody who can help.

Bake.io

Formerly known as CakeDeFi, Bake.io is also a decentralized service. However, unlike Aave, this project makes a clear distinction between staking and yield-related activities (referred to as “YieldVault”), as it offers both. As USDT cannot be staked in the conventional sense, this falls under its YieldValue service. Essentially, this is a method of earning a passive income by adding liquidity to the Bake.io protocol.

Pros:

• A transparent and open project.
• You can choose what asset your rewards are provided in, with some assets offering higher yields.
• A flexible structure that allows you to withdraw your assets at any moment.

Cons:

• Only seven assets are supported.
• Decentralized projects have very limited customer support.

How does a USDT savings account work?

USDT savings accounts work by having you enter your assets into an account, with the service provider giving you interest relative to how much you hand over and how long you keep it in the account for. The way interest is earned will differ among providers, but generally it occurs due to the service provider leveraging your assets for various financial activities and operations, such as lending to borrowers, margin funding, or other investment strategies. In return for providing them with liquidity, you are rewarded with a portion of the profits in the form of interest on your holdings. It is essential for users to be aware of the risks involved and ensure they choose reputable platforms with transparent practices, as these are typically centralized parties, and so due dilligence is needed before handing your finances over to a third party.

Why Use a USDT Savings Account?

Let’s take a look at why USDT savings or growth accounts are an enticing option for many people:

Higher Interest Rates than Traditional Banks

Traditional banks are notorious for having lower interest rates for their fiat savings accounts than what crypto saving services can offer. This is for a myriad of reasons, such as the risks involved in both services, although one major factor is that banks have higher overhead costs (mainly due to having physical branches open with many employees and stringent regulations). This means that many people can make greater returns with USDT savings accounts than they can with standard fiat alternatives.

Easier Access to Digital Currencies

Some people prefer working with digital assets in their day-to-day lives, rather than fiat. This is especially the case for nations that have unstable currencies, or who have turbulent relations with the US, meaning they cannot access USD as easily as others can. Individuals like this may find themselves using cryptocurrencies more often. Therefore, having a USDT savings account makes more sense than trying to obtain a fiat one. The same is true for people who primarily make a living from crypto trading– they may want to keep their access to the crypto industry as easy as possible, often opting to not convert to fiat.

Earn A Return While You Hold

For long-term crypto holders, it makes sense to open a USDT savings account, as this allows them to earn more digital assets in a passive manner. Instead of having their USDT simply sit in a wallet doing nothing, they can put it to work with a savings or Growth Account, and build interest on it.

Important Factors to Consider When Comparing USDT Savings Accounts

Let’s take a look at some of the most important factors to keep in mind when it comes to comparing USDT savings accounts. However, note that this is an incomplete list, as there are many other aspects to consider, but at the very least, these ones should be critically thought about.

The Interest Rates on Your USDT Deposits

Every company offering USDT savings or Growth Accounts or similar tools will provide different interest rates. Naturally, this will be the first thing most people look for when making comparisons, but regardless, it is worth mentioning. It is also worth considering the fact that many companies and services have fluctuating interest rates, meaning that what you can earn in one period might be different from another period.

Fees for Deposits and Withdrawals

Some services will charge fees for both deposits and withdrawals. Typically, withdrawal fees will be a little higher, especially if you are taking your digital assets out relatively soon after entering it into a savings account. This is because such accounts are designed primarily for long-term. When it comes to crypto, you also need to factor in transaction fees that are incurred by using a blockchain. USDT is relatively interoperable, and so it runs on a range of different blockchains, although services will usually use the Ethereum network. If transactions (such as deposits and withdrawals) happen during times of congestion, such as when the Ethereum blockchain is being used by many people, this can drive up fees. It is best to align your transactions with times when the blockchain is being least used.

Your Chosen Platform’s Reputation

Each platform will come with its own legacy, history, and a range of preconceived ideas that the wider public have about it. These make up its reputation. It is crucial to look into this, before picking any particular service, as this is the best way to avoid any potential issues the company might have in the future. Considering some formerly top crypto companies have closed down due to insolvency or bankruptcy (such as BlockFi and Celsius Network), it is more important than ever to keep this in mind. Taking Ledn for example, they have a good reputation for being deeply transparent, with the company publishing their monthly open book reports and biannual proof-of-reserve attestations.

USDT Savings Account Risks

Just as with any type of financial activity, USDT savings accounts pose some risks. That being said, using a savings account, or Growth Account, is viewed as less risky than trying to make profits via direct trading.

There are two significant risks to consider:

USDT Depegging

USDT is a stablecoin that is designed to reflect the price and value of the US dollar. This occurs via there being a 1:1 reserve of USD (or equivalently priced assets) for every USDT that is in circulation. If, for some reason, USDT loses its value in a way that is asymmetrical to actual US dollars, then it can cause your assets to depreciate in unpredictable ways. This is the case with any US stablecoin, including USDC.

Insolvency or Bankruptcy Risk

As mentioned earlier, if the service you use falls short on cash and finds itself becoming insolvent or bankrupt, then this can affect end users. The best way to avoid this is to search for a reputable provider, and investigate what their practices are when it comes to other people’s funds. If a service implements ring-fenced accounts that do not get affected by counterparties or products that have no involvement in the interest being produced, such as how Ledn Growth Accounts operate, then this is a good sign that the digital assets in those accounts have improved safewards no matter what happens to Ledn.

Should You Use a USDT Savings Account?

Determining whether a USDT savings account is right for you requires some inward reflection on what your intentions are financially, and what your behavior is like when it comes to cryptocurrency. If you are a person who holds USDT, and is comfortable handing it over to a centralized party for a potentially prolonged period of time, then this could be a fantastic avenue of generating passive income.

Many traders opt for USDT savings accounts for this reason, as they often have reserves of cryptocurrency that they wish to make additional digital assets from. These individuals tend to leave a lot of their finances in the form of a stablecoin, such as USDT or USDC, so that they can easily access them. While savings accounts reduce accessibility to some extent, they are still easier than making constant fiat-to-crypto conversions for some people. Plus, some services such as Ledn, offer the ability to seamlessly send USDT from their Growth Accounts to their standard non-interest bearing Transaction Accounts.

Another type of person who finds USDT savings accounts useful are those who live in nations where accessing US dollars is complicated (often due to shaky relations with the US), or where their native fiat currency is unstable. For people in these circumstances, accessing USDT and other dollar-backed stablecoins makes transacting much easier. With this in mind, they may also want to place a portion of their assets into a crypto savings account that allows them to earn interest over time in a relatively low-stress way.

Conclusion

USDT savings accounts are a major part of the crypto industry; useful to many people around the globe. With interest rates that are typically higher than traditional fiat savings accounts, and global accessibility, this makes them a great option. Of course, finding the right service provider can still be a complex process that requires a lot of research before making any agreements.

If you are thinking about opening a USDT savings or Growth account, then Ledn is a great place to consider. With a reputation for transparency, risk management protocols, and competitive USDT interest rates, their Growth Accounts are the perfect tool for many crypto users and enthusiasts.

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