One of the reasons why many people have begun converting their fiat into crypto assets is partly due to the poor interest rates from most traditional financial institutions. Instead, individuals who have become familiar with the cryptocurrency scene are depositing their crypto assets into various crypto platforms that offer very attractive gains. This is primarily due to the higher interest rates on these platforms and many more additional perks. In this article, we will highlight some of the best CeFi cryptocurrency platforms that offer the highest interest rates! But first of all, how do these platforms work, and how can they pay out such high interests?
How do Cryptocurrency Earning platforms work?
Most CeFi (centralized finance) cryptocurrency platforms operate just like any other traditional financial institution. When you deposit your assets onto the platform, your assets will be used by the platform for various purposes. Some platforms will use your assets as liquidity for loans, other will re-invest your assets, and some platform will do both and even more. Think of it this way: the platforms need to be earning more using your assets than they are paying you – if not, there would be no business for them, and they would shut down.
For some people, this raises fears because they don’t know how their assets are being used. If this fear comes up in your mind, it’s important to realize that your bank is also using the money that’s in your account. You rarely know how they are using the money, and most of the time, they don’t even have it physically in the bank. For CeFi cryptocurrency platforms, the story is the same, and as long as the platform has a good reputation, you can rest assured that your assets will be safe.
So what are the best platforms for earning interest on your crypto?
1) Best Overall Platform: Nebeus – APY: 3.5% and 6.75%
Nebeus allows you to earn on your crypto through its innovative ‘crypto renting’ programs. These programs allow users to gain a passive yield by offering their crypto assets up for rent. Instead of simply depositing your coins, you will sign an agreement to rent Nebeus your assets for a period of time.
There are two plans available that bring you up to a 6.75% APY return on your rented crypto. First, there is the Juniper Plan, which allows you to get an interest rate of 3.5% per year. All you have to do is rent out at least 0.0025 BTC or 0.03 ETH for more than a month. Second, there is the Sequoia Plan, which boosts these interest rates to 6.75% per year. This is as long as you rent out a minimum of 0.12 BTC or 3 ETH for more than 4 months.
To date, Nebeus offers the highest interest rates for earning on Bitcoin and Ethereum in the CeFi industry. Nebeus even allows you to withdraw your earnings once every 24 hours, which is unique in the space. But in addition to earning on crypto, you can think of Nebeus as a one-stop-shop for all your crypto service needs. It functions as a platform for crypto-backed loans, provides crypto exchange, wallet services, and even offers insurance for your crypto. Overall, it’s a platform that’s hard to beat.
2) Best Platform For Large Deposits: Crypto.com – APY: 3% to 12%
You’ve probably seen advertisements for crypto.com everywhere. You might even have clicked on them out of curiosity.
Like most cryptocurrency platforms, Crypto.com offers you the chance to earn interest on your cryptocurrencies. The platform offers some of the best interest rates out there, though this varies from time to time. Through its Crypto Earn feature, it allows you to lock up your cryptocurrencies for a period of time and earn interest on them. These interest rates are stated on the website, and range from 3% to 12%, depending on the crypto you deposit.
The terms range between one and three months, which is a reasonable amount of time. However, you will only get higher returns if you deposit for a longer term and a higher amount. For instance, depositing 500,000 or more CRO equivalent (the platform’s native token) will earn you an additional 2% on your yields.
One downside is that Crypto.com only has an app – it has no desktop access. This might be inconvenient to some, but if you like handling your cryptocurrencies on the go, this could be the platform for you.
3) Safest Platform: Gemini – APY: 1% to 7.4%
Gemini has traditionally been known as a centralized exchange platform, famous for having been started by the Winklevoss twins. While it has established a strong userbase, it only very recently begun providing interest accounts for its cryptocurrency holders through the Gemini Earn program. However, currently, only customers in the US and Singapore can access this scheme. Users from these countries can earn from all 32 of the crypto assets supported by the platform.
What sets Gemini apart is its strong focus on security. It utilizes both secure hot wallet technologies and institutional-grade cold storage custody. What’s more, most of your assets are stored in cold storage. The remainder that is stored in the hot wallet is insured. In addition to its efficient KYC process and withdrawal limits, it has also never been hacked in the history of its operations.
4) Fast Payout Process: Hodlnaut – APY: 6% to 10.5%
Beyond its cheeky name, Hodlnaut provides value to its users in plenty of ways. It boasts the second-best (the best is Nebeus) payout speed in the CeFi crypto space. Beyond its high-interest rates, Hodlnaut provides you with weekly interest payouts. That way, yoy get to enjoy your yields more regularly, especially if you deposit larger amounts onto the platform.
The platform earns money on your deposited crypto by lending out your assets to established financial institutions, who will then pay an interest rate to Hodlnaut. With no minimum lock-up periods or minimum deposits, you can be sure that earning with Hodlnaut will be a fast and painless process.
5) Most Reputable Platform: Nexo – APY: 6% to 12%
No list on crypto interest accounts would be complete without Nexo. Nexo is one of the most established platforms around that allows you to earn high interest on your crypto assets. According to its website, it has more than 1.5 Million users and happy clients and is available in 200+ jurisdictions. It also has a social media community of over 100,000 followers across its various social media platforms.
It’s easy to see why so many people trust Nexo. The website is upfront about all its offerings, and it offers a decent $375 million insurance on all custodial assets. Beyond this, it has an around-the-clock customer service team that is responsive and strives to answer all questions.
As you think of new ways to make passive income, testing one or all of these platforms should be on the top of your list. Whatever platform you choose, the most important thing is to make sure that you’re comfortable with it.