How to Earn Interest on Crypto – Beginners Guide 2024

There are various ways to earn interest on crypto, ensuring that tokens do not sit idle in private wallets or exchanges. Examples include crypto savings accounts, staking, and yield farming.

In this guide, we explore the different ways to earn interest on crypto and which platforms to consider for this purpose.

Where to Earn Interest on Crypto

In this section, we discuss where to earn interest on crypto. We review seven top-rated places, each offering a different way to earn interest on digital tokens.

1. Pepe Unchained – Earn Up to 231% Staking APY with this Ethereum L2 Meme Token

Pepe Unchained ($PEPU) is one of the top coins that allows investors to earn a high interest. This is a meme token that is built on the efficient and scalable Ethereum layer-two (L2) blockchain.  

L2 tokens offload transactions from the main chain, facilitating fast transaction speeds while reducing the gas fees. The reduced number of transactions on the main chain also reduces the operational costs, allowing Pepe Unchained to offer higher staking rewards to $PEPU holders. 

To earn interest on their holdings, Pepe Unchained token holders can stake $PEPU on smart contracts. At the time of writing, Pepe Unchained offers an APY (Annual percentage yield) of 231%. 

Notably, Pepe Unchained will allocate 30% of its 8 billion token supply to staked token holders. Thus, this is one of the top platforms to generate passive income. Currently, $PEPU is priced at $0.0090178 per token on presale. Within a few months, the Pepe Unchained presale has raised over $8.4 million. 

To learn more about the project, go through the Pepe Unchained whitepaper and join the Telegram channel. 

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2. Crypto All-Stars – Earn Interest on Multiple Meme Tokens Through a Single Ecosystem

Crypto All-Stars ($STARS) is one of the best crypto platforms to leverage for earning interest on all your favorite meme coins. This revolutionary ecosystem is creating a hub through which multiple meme tokens can be staked in return for passive income. 

On Crypto All-Stars’ upcoming feature known as the ‘MemeVault’, users can stake popular meme coins, including Pepe, Dogecoin, Shiba Inu, Floki Inu, Turbo, and many more. The annual yield will be paid out regularly as $STARS tokens. 

$STARS is the native currency of Crypto All-Stars and is currently priced at $0.00138 per token on presale. To earn higher interest, users should add $STARS to their portfolio, as they can earn up to a 3x increase on the base APY being offered through the MemeVault. 

Furthermore, $STARS can also be staked on Crypto All-Stars to generate an APY of up to 5,073%. Due to this unique staking mechanism, Crypto All-Stars has already raised more than $350K on presale in a few days. 

Read the Crypto All-Stars whitepaper and join the Telegram channel for more information. 

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3. Base Dawgz – Multi-Chain Meme Coin Offers an Annual Yield of 876%

Base Dawgz ($DAWGZ) is another top platform that offers high annual interest to its token holders. $DAWGZ, the native token, can be locked to generate an APY of over 876%. 

The $DAWGZ token has a total supply of 8.453 billion tokens. In the long-term, 10% of the supply will be distributed through staking rewards. Base Dawgz has the potential to become a huge project due to its multi-chain compatibility. 

By leveraging Wormhole and Portal Bridge technology, Base Dawgz allows token holders to navigate across different blockchain networks. This leads to higher transaction speeds and lower gas fees. 

As a result, the demand for $DAWGZ has been soaring throughout the presale. Within just months, the Base Dawgz presale has raised more than $2.9 million. At press time, $DAWGZ is priced at $0.007414 per token. 

To stay updated with this project, read the Base Dawgz whitepaper and join the Telegram channel. 

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4. PlayDoge – Earn Up to 77% Staking Returns on this Play-to-Earn Meme Coin

PlayDoge ($PLAY) is the next cryptocurrency through which token holders can generate high interest. Through the staking mechanism, token holders can stake tokens and earn a high APY (Annual percentage yield).

From a total supply of 9.4 billion tokens, PlayDoge will allocate 1.128 billion tokens as staking rewards. At the time of writing, investors can stake and earn an APY of up to 77% on PlayDoge.

This new meme cryptocurrency is a fresh take on the infamous Tamagotchi game from the 90s. Now PlayDoge transports the iconic doge meme into a 2-D world. You can adopt an adorable 8-bit companion which you’ll need to care for similarly to Tamagotchi. You can also earn $PLAY tokens from completing challenges and taking part in mini-games.

Adding to your earning options, PlayDoge allows token holders to stake their tokens on two blockchains to earn interest: Binance Smart Chain and Ethereum. You’ll be able to stake your tokens on the chain that you purchase them on. As each chain operates differently, the staking rewards will also differ. Currently, ETH staking offers a 77% return, while BNB offers an 69% return.

For the ongoing presale, PlayDoge is allocating 4.6 billion tokens. In just a few weeks, the presale has already raised more than $6 million.

At press time, $PLAY is priced at $0.00528 per token. Learn more about this cryptocurrency by reading the PlayDoge whitepaper and joining the Telegram channel.

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5. The Meme Games – Olympics-Style Meme Token Offers 571% Staking Returns

The Meme Games ($MGMES) combines the competitive spirit of the Olympics with the fun and excitement of meme coins. Through this new platform, investors can get huge staking returns and win gamified presale bonuses. 

Before generating an interest on $MGMES, investors can purchase tokens through the ongoing presale. At the time of writing, $MGMES is priced at $0.0092 per token. Notably, The Meme Games hosts a 169m meme coin race, through which presale investors can earn a 25% bonus on their investment. 

Investors can select one of the five available meme avatars – including Doge, Brett, Turbo, Pepe, and Dogwifhat. The chosen avatar will represent you in this randomized race. If the avatar wins the race, you get the bonus. 

After buying $MGMES, the tokens can be staked on Ethereum-based smart contracts to earn an annual yield of up to 571%. Since the staking mechanism launched, more than 9.5 million tokens have been staked on The Meme Games. 

$MGMES has a total supply of 2.024 billion, out of which 10% of the tokens will be distributed through staking rewards. For more information, read the Meme Games whitepaper and join the Telegram channel. 

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6. ShibaShootout – Shiba-Themed Meme Coin Offers Over 1,000% Staking APY

ShibaShootout ($SHIBASHOOT) is a Shiba-themed meme token that allows investors to earn interest and be a part of the community. 

$SHIBASHOOT, the native token, can be staked on the ‘Cactus Staking’ mode, to earn an APY of more than 1,000%. The token can also be leveraged to purchase lottery tickets, giving users the possibility to earn even more tokens. 

On innovative platform modes such as ‘Campfire Stories’, users can share their meme coin experiences on a storytelling format and win $SHIBASHOOT as a reward. Token holders are rewarded with voting opportunities on the ‘token governance roundups’. This way, the entire community can decide the future of the platform. 

Currently, $SHIBASHOOT is priced at $0.0198 per token on presale. From a total supply of 2.2 billion tokens, 770 million will be allocated through the presale. Within a few months, the ShibaShootout presale has raised over $933K. 

Learn more about this project by going through the ShibaShootout whitepaper and joining the Telegram channel.

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7. Crypto.com – Earn Interest via Flexible and Fixed Savings Accounts

Crypto.com – one of the best crypto exchanges in the market, offers various savings accounts. Put simply, investors can deposit their tokens into a Crypto.com savings account and earn interest. In order to earn interest all of the time, investors should consider looking for highly rated savings accounts. Crypto.com savings accounts are available on some of the most popular cryptos to buy today. This includes Bitcoin, Ethereum, Cardano, Polygon, Polkadot, Solana, and Fantom. We also like that Crypto.com supports stablecoins, including Tether, Dai, Pax Dollar, and USD Coin.

The best DeFi interest rates will vary depending on several factors. For example, Crypto.com offers three lock-up terms on its savings accounts – flexible, one-month, and three-month. The longer the term the higher the interest rates. Moreover, higher interest rates are offered when staking CRO tokens. This is the native token fueling the Crypto.com ecosystem. The more CRO staked the higher the rewards. This is broken down into three tiers; under $4,000, between $4,000 and $40,000, and over $40,000.

For instance, investors can earn 6.5% on USD Coin deposits when locking the tokens for three months and staking at least $40,000 worth of CRO. This is reduced to 4.5% when CRO isn’t staked. The main drawback with Crypto.com is that interest rates on flexible accounts are minute. For example, Crypto.com pays Bitcoin interest rates of just 0.1%. This is also the case with flexible accounts on Ethereum, Algorand, and BNB.

Therefore, Crypto.com is better suited to investors that are comfortable locking their tokens for three months or more. In addition to savings accounts, Crypto.com also offers a fully-fledged exchange and NFT marketplace. It also offers. DeFi wallet, crypto loans, and a prepaid debit card. Finally, Crypto.com is considered a safe platform that is used by over 70 million clients.

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8. Binance – One-Stop Shop for Savings Accounts, Staking, and Yield Farming

Binance – the world’s largest crypto exchange, offers many different ways to earn interest on crypto. First, there is the ‘Simple Earn’ feature, which functions as a crypto savings account. Dozens of cryptos are supported, and interest rates are competitive. For example, investors can earn up to 49% on a 120-day lock-up period when depositing Ape Coin. Axie Infinity – which is one of the best crypto games, attracts interest of 37.9% on a 90-day term.

Those preferring flexible savings accounts might consider Ethereum or Tether, paying up to 4.08% and 2.41% respectively. These rates are subject to change. Another option at Binance is staking, 14 tokens are supported, including Litecoin, XRP, Ethereum, AAVE, and BNB. The best rate available is offered on XVS tokens at an APY of 6%. We also found that Binance is one of the best yield farming crypto platforms.

For example, farming IDEX/USDT or IDEX/BNB will yield an estimated APY of 174% and 156% respectively. While BEL/USDT and STX/USDT will yield 32% and 25%. Another way to earn interest on crypto at Binance is via its dual investment tool. This combines the fruits of options-style trading and interest accounts. Put simply, rewards are paid based on the closing price of the chosen cryptos on a specific date. For example, if Bitcoin closes above $29,000 in the following month, Binance will pay an APY of 32.61%.

Although Binance is one of the best places to earn interest on crypto, there are some drawbacks to consider. First, Binance’s regulator status still remains unclear. This is why investors in some countries, such as the UK, will often see Binance’s fiat payment facility suspended. Additionally, Binance is more suited to experienced investors. Many of its interest-bearing tools are complex and come with complicated terms. Therefore, beginners might want to consider other options.

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9. OKX DEX – Decentralized Web3 Aggregator With Industry-Leading Yields

OKX is a popular crypto exchange ranked in the top 10 for daily trading volume. The exchange has since launched a decentralized web3 aggregator platform that allows investors to earn interest without going through a third party. As an aggregator, this means that OKX connects to dozens of other exchanges and platforms to source the best yields for its clients. In fact, OKX also has the capacity to support multiple blockchain standards, including Ethereum, BNB Chain, Fantom, and Polygon.

This means that investors can earn interest on thousands of different cryptos. For example, when we searched for Tether, OKX ranks each supported exchange by the APY. OKX informs us that an APY of 9.05% can be earned via AAVE V3. Crucially, there is no requirement to open an account with AAVE V3 or any other supported platform. Instead, all interest-bearing activities go through OKX.

Other popular cryptos with competitive interest rates include USD Coin, BNB, and Dai, currently paying 4.8%, 4.8%, and 3.9% respectively. Another top-rated feature at OKX is that tokens can be swapped instantly and without an intermediary. For example, an investor holding Ethereum might wish to swap the tokens for Ape Coin to earn over 50% in interest. As a decentralized aggregator, investors are not required to provide any personal information or KYC documents. Instead, investors simply need to connect their wallet and choose which coins to earn interest on.

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10. Coinbase - Earn Interest on Nearly 120 Cryptos via a User-Friendly Exchange 

Coinbase - a user-friendly crypto exchange that is now listed on the NASDAQ, enables users to earn interest on over 120 cryptos. This includes the vast majority of the top 25 cryptos, so diversification can be achieved via one Coinbase account. For example, Ethereum, Cardano, and Solana are currently yielding 3.8%, 2%, and 2.4% respectively. Cosmos, Polkadot, and USD Coin are yielding 6.1%, 14.2%, and 1.5%.

Those looking to earn interest on crypto at even higher APYs will likely be interested in Decimal and DODO. These emerging tokens are currently yielding 109% and 58% respectively. The terms surrounding each interest agreement on Coinbase will vary depending on the token and blockchain network. Coinbase notes that minimum terms range from a few minutes to several weeks. As such, checking the finer details is crucial before proceeding.

There are no issues with safety when opting for Coinbase. In addition to being a public company, Coinbase was founded in 2012 and is now used by over 110 million clients. Many of which are based in the US. There are two options to start earning interest on Coinbase. First, investors can transfer their tokens from a private wallet into their Coinbase account. Alternatively, investors can buy their chosen token on Coinbase with a debit/credit card or bank wire.

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How Does Earning Interest on Crypto Work?

In this section, let's explore the most popular ways to earn interest on crypto. This will enable investors to choose the most suitable method for their goals and risk tolerance.

Savings Accounts

Crypto savings accounts work much like certificates of deposits (CDs). In a nutshell, the investor will deposit tokens into a crypto interest account and earn a yield. Savings accounts are usually offered by crypto exchanges, including Crypto.com, OKX, and Binance.

There are various terms associated with crypto savings accounts and this will impact the interest offered. For example, higher rates are usually offered on longer lock-up terms. While lower rates are offered on flexible accounts.

• When opting for a lock-up term (e.g. three months), the crypto tokens cannot be withdrawn until the respective maturity date.  This is why interest rates are higher.
• When opting for a flexible term, the crypto tokens can be withdrawn at any time. This is why lower interest rates are offered.

When depositing crypto tokens into a savings account, the platform will often use the funds for third-party loans. This enables the platform to pay interest to the investor. But do remember that people can default on loans, which means savings accounts are not free of risk.

Staking

One of the best ways to earn interest on crypto is via staking. The traditional method of staking consists of crypto tokens being deposited into a blockchain network. The network must use the proof-of-stake consensus mechanism. Examples include Ethereum and Cardano.

When the tokens are locked in the blockchain, they help keep the network safe. In turn, the blockchain will reward stakers for as long as the tokens are locked. This makes staking a less risky option than savings accounts.  However, this also means that interest rates are generally lower.

The best place to earn interest on crypto via staking is Crypto.com.

 You should consider whether you can afford to take the high risk of losing your money.

Yield Farming

Another option to consider when learning how to earn interest on Bitcoin is yield farming. This method will see investors lend tokens to a crypto exchange for liquidity purposes. Unlike savings accounts and staking, yield farming requires investors to lend two different tokens.

This is because yield farming provides liquidity for a tradable pair. Moreover, an equal amount of each token must be provided, in terms of the current market value.

Now, yield farming comes with both pros and cons. On the one hand, yield farming can generate significant returns. However, it is also fraught with risk. In particular, when the value of the two tokens diverts from one another, this can result in impermanent loss.

In simple terms, this means that the investor would have made more had they opted to leave the tokens in a private wallet. Hence, an opportunity cost has arisen.

Is Crypto Interest Worth it?

Crucially, this concept is not exclusive to cryptocurrencies. On the contrary, leaving money in a bank account also comes at a cost. After all, the money could be invested elsewhere to maximize long-term growth.

Maximizing Growth

To illustrate the benefits of earning interest on crypto, let's look at an example.

• First, let's say that an investor buys one Bitcoin when it was worth $10,000
• Three years later, Bitcoin is worth $30,000
• This means the investor has made capital gains of $20,000
• Now let's say that the investor deposited their one Bitcoin into a savings account from day one. The savings account paid an average annualized yield of 5%
• We'll say that over the course of three years, Bitcoin averaged a market value of $20,000
• This means in addition to $20,000 in capital gains, the investor made an additional $1,000 each year, or $3,000 in total.

As per the above, the investor made an additional 15% on their investment. In contrast, had the investor kept their one Bitcoin in a private wallet, they would have missed out on these additional gains. Hence, this is an opportunity cost.

Compounding Growth

Another benefit of earning interest on crypto is that it facilitates compound growth.

The benefits of compound growth should not be understated, as we highlight in the example below:

• Let's say a $10,000 investment is made in Ethereum
• The investor deposits the Ethereum tokens into a staking pool that pays 10% annually
• At the end of year one, the investor receives $1,000 in staking rewards. The investor reinvests the $1,000 back into the same staking pool.
• At the end of year two, the investor makes $1,100 in staking rewards. This is because they now have $11,000 deposited.
• This will continue each and every year, with the interest earned increasing after each reinvestment.

Now check out the chart below which further supports the above example.

By reinvesting the 10% rewards each year, the original $10,000 is worth almost $26,000 after a decade. Moreover, this doesn't take into account the value of the respective crypto token. Any price appreciation is in addition to the interest earned.

In contrast, by withdrawing the interest each year, the investment remains at $10,000. This is why electing to earn interest on crypto remains a smart investment strategy.

Consider the Risks 

Like all investment products, earning interest on crypto isn't without its risks. After all, the interest has to come from somewhere.

For example, we mentioned earlier that crypto savings accounts allow exchanges to offer loans to third parties. In other words, the exchange uses deposited crypto tokens and lends them to other people who pay interest. If a large number of defaults occur, the investor is at risk of losing some or even all of their cryptos.

In the case of yield farming, the overarching risk is impermanent loss. This happens when the value of the two tokens being deposited changes exponentially, resulting in an imbalance of liquidity. In turn, the investor can get back less than they originally invested.

Another risk to consider is that interest-earning products come with lock-up terms. During this period, the tokens cannot be withdrawn. This can be problematic if the token goes through a significant price increase which is short-lived. As the tokens were locked, the investor would have missed out on sizable gains.

How Much Interest Can You Earn on Cryptocurrency?

The amount of interest that can be earned on crypto will depend on many different factors. For example,  the best crypto interest rates are usually offered on small and emerging tokens. This is because the tokens are riskier than established cryptos, so platforms will pay higher rates.

At the other end of the scale, large-cap tokens with a trusted reputation will come with the lowest rates. For example, the best Bitcoin interest rate on Crypto.com is just 1.5%. And, to get this rate, the investor must:

• Agree to a three-month lock-up term
• Stake at least $40,000 worth of CRO tokens

Let's say the investor instead wants a flexible savings account on Bitcoin without staking CRO. This will reduce the interest rate to just 0.1%. Crucially, the amount of interest available is determined by the amount of risk undertaken. The more risk that investors are willing to take - the higher the interest rates.

Ultimately, investors will need to shop around to find the ideal crypto-interest product. An informed decision will need to be made based on the investor's financial objectives and tolerance for risk.

Crypto Interest vs Staking

The terms 'crypto interest' and 'staking' are often used interchangeably. However, they can refer to different outcomes.

For example, there are many different ways to earn crypto interest - and this includes staking alongside savings accounts and yield farming.

In some circles, crypto interest is exclusively associated with savings accounts. This is because the deposited tokens are lent to others via an exchange. And in turn, the investor is paid interest on the borrowed funds. However, just like staking, savings accounts generate interest in crypto tokens.

The key difference is in how the interest is generated. For instance, staking generates rewards via a proof-of-stake blockchain. This means that the rewards are derived from the blockchain itself, rather than a third party.

Another thing to remember is that both the best crypto interest accounts and staking can come with flexible or fixed terms. In the case of the latter, the tokens cannot be withdrawn until the term has passed.

Crypto Interest Fees

Whether or not crypto interest products attract fees will depend on the chosen platform.

Those looking to earn interest on crypto via yield farming will also need to consider fees. For example, the exchange will usually offer a 'share' of trading fees it collects on the pair the investor has provided liquidity for. However, this might only amount to a small percentage of the collected fees. Rarely will exchanges publish a full breakdown of their profit-sharing agreement on yield farming.

Do You Pay Tax on Crypto Interest?

The specific tax implications of crypto interest are complex. Oftentimes, tax authorities require investors to declare crypto interest amounts based on the value when received. Consider that some crypto interest platforms make daily or weekly payments.

This means that every time interest is received, the investor needs to log the value of the token within 24 hours. This figure will then be added to the investor's income for the year. This means that the interest can increase the investor's tax band.

Moreover, the tax will need to be paid even if the original investment is currently at a loss. This is because capital gains and losses are not realized until the crypto tokens are sold.

For further insight, check out our comprehensive guide on how to avoid crypto taxes.

Conclusion

Earning interest on crypto is a great way to maximize returns. Not only will investors generate passive income but they will still benefit if the crypto increases in value.

To start earning crypto interest today, check out Pepe Unchained ($PEPU). Through this new crypto platform, token holders can stake their holdings and generate a huge annual yield.

Pepe Unchained is built on the Ethereum L2 blockchain, which offers huge transaction speeds and charges low gas fees.

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Kane Pepi

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Kane Pepi

Editor

Kane Pepi is an accomplished financial and cryptocurrency writer who has an extensive portfolio of over 2,000 articles, guides, and market insights. With his expertise in specialized subjects such as asset valuation and analysis, portfolio management, and financial crime prevention, Kane has built a reputation for providing clear explanations of complex financial topics. He holds a Bachelor's Degree in Finance and a Master's Degree in Financial Crime, and is currently pursuing his Doctorate degree, which focuses on investigating the complexities of money laundering in the cryptocurrency and blockchain technology sectors. Kane's wealth of knowledge and experience in the field make…

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