How To Earn Interest On Ethereum (ETH)
The information provided on this page is for educational purposes only and is not intended as investment advice. We may receive compensation from our partners if you visit their website. Read our disclaimer to learn how we make money.
The rise of Decentralized Finance (DeFi) has shown how popular it can be to earn interest in popular cryptocurrencies such as Ethereum. With Ethereum prices trading mostly sideways since the beginning of the year, earning interest on Ethereum through borrowing and lending platforms can provide a passive income stream. This guide will review our picks for the best Ethereum interest accounts and provide a step-by-step tutorial on how to earn interest on ETH.
Best Platforms To Earn Interest On Ethereum In 2023
Based on our research, these are the best places to earn interest on Ethereum:
- Nexo (overall best platform to earn Ethereum interest)
- Binance (provides multiple ways to earn Ethereum interest)
- Crypto.com (offers multiple ways to earn ETH)
Comparing Ethereum Interest Rates
Different crypto lending and savings platforms have varying rates of interest and distinctive features that can influence which are the best places for earning interest. The table below provides a summary of the best interest rates for Ethereum among the top providers at the time of writing.
|Platform||ETH Interest Rate||Requirements||Best For|
|Nexo||Up to 8% APY||Must stake NEXO for higher interest rates||Highest Ethereum yields|
|Binance||0.1% ~ 2.4% APY||None||Flexible interest account|
|Crypto.com||Up to 6% APY||Must stake CRO to acquire higher interest rates||Earn interest with simple app|
How To Earn Interest On Ethereum - Quick Guide
To begin earning interest on Ethereum, follow these simple steps.
- Compare and select an ETH interest platform
- Create an account and complete verification
- Deposit or purchase Ethereum
- Begin earning interest on Ether
Where To Earn Interest On Ethereum: 2023 Reviews
Once an investor has decided to use the Ethereum they hold to generate passive income, they have to find a cryptocurrency exchange or lending provider that offers the most benefit. Narrowing down a platform is not an easy task as are multiple factors to consider. The most important aspects are the Annual Percentage Yields (APY) and minimum lock-in periods. That is, how long the individual must keep their Ethereum locked in to make maximum gains.
Moreover, the security of the interest platform is paramount. Keeping these points in mind, here is the list of best platforms to earn interest on Ethereum based on our comparisons.
1. Nexo - Overall Best Platform To Earn ETH Interest
Nexo is a crypto trading platform that offers users lending and interest-generating opportunities. Launched in 2018, Nexo has been one of the most trusted and secure borrowing and crypto lending websites for investors. Individuals can fund an Ethereum interest-earning account with crypto or cash such as USD, GBP, AUD, EUR or 36 other currencies. Currently, the platform has over $12 billion in assets under management and serves more than $4 million users worldwide.
Since its launch, Nexo has made many design changes to make the experience easier and more intuitive for the user. Thus, everything from account creation to lending, borrowing, staking and storing is a straightforward procedure. The platform also has a secure Ethereum wallet that investors can use to exchange and transfer their crypto assets.
Ethereum investors don't have to go through more than a couple of steps to start earning interest on Ethereum. They only need to add Ethereum to their account, making them eligible to earn interest for their Ethereum holdings. Users can earn up to 8% interest APY on Ethereum, the same interest rate offered for Bitcoin interest accounts. This is one of the highest Ethereum interest rates compared to other platforms. Moreover, the ETH interest is paid out daily for compounding and there are no hidden fees or commissions.
That said, to earn the 8% APY rate, users must be part of Nexo's Platinum Tier. It means that 10% of investors' total holdings on the Nexo platform should be NEXO tokens – the governance token of the platform. The base interest rate for ETH is 6% APY. While this will not appeal to everyone, the plus side is that investor ETH holdings are insured. That is, NEXO has a $375 million insurance policy on custodial assets by BitGo.
A value add provided for Ethereum investors is the Nexo card. It is a crypto spending card that allows users to deposit collateral on the card and take out a line of credit. When a user spends on the card, they are borrowing more from their Nexo credit line. Repayment is made directly to the Nexo credit line, and not to the card itself. The benefit is a 2% cash back upon paying the vendors using this card. For instance, cardholders can spend Ethereum at thousands of VISA merchants worldwide.
It should be noted the Ethereum interest platform with Nexo is not available for US investors due to strict regulations. For users in supported regions, Nexo is our top option for earning interest on Ethereum.
- Simple and intuitive platform that is suited for beginners
- ETH covered under a $375 million insurance policy for custodial assets
- Compounding daily interest payouts for Ethereum deposits
- High interest rates compared to its competitors
- Provides support for business accounts
- No hidden fees of credit score check
- Must hold NEXO to obtain the best interest rate
- Interest Accounts are not available to US investors
- Only supports EUR and GBP fiat currencies
3. Crypto.com (offers multiple ways to earn ETH)
Crypto.com has grown into one of the leading crypto apps in the world. With more than 50 million users worldwide – largely due to its savvy marketing campaigns such as onboarding Matt Damon as the ambassador to sponsoring the FIFA world cup 2022. Marketing strategies aside, it is a good crypto platform for newcomers who're trying to find their way trying to navigate the complexities of the crypto space. Crypto.com has its own DeFi Wallet, an NFT marketplace, a crypto exchange, and a VISA debit card that allows users to use cryptocurrency to pay retailers. With all these features packed into one platform, Crypto.com is undoubtedly one of the best apps for beginners and experienced investors.
One of the standout features of this platform is the Crypto Earn which enables its customers to grow a crypto portfolio through interest accounts or staking up to 14.5% APY. It offers investors opportunities to earn interest in Ethereum and other cryptocurrencies. Crypto.com offers a 5.20% APY interest rate on Ethereum. However, in order to attain this interest rate, investors must stake at least $40,000 worth of CRO and lock their Ethereum for three months.
To earn the 6% interest on Ethereum, users must hold at least $100 worth of Ethereum for three months and stake $40,000 worth of CRO. The conditions to be eligible for the highest Ethereum interest rate will be out of reach for many investors and potentially offset any gains if the token value of CRO declines.
The minimum interest rate anyone can earn on the platform by locking their Ethereum is 0.25%. The rewards are paid on a weekly basis, which is less than Nexo which is daily. The interest is paid out in the same currency depositing. Therefore, Ethereum interest accounts will accrue Ether which is distributed to the user's Ethereum wallet.
Compared to our recommended places to earn Ethereum in this article, the Crypto.com App is by far the easiest and most convenient way to earn interest on Ether with competitive rates for CRO holders.
- Supports more than 250 cryptocurrencies
- Offers up to 6% interest on Ethereum
- Provides an easy-to-use mobile app
- Requires staking a large number of CROs to earn worthwhile interest
- Debit and credit card fees are high
Top Ethereum Interests Platform Compared
Here is a comparison table of the top places to earn interest on ETH using trusted and reliable platforms. For more information, read our dedicated reviews on each provider.
|Exchange||Crypto Assets||Trading Fees||Rating||Promotion||Website||Review|
|Get $25 in Bitcoin when you top-up or buy >$100||Visit Nexo||Nexo Review|
|Up to $100 welcome bonus||Visit Binance Earn||Binance Earn Review|
|None available at this time||Visit Crypto.com||Crypto.com Review|
Should You Earn Interest On Ethereum?
Newcomers who are not fully committed to trading the volatile crypto market will find earning interest in Ethereum to be a better alternative. It is a passive way to generate additional income and provides a fixed or flexible rate depending on the provider. Moreover, storing Ethereum and earning interest is a better yield option compared to most banks, which at most offer 1% interest.
With interest rates on Ethereum ranging between 2.40% and 8%, depositing a portion of ETH holdings to a savings account could be a profitable long-term strategy. This does depend on the price valuation of Ether not depreciating more than the interest rate over 12 month period.
Is Earning Interest On Ethereum Worth It?
Earning interest on Ethereum might not be that flashy as compared to the gains to be made interacting with the volatile market directly, but it has several benefits. Following is the list of advantages that makes earning interest on Ethereum worth it:
- Reduced Risks: Locking Ethereum inside a vault and earning regular interest is akin to storing the cash in the bank. In Ethereum's case, however, the returns are compounded daily, and the payouts can happen monthly and weekly. Those who're not ready to interact with the crypto market full time must take advantage of this less-risk and massive option.
- Attractive Interest Rates: Crypto trading platforms provide attractive interest rates up to 8% APY, especially when the stored tokens are few in number. It is an interesting way to earn Ethereum for those who are economical about their investments.
- Low Fees: Withdrawal and deposit fees for the listed platforms are either cheap or non-existent. Withdrawing and depositing are easier and can be easily done via a wallet.
Trade vs Earn Interest on Ethereum
Trading and earning interest are two different ways to make money from Ethereum. The latter is a slower option and consists of regular payouts at regular intervals. The former option – trading – is for those who're willing to deal with the volatility of the crypto market.
That being said, veteran investors also find holding Ethereum to be far more valuable than trading them right away. When it comes to Ethereum Price Predictions, experts have said that it can go as high as $13k by the end of 2022.
Since cryptocurrency platforms' policy often changes with the market trends, the compounding interest rate may also increase. It is one aspect that would benefit both the traders and holders of Ethereum.
Earning Interest On Ethereum – Full Guide
1. Compare and select an Ethereum interest account
The first step to earning compound interest on Ethereum is to compare and choose a crypto interest platform to use. For the purpose of this tutorial, we will use Nexo which is our top-rated savings account for ETH based on our comparisons.
2. Create an account and complete verification
Visit the Nexo website and create an account. This is a simple step and can be done by filling out a few columns with details such as name, email ID, and creating a password. Once the details are verified by email, the signup process is completed. There is a mandatory ID verification process called Know-Your-Customer (KYC) before using the earn features on Nexo. To complete this process, basic personal information and a Government-issued ID will need to be provided.
3. Deposit or purchase Ethereum
After the user has provided the verification details and Nexo has approved them, the interest account is verified. Investors can now either buy Ethereum on the platform using the fiat method or copy their ETH address to transfer funds to their Nexo account. The fees to purchase ETH directly on Nexo are a little high. For a list of the cheapest places to buy Ethereum, read this article.
4. Begin earning interest on Ethereum
Once the ETH is on the Nexo account, it will start accruing interest. There is no trading to be done, and any further interactions are required. All the user now must do is wait and let their Nexo account generate passive income for them. The amount of interest earned can be monitored directly on the Nexo platform or mobile app.
Frequently Asked Questions
While there are many crypto interest platforms that offer a way for investors to earn interest on Ethereum, the best places are Nexo, Binance, BlockFi, Crypto.com and Celsius. These providers are reputable, offer competitive interest rates and have high-security standards in place. Investors must first understand the offerings that these platforms provide before making a decision.
Nexo pays the highest interest on Ethereum at the time of writing. While the standard interest rate is 6% APY, holders of Nexo's native token, NEXO, can increase the interest by 2% to 8% per annum.
Yes, holding Ethereum can pay interest between 2.4% and 6% per annum with select crypto platforms. One of the highest interest rates for ETH is 8% per year with Nexo. The interest accrued is paid out daily and compounded with the initial deposit.
Yes, the interest generated by holding Ethereum in an interest-earning account will be considered income by most Government authorities and therefore trigger a capital gains event. This means that the interest earned (not the principal) may be subject to Capital Gains Tax (CGT).
To sum up, this article covers the best platform to earn interest on Ethereum. It is recommended that users first assess their expertise and risk-taking proclivities before investing. Even though earning interest on Ethereum is a safer option to earn passive income, it is not without its risks.
The volatility of the crypto market makes it necessary for investors to take each step after carefully weighing all the pros and cons. Another factor to be mindful of is the crypto interest platforms. Not every trading portal is designed the same and provides different interest rates. It would be wise for the investors to assess each platform carefully before choosing.