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How to Earn Higher Interest on Savings

How to Earn Higher Interest on Savings 

When we were growing up, we were promised that if we saved money and earned interest, such sensible actions would look after us.

Well, the world didn’t hold up its side of that bargain. The days are gone when you could save money in the financial markets and get a decent rate of interest. Traditional savings accounts are useful for storing money for handy access while getting a tiny bit of interest, but that’s about all.

In fact, some countries in the world now have negative interest rates! For instance, Switzerland, Sweden, Denmark, Japan and the Euro area.

While this hits savers, it mysteriously doesn’t involve refunds to borrowers. Funny that. It’s almost like it wants to profit at any cost!

Alternative Savings Methods

You have to think clever and think outside the box these days. What’s needed is an alternative source of yields that aren’t held hostage by the Central Bank base rates.

Crypto interest accounts are one source of yield, and they exist because of the explosion of activity in what’s called the “Decentralised Finance” (DeFi) sector.

What are Crypto Yield Accounts and How Do They Work

Crypto yield accounts exist because companies borrowing money from regular crypto holders can demand a higher interest rate than in traditional finance for lending it to legitimate businesses (though probably not as high as traditional finance charges to credit card users – ouch!). 

Anyway, there’s enough profit in the lending process to be able to pay decent yield rates to Crypto holders who want to invest their cryptocurrency and/or stablecoins. So a range of companies have sprung up to do exactly this. And the crypto yield account is born!

Crypto Yield Accounts vs Traditional Savings Accounts

There are differences, of course, between crypto yield accounts and traditional ones. 

Apart from the interest rates, the main difference is in the regulation and safety of the account: traditional banking is far more regulated because all citizens are forced to use it, and traditional finance isn’t known for its restraint in exploiting captive markets.

Also, if you invest in cryptocurrency, the asset value can vary wildly day to day. If you invest in “stablecoins” (cryptocurrency that is pegged to a real-world asset value, such as the US Dollar), that doesn’t happen, though your investment could change against your country’s currency.

It’s probably best to think of a crypto yield account as more of an investment account: somewhere that you can put assets you don’t need. Traditional savings accounts are heavily regulated and Government-protected so that the majority of small savers have their money guaranteed by a Government agency such as FSCS (UK) or FDIC (USA). 

This means that traditional savings accounts are suitable for retail savers who have no interest in investing at all and are only using traditional savings accounts because it beats keeping cash under a mattress or in a series of socks.

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Crypto yield accounts do not enjoy that protection, so more research is needed into the small print, terms, and conditions and (if you can) trading history of the company offering the account. 

That’s probably worth doing if you want to take advantage of the higher interest rates offered by the platform.

Crypto Yield Accounts vs Crypto Wallets

Crypto Wallets used to be simple things, just acting as an easy way of receiving, sending and viewing cryptocurrencies. However, as happens in technology, the specification of wallets grew and grew until they resembled mini-exchanges, except with the keys to your stash stored on your local device.

The rule for most wallets is that if your funds are in one of them, then you have control of them. If your funds are invested with a crypto yield account provider, then you’ve lent out control for a while. Therefore you should do your due diligence on your chosen company!

It’s not quite so simple though: some wallets might move your funds off the local device if you do something in DeFi that requires someone else to have custody of the coins: such as lending them. So you can see that some wallets have drifted far from their original purpose.

When you’re talking about pure wallets, they don’t give interest on your holdings, and crypto yield accounts do.

Earn High Rates of Interest with AQRU

AQRU are one of the leading crypto yield account providers. They are especially newcomer-friendly and offer 1% unconditional APY on Bitcoin and Ethereum, and 7% on stablecoins.

To illustrate how much better that rate is than traditional savings accounts: with 7% you can double your money in just over 10 years. With 0.5%, it takes over 140. 

Traditional finance really has failed us, hasn’t it?

Other perks with an AQRU account are:

  • $10 joining bonus (USDC).
  • $100 (USDC) referral bonus
  • You can fund the account without deposit fees. 

First, you can send in crypto you bought elsewhere: AQRU will give you a wallet address. Beware of the transmission fees from the gates of hell! (with some exchanges that’s a chunky withdrawal fee).

Secondly, you can send in GBP and Euro by wire transfer. You can then purchase the crypto of your choice: Bitcoin, Ethereum or choose from a range of stablecoins.

You can also purchase crypto with your debit card through MoonPay (fees apply), which saves the hassle of sending in bank transfers.

So, to sum up: cryptocurrency yield accounts are a viable, high-rate alternative to traditional ones, and even allow you to earn interest on crypto, not just dollar-related stablecoins. They should really be regarded as an investment account, with all the caution that goes along with that: most people still need access to a comfortable amount of liquid funds for day-to-day spending, which means traditional savings or checking accounts.

It’s just a shame that the rates are so poor…

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