How to Earn Interest on Binance Coin?
Binance Coin, referred to as BNB, has become one of the largest cryptocurrencies by market cap in recent times, outranking the likes of XRP and Litecoin. It is worthwhile to hold onto Binance Coin. But hodling isn't enough when you can multiply your Binance Coin holdings by earning interest on Binance coin. Follow these steps to interest as high as 8% APY on Binance Coin today:
- Sign up for an Interest Account
To begin earning interest on Binance Coin, you will need an interest account. You will have to provide your legal name and email address to sign up for a Binance Coin interest account. Go to the website of the interest account provider and provide your legal name and email address on their sign-up page. Then, click on signup.
- Verify Your Account
After you complete the signup process, you will receive an email from the interest account provider with a verification link. Click on the verification link, and your interest account will be created.
But to start earning interest on Binance Coin, you will need to go through a standard KYC process. To complete the KYC process, you will have to submit your personal details along with a government-issued ID card. You will also have to provide a photo of yourself holding the ID card.
It is important to point out that the above two steps are not a part of the account creation process at any of the DeFi interest account providers. So, you won't have to sign up for an account or go through a KYC process if you are opting for an interest account from the DeFi interest account provider.
- Deposit Your Binance Coin
Once your KYC is approved, you will have to deposit Binance Coin to your interest account to start earning interest on it. Login to your account and go to the page that displays the available deposit options. Click on the Binance Coin option to receive a unique wallet address.
Copy the unique wallet address and paste it to the withdrawal section of the wallet or exchange from where you are withdrawing Binance Coin to your interest account. Enter the amount of BNB you want to withdraw and click on the "Withdraw" button. Soon, you will receive BNB in your interest account
- Start Earning Interest
Once your interest account receives Binance Coin, the interest accruals will begin automatically. You will earn up to 8% interest on Binance Coin depending upon the interest account provider you choose.
Why Earn Interest on Binance Coin?
Earning interest on Binance Coin is far better than keeping it idle in a wallet. This way, you can multiply your BNB holdings and earn more. The interest you earn on Binance Coin is far more than what any traditional financial institutions pay on fiat currencies.
- Easy Process
The process of earning interest on Binance Coin is very easy and straightforward. It involves only a few steps: Sign up for an interest account, go through a KYC process, and deposit Binance Coin. That's it, and you will start earning interest on your Binance Coin holdings. The interest accruals will begin immediately after your interest account receives Binance Coin, depending on the platform you choose.
- Low Risk
There is an element of risk involved in earning interest on Binance Coin. But compared to the high return you earn on your BNB deposit, the risk is low. Other high-interest paying financial instruments are far riskier.
Interest account providers offer you a part of their earnings in the form of interest. They earn money by lending cryptocurrencies and fiat currencies to borrowers. So, there's a risk of borrowers defaulting on their loans. But the interest account providers manage the risk by making over-collateralization mandatory to borrow from them.
- Passive Income
It is best to earn money even while you are asleep. If you start earning interest on Binance Coin, you will earn money round the clock. So, deposit Binance Coin into your interest account and start earning passive income.
Where can I earn Interest on Binance Coin?
There are multiple options to start earning interest on Binance Coin. But the best of the lot is Nexo and YouHolder.
Nexo offers interest as high as 8% on Binance Coin. But to earn the highest interest offered by Nexo, there are a few criteria that you will have to meet. If 10% of your investment portfolio on Nexo consists of Nexo tokens, you will meet the first stipulated criteria to become eligible for earning 8% interest on Binance Coin.
You must also agree to earn interest in Nexo tokens. If you meet both of these criteria, you will earn 8% interest on your Binance Coin deposit. There are two types of accounts that Nexo offers. These are known as fixed accounts and flex accounts.
In a fixed account, you will have to keep your Binance Coin locked for one month or three months. Whereas in a flex account, there's no such lock-in period, and you are free to withdraw your funds at any time.
YouHodler is one of the leading crypto savings account providers. They offer interest up to 3% APY on Binance Coin. Unlike some of its peers, YouHodler mandates a minimum amount of BNB deposit to become eligible for earning interest on Binance Coin.
You must deposit a minimum of 50 BNB to your YouHodler interest account to start earning interest on it. You are free to withdraw your funds at any time, and YouHodler does not charge any fees on withdrawals.
Is it Risky Earning Interest on Binance Coin?
There's no doubt that earning interest on Binance Coin is one of the best ways to multiply your Binance Coin holdings. But it's not entirely risk-free. There's an element of risk involved, and you must know about it before you start earning interest on Binance Coin.
The interest that you earn on Binance Coin comes from the income of a crypto lending platform that they earn by lending cryptocurrencies and fiat currencies to borrowers. A majority of these platforms indeed require borrowers to provide collateral that is more than the amount they are borrowing. But there are a few platforms that don't require over-collateralization to borrow from them.
If you are opening an interest account with a platform that offers the highest interest but does not require over-collateralization to borrow from them, your Binance Coin deposit may be at risk. You can lose your Binance Coin if the borrowers of the platform start defaulting on their loans.
In the face of an increasing number of loan defaults, the platform can even go bankrupt. If that happens, you will lose your deposits, along with any interest income that you were to receive from them.
It's true that a majority of interest account providers now have insured their user funds. But the insurance amount is usually in millions of dollars. If the losses that a platform is facing are in billions, the insurance won't be enough to cover the entire loss.
If you want to safeguard your Binance Coin deposit, you must choose a platform that has been in the industry for some time. Don't opt for the highest interest providers. You must always check if the platform is credible or not. Our honest reviews on almost every interest account provider can help you in your decision.
What to Look for When Choosing a Platform?
While choosing a platform to earn interest on Binance Coin, you must factor in some crucial criteria. The two most important ones are the interest rate that the platform offers and their industry standing.
Some platforms offer higher interest rates as they are new to the industry. But you must understand that it will also involve a higher degree of risk. Thus, it is better to choose a platform that has been in the industry for a year or more and also offers comparatively better interest rates. Use our Binance Coin interest calculator to calculate the amount that you will earn on your Binance Coin.
Check if the interest account provider has insured its user funds or not. It is important as if the platform goes bankrupt or loses a majority of funds due to any reason, the insurance provider will refund at least a part of the user funds. Interest account providers like YouHodler, Nexo, among others, have insured their user funds for millions of dollars.
Before you make your final decision, you must also research the criteria that each interest account provider has to become eligible for the highest interest rates offered by them. Some platforms require their interest account holders to hold a specific percentage of their investment portfolio in the native token of the platform to earn the highest interest offered by them.
Some platforms offer the highest interest to users who agree to receive interest in the platform's native tokens. Platforms like Nexo mandate that their interest account holders must meet both of these criteria to become eligible for the highest interest rates.
You must also check if the platform has any mandatory lock-in period to become eligible to earn interest. If you will require your funds back within the stipulated lock-in period, opt for an interest account that does not have a mandatory lock-in period.