Binance USD Interest Rates: Compare Best BUSD APY
Earn interest on Binance USD up to 18.05% APY. Compare rates and features on 8 platforms.
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How to Earn Interest on Binance USD?
Binance USD or BUSD is one of the popular stablecoins in the crypto market today. It does not suffer from the infamous volatility of other cryptocurrencies as it is pegged to the US dollar. Many hold onto Binance USD to trade with other cryptocurrencies and for making payments.
If you are one of the Binance USD hodlers and want to earn more, there is a better way to maximize your profits. You can earn interest as high as 20% APY on your BUSD holdings. Follow the steps below to start earning interest on Binance USD:
- Sign up for an Interest Account
You will need an interest account to begin earning interest on BUSD. You will have to provide your legal name and email address for an interest account.
- Verify Your Account
After signing up for an account, you will receive an email from the interest account provider with a verification link. Click on the verification link to verify your email address. Now, it's time to activate your interest account.
To activate your interest account, you will have to go through a standard KYC process. Provide your personal details and a government-issued identity card to verify the details you submit. Another thing that you will need here is a photograph of yourself holding the ID card.
There won't be any signup and KYC process when it comes to a DeFi interest account. You will only need a wallet and enough Binance USD to begin earning interest on a DeFi platform.
- Deposit Your Binance USD
Within a few days or hours, your KYC is approved. Now it's time for you to deposit Binance USD. Go to the page that shows you all the deposit options available. You will see Binance USD or BUSD mentioned there. Click on Binance USD, and you will see a unique wallet address.
Copy the unique wallet address that you receive. Paste it in the withdrawal section of the wallet where you hold your Binance USD funds. Enter the amount of Binance USD that you wish to deposit to your interest account and click on withdraw. Soon, you will receive Binance USD in your interest account.
- Start Earning Interest
Once you receive Binance USD in your interest account, the interest accruals will begin automatically within the period stipulated by the interest account provider. Depending upon the platform you choose, you will start earning interest on your deposit within 24 hours.
Why Earn Interest on Binance USD?
Earning interest on Binance USD is better than holding it in your wallet or exchange. This way, you can multiply your BUSD holdings. Many platforms pay interest daily, so you can even opt for short-term deposits and earn more on your Binance USD.
You can earn interest as high as 20% on your BUSD deposits, which is far more than what banks offer on USD deposits. Thus, earning interest on Binance is one of the best ways to increase your income while hodling.
- Easy Process
The process to earn interest on Binance USD is very easy. All you need to do is sign up for an interest account, complete the KYC process, and deposit your Binance USD to your interest account. The interest accrual will begin automatically. That's how easy it is to start earning interest on Binance USD.
- Low Risk
If we compare the risks in earning interest on Binance USD with other interest-bearing instruments offering similar interest rates, you will find that earning interest on BUSD is less risky. Interest account providers share a part of their income in the form of interest to their interest account holders. These platforms earn by lending cryptocurrencies and fiat currencies to borrowers. A majority of crypto lending platforms make over-collateralization mandatory to manage the risks.
- Passive Income
With a Binance USD interest account, you will earn money even while you are asleep. Deposit BUSD to your interest account and see your income grow.
Where can I earn Interest on Binance USD?
There are many interest account providers that you can choose from to earn interest on Binance USD. But the best ones are Celsius Network, BlockFi, and Aave.
You can earn up to 8.58% on your Binance USD deposits on Celsius Network. But to earn the highest advertised interest rate, you must agree to receive interest payout in Celsius Network's native token, known as CEL. If you decide to earn interest in BUSD, you will receive 6.86% interest on Dai.
Your location also matters as the interest rate differs for international users and residents from the United States. The users from the United States aren't eligible to earn interest in Celsius Network's native token. Thus, they cannot earn the highest interest rates advertised by Celsius Network.
BlockFi has established itself as one of the leading interest account providers in the crypto space today. You can earn interest up to 7.25% on your Binance USD deposits on BlockFi. There is no minimum when it comes to depositing BUSD on BlockFi and earning interest on it. Users from most countries and all states other than New York can sign up for an interest account on BlockFi.
Is it Risky Earning Interest on Binance USD?
Earning interest on Binance USD is an attractive way to multiply your BUSD deposits. But it is important to point out that it is not risk-free. There is an element of risk involved in it. The interest that you earn on your Binance USD deposits comes from the income of crypto lending platforms. They earn income by lending cryptocurrencies and fiat currencies to borrowers.
Most of the crypto lending platforms manage the risks by making over-collateralization mandatory. But some platforms do not require over-collateralization. If you open an interest account with such crypto lending platforms, the risk involved will be higher. If borrowers start defaulting on loans, the platforms won't be able to pay interest. It can result in a situation where the platform won't be able to refund the user funds.
If loan default numbers are large enough, the platform can go bankrupt. If that happens, you can lose your funds, along with any interest income that you were going to receive from the crypto lending platform. Are you wondering that the insurance company will refund your entire deposit? That can be true if the losses are within the limit of the insured amount.
In most cases, the insurance amount is usually in millions of dollars. If the user funds lost are more than the amount insured, the insured amount will only cover a part of lost funds. To ensure that your Binance USD remains safe while you are earning interest on it, you must research a platform that offers better interest rates and has also built a good reputation in the industry.
What to Look for When Choosing a Platform?
Take a few crucial factors into consideration while choosing a platform to earn interest on Binance USD. Both the interest rates offered and the duration since the platform has been active in the industry are crucial factors here.
Don't fall for the highest interest rates alone, as if a platform is new, it will offer the highest interest rates. But the risk involved will also be comparatively higher. Choose a platform that has been in the industry for some time now and offers a comparatively better interest rate.
Before choosing a platform, check if the crypto lending platform requires over-collateralization or not. The platforms that don't require over-collateralization have a higher risk of going bankrupt due to loan defaults. They may offer higher interest rates, but again the risk involved is also higher.
It is also crucial to check if a platform has insured user funds or not. If the platform goes bankrupt or loses user funds for some reason, the insurance company will refund at least a part of the user funds. Also, check the amount for which the platform has insured its user funds.
If you want to earn the highest interest rates advertised, then you must look into the eligibility criteria that each platform has to earn the highest interest rates. Some platforms require interest account holders to receive interest in their native tokens to become eligible for the highest interest rates they offer. Some platforms also make it mandatory to hold a specific percentage of the investment portfolio in their native token to earn the highest interest rates advertised by them.
Many platforms also have a mandatory lock-in period for earning interest. So, if you will need the funds back within the stipulated lock-in period, opt for an account or platform that does not have a mandatory lock-in period.