How to Earn Interest on Tether?
Tether, popularly referred to by its symbol - USDT is a stablecoin. Many crypto traders, both novice and advanced, know Tether and hold them to trade cryptocurrencies like Bitcoin, Ethereum, and more. In fact, many crypto users hold on to USDT as its value is pegged to the US dollar. Hence, Tether offers users a way to avoid the infamous extreme volatility associated with cryptocurrencies.
But holding isn't enough as there's a better way to multiply your Tether holdings. You can deposit Tether to earn interest on it. For example, you can earn up to 12.3% interest on your Tether holdings with CoinLoan, which is far more than what traditional financial institutions like banks offer on fiat currencies like USD. Follow these steps to start earning interest on Tether:
- Sign up for an Interest Account
The first thing that you will need to start earning interest on Tether is an interest account. For that, you will have to provide your email ID and legal name on the signup page on the website of a Tether interest account provider.
- Verify Your Account
Once you have submitted your email ID and legal name and completed the signup process, you will receive a verification email from the interest account provider. Click on the verification link that is provided in the email. Once you click on the link, your interest account will be created.
But to activate your interest account, you will have to go through a KYC process. To complete the KYC process, log in to your interest account and submit your details, including a government-issued ID card. You will also have to add a photograph of yourself holding the ID card.
The above two steps are a part of signing up for an interest account with a centralized interest account provider. There won't be any signing up and KYC process if you are opting for a DeFi interest account provider.
- Deposit Your Tether
After your KYC verification is complete and your account is approved, you can deposit Tether to your interest account to start earning interest. To deposit Tether, go to the page that has a list of all the available deposit options. Click on Tether, and depending on the available options, you will see ERC20, EOS, and TRC20 mentioned there.
If you want to send USDT ERC20, click on the ERC20 to receive a USDT ERC20 unique wallet address. Click on the EOS and TRC20 options if you are planning to send USDT EOS or USDT TRC20. Copy the unique Tether wallet address and paste it to the wallet’s withdrawal section from where you are withdrawing Tether to your interest account.
Now, you must enter the amount of Tether that you want to transfer to your interest account and click on withdraw button. Soon, you will see the Tether balance in your interest account.
- Start Earning Interest
The interest accrual will begin almost immediately after your interest account receives Tether. The interest rate that you will earn on your Tether deposit will depend upon the platform you will choose.
Why Earn Interest on Tether?
Earning interest on Tether is the best way to multiply your Tether holdings. It is also the least risky way to earn more on your idle Tether holdings. Earning interest on Tether is also far better than keeping it idle in your wallet. Some of the interest rates available are almost unheard of in the traditional financial world.
- Easy Process
You only need to go through a simple signup & KYC process to create an interest account. Once your interest account is approved, you can transfer your Tether holdings to your interest account. Once your interest account receives Tether, interest accruals will begin almost immediately.
If you create an interest account with a DeFi interest account provider, the process becomes even easier. You won't have to sign up for an interest account and nor would you have to submit any personal details or provide a government-issued ID card if you are opting for a DeFi interest account provider.
- Low Risk
Unlike other highly-risky options of earning high interest, earning interest on Tether is a comparatively safer option. The interest account providers lend cryptocurrencies and fiat currencies to borrowers at high interest rates and distribute a part of their earnings to their interest account holders as interest. A majority of interest account providers require over-collateralization from borrowers to manage the risk.
- Passive Income
Earning interest on your Tether deposit offers is the best way to generate passive income. You can even earn while you are asleep by depositing Tether to your interest account.
Where can I earn Interest on Tether?
There are a variety of interest account providers for you to choose from and start earning interest on Tether. The best options among them are Celsius, Nexo, and YouHodler.
Your interest income will depend upon the individual criteria that these interest account providers follow to decide if a user is eligible for the highest rates of interest or not. To calculate your interest income on Tether deposits, you can also use our calculator.
You can earn interest up to 10.63% APY if you deposit Tether to your interest account on Celsius Network. Celsius does not mandate any minimum balance to start earning interest on your Tether deposit. But to earn the highest rate of interest on Celsius, you must select to earn in CEL tokens, which are Celsius Network's native token.
But if you are from the United States, you won't be able to earn the highest interest rates offered by Celsius as they do not provide an option to earn interest in CEL tokens in the United States. As for accessing your funds while it is in your interest account, Celsius Network does not restrict its users from accessing them. You are free to access your funds anytime you want.
Nexo offers interest up to 12% on USDT, but for that 10% of your investment portfolio must consist of Nexo tokens, and you must also select to be paid in Nexo tokens. The interest accruals begin within 24 hours after you deposit USDT to your Nexo interest account.
The number of free monthly withdrawals available to you will depend on your loyalty tier, which again depends on the percentage of Nexo tokens in your investment portfolio. If 10% of your investment portfolio consists of Nexo tokens, you will have three free monthly withdrawals. In case it is less than 5%, you will have no free monthly withdrawals.
YouHodler offers interest up to 12.3% on Tether deposits, and you can receive payout weekly from them. As for depositing and withdrawing Tether go, it is available round the clock. Your interest income automatically gets deposited to your interest account at the end of the week without any kind of deductions.
Is it Risky Earning Interest on Tether?
Earning interest on Tether from crypto lending platforms is far better than keeping your Tether idle in your wallet. There's no doubt about that. The interest that you will earn on Tether is also far more than what banks and other financial institutions will offer on USD deposits. But there's an element of risk involved in earning interest on Tether.
The first thing that you should know is that the interest that crypto lending platforms offer to their interest account holders comes from the lending part of their business. These platforms lend cryptocurrencies and fiat currencies to borrowers at a high interest rate, and they share a part of their earnings as interest with their interest account holders.
Most of the crypto lending platforms require over-collateralization from borrowers to obtain loans from them. Yet, there are a few that do not require over-collateralization to obtain loans from them. In case you opt for an interest account with such platforms, you may lose your Tether deposit if their borrowers start defaulting on loans.
If the loan default number is large, the platform will go bankrupt, which will result in you losing your funds. Many interest account providers have insured their user funds but if the losses amount to billions of dollars, insurance of some millions of dollars won't be able to cover the entire loss.
To keep your Tether holdings safe, do your research well and only opt for an interest account provider that has a good standing in the industry. Instead of relying only on the highest interest rates, go for the mix of reputation and interest rate to select the best Tether interest account providers.
You can also go through our honest reviews on almost every major interest account provider to select the best one among them and start earning interest on Tether.
What to Look for When Choosing a Platform?
There are a few important things that you must consider while choosing a platform to earn interest on Tether. The two most crucial factors are the interest rate offered and the duration for which the platform has been active in the industry.
Do not fall for the highest interest rates, as it can turn out to be risky. The interest account provider should be credible. Select a platform that offers reasonably higher interest rates and has been in the industry for a few years.
Check for the insurance amount that an interest provider has for their user funds. There are many platforms like YouHodler and Nexo that have insured their user funds for millions of dollars. If a platform has insurance cover for their funds, their insurance provider will at least refund a part of the lost user funds if there's a failure on the platform's part or if they go bankrupt.
Also, check for the criteria that an interest account provider has to select who is eligible for the highest interest rate and who is not. Some platforms make it mandatory to hold a part of their investment portfolio in the platform's native token to earn the highest interest rates.
A few platforms also mandate receiving a payout in the platform's native token to become eligible for the highest interest rate. Some platforms also require their interest account holders to follow both of these criteria to earn the highest interest offered by them.
You must also check if an interest account provider has any mandatory minimum lock-in period to earn interest on Tether. If they do, you won't be able to withdraw Tether until the duration of the lock-in period expires.