Interest rates for fiat currency savings accounts have dropped significantly and are now effectively zero. This means that deposit accounts as a form of investment are no longer viable. This is just one reason why investors are exploring various other options that may be better. The cryptocurrency market is one of the most popular of those options as it provides the means to earn passive income through interest when you deposit crypto like Ethereum.
Ethereum is currently the second-largest crypto in terms of market capitalization. For the last year, its growth in value has been tremendous — it has been even better than that of Bitcoin. This means that when you invest in Ethereum, you stand a better chance of gaining through value gains and interest.
One distinctive advantage that Ethereum holds over other cryptos (like Bitcoin) is utilizing smart contracts on its blockchain network. These contracts help handle your holdings autonomously as well assisting you to earn interest. Here are the top ways on how to make interest on Ethereum.
Opening a crypto savings account
There are two common ways to earn interest on Ethereum and using a crypto savings account is the most popular of them. You can earn an ETH interest rate of up to 6.5% annually from your Ethereum crypto deposit. A crypto savings account allows you to HODL crypto for a specific period from which you will be earning interest weekly or within a period of your choosing.
There are various exchange platforms or wallets you can open a crypto savings account with YouHodler being one of the best. YouHodler allows you to open crypto savings account for not just ETH but several other digital currencies. YouHodler offers an interest rate of up to 5.5%, which is compounded as well. Your assets are kept safe and can be accessed at any time.
Crypto staking has not been around for long, but still, it is a popular topic of discussion among many people. Staking allows investors to HODL a pool of crypto tokens from which you will be earning interest in the form of airdrops. It is one of the best options to earn Ethereum fast as rewards are issued weekly. There are several platforms from which you can earn Ethereum airdrops from including the ETH blockchain network.
You can earn free Ethereum coins when you stake Ethereum coins on the Ethereum blockchain. The interest rate earned can vary from 4% to as high as 10%. Staking is also being used to upgrade the Ethereum blockchain by enhancing the transaction throughput throughout the network.
Why open an Ethereum savings account?
Cryptocurrencies are very volatile, even the most popular ones like Ethereum. Having an asset that experiences price volatility is very risky as the ETH earning potential can be reduced in no time. To shield yourself from this risk, you can open a crypto savings account with platforms like YouHodler, which also adds interest on top of helping you mitigate risk. You can use the ETH interest earned to grow your portfolio quickly. However, bear in mind that while some wallets only store your crypto for you, YouHodler stores the crypto and adds interest on top.