A major perk of owning Bitcoin is how effortless it can be to build wealth simply through earning interest on your investment. Although it can be easy to earn interest on Bitcoin, it’s important to keep a few things in mind when looking to make the most of your cryptocurrency.
However, before delving into the critical factors behind earning interest on Bitcoin, it’s good to discuss how Bitcoin owners are able to earn interest using their assets to begin with.
The Interest-Earning Potential Of Bitcoin
A crypto holder will deposit their Bitcoin in a crypto exchange platform account (such as Vauld). These platforms serve crypto enthusiasts by not only securing their assets but also building their customers’ wealth. Here’s how.
Earning interest using Bitcoin is similar to how someone might earn interest using fiat currency at a bank. You simply deposit your funds into an interest-bearing account, where it will increase by a calculated amount.
A notable difference is that interest is earned in the deposited crypto rather than in fiat currency. Compared to traditional banks, utilizing interest with Bitcoin also yields significantly higher earnings — especially depending on the interest selected.
Simple Vs. Compound Interest
If you’re looking to earn interest on Bitcoin, you will likely have the option between two potential types of interest: simple or compound.
Simple interest is an easy, straightforward way to build wealth using an initial Bitcoin investment. Although this interest is only earned from the initial deposit, it is still a great first step to any earning strategy.
Compound interest, on the other hand, is known for increasing funds at a faster rate than simple interest since the interest earned is based on both the initial investment and interest earned prior. Think of it this way: Compound interest is interest earned on interest.
You can choose from different intervals of time for compound interest to be deposited into your account. If the interval is shorter, then you will earn interest faster due to the immediate interest that compounds from the previously earned interest.
Ultimately, earning interest on Bitcoin does not require much work from the user beyond owning Bitcoin and making the initial investment. Still, there are several points to consider, both before the earning process begins and after the first deposit is made.
How To Earn Interest On Bitcoin
1) Choose The Best Platform To Earn Interest On Bitcoin
The first step to earning interest on Bitcoin is to have a set amount of the cryptoassets available for your investment. Check out this guide on earning Bitcoin to begin building your wealth if you’re on this step.
Bitcoin interest varies based on a few factors, but the one that truly makes a difference in your earnings is which crypto exchange platform you choose to partner with. Not all platforms offer the same rates, transparency, or level of protection as others.
Below are a few things to look for when determining which platform is the best option for you.
Interest Rates
Rates will change depending on your crypto’s value, but choosing the right platform will ensure that you receive the best rate possible for your bitcoin and all other cryptos.
An easy way to know that you’re receiving the best rate is by comparing the rates offered by a few different sites. At Vauld, we have an extensive list of options and offer some of the highest rates on Bitcoin compared to other crypto exchanges.
Protection
Since Bitcoin is not FDIC-insured, this causes some concern when it comes to lending. Will your assets be safe in the face of any threat or unpredictable event?
Protecting your Bitcoin means finding out whether your platform insures your assets. One such platform is Vauld.
Vauld makes sure all customers are covered by moving funds from the investor’s wallet to a centralized lending pool that’s insured for $100 million in BitGo for optimal safety.
Transparency
Not every platform will be open about who the founders are, where their funding comes from, or how they operate. These are important elements to look for when partnering with a platform before trusting them with your first deposit.
At Vauld, transparency is part of our commitment to you.
Hidden Fees
On the note of transparency, make sure your platform also does not have hidden fees. You can usually find this out through a bit of research and reviews from customers.
If you can’t find any reviews, the exchange is likely either very new or not legitimate. Either way, proceed with extreme caution. If something doesn’t feel right, it very well might not be.
Options For All
Earning interest on Bitcoin can be as simple as partnering with Vauld, creating an account, and depositing your token to earn a savings rate well above what a traditional bank will offer. For those interested in earning more, fixed deposit rates are an option.
While a savings rate is more flexible for withdrawing your assets whenever you need them, a fixed deposit is ideal for someone with some Bitcoin to spare that they wouldn’t miss for an extended period.
Since the assets are locked in, your platform should be giving you a higher rate for your fixed deposit. The difference between these two rates for any crypto should range somewhere between 2-3%.
Seamless Experience
Finally, it can never hurt to make sure you’re receiving a quality user experience while making money.
From regular upgrades to availability on Desktop, iOS, and Android, choosing a platform designed by a team of experienced tech professionals will make every aspect of the app seamless and stress-free, the way it should be.
2) Open An Account
Once the perfect platform has been selected, the next step to earn interest on Bitcoin is signing up and opening an account. While this is a relatively simple part of the process, there are some key things to keep in mind when getting started.
Determine How Much Bitcoin To Invest
Deciding on the amount of Bitcoin you want to invest before opening your account might help you determine if the platform is the right choice for you since some platforms will set maximum deposit limits on Bitcoin.
If you’re thinking about depositing a significant amount of your assets at any point, then it’s worth partnering with an exchange that doesn’t set deposit limits, like Vauld. We also never limit how much you can withdraw from your account.
Choose An Investment Strategy
Are you thinking about hodling, or are you interested in building your wealth long-term through crypto lending? Will you opt for a savings rate or choose a fixed deposit rate? These questions will ultimately answer how much you’ll be able to earn.
It’s important to familiarize yourself with how much you can afford to set aside in terms of your investment. If you prefer withdrawing your assets whenever it is most convenient for you, a fixed deposit will be a learning curve. Instead, a savings account might be the better choice.
Both are great options for the final step in earning interest on Bitcoin.
3) Earn Interest On Bitcoin And Stay Involved
Once you begin earning, it’s important to abide by a few best practices to make sure all continues to go well. The below tips will help you track any suspicious activity, learn more about your account, and get to know the community you’ve joined.
Monitor Your Account
Choosing the right platform means you can rest assured that your assets are safe, but regularly monitoring your account will add an extra measure of security to protect your Bitcoin in any scenario.
It’s worth noting that while many exchanges implement important safety precautions, not all of them are immediately available upon opening an account and must be enabled by the customer.
For example, does your platform have Multi-Factor Authentication (MFA) available? This service confirms that the person accessing your account is you through multiple passwords that often include a call or text sent to your designated number.
Using Google Authenticator, Vauld allows you to install the app and conveniently pair it with your Vauld account. If any critical action is conducted on the platform, the dynamically changing passcode will be required to prevent hackers.
Ask Questions
Every so often, you will have a question you can’t find the answer to, no matter how long you search for it. In these situations, the best exchange platforms will have a chat feature for all of your questions and concerns.
Even if your question is simply a means of seeking reassurance, we at Vauld are here to help. Our dedicated team of professionals is available to answer your questions when you have them and in a timely manner.
Get To Know The Community
When it comes to cryptocurrency, things are changing all the time. It can be difficult to constantly keep up with all the trends of the industry. Some platforms offer a community feature through their app to connect interested people looking to keep up on all things crypto.
With Vauld, our Crypto Circle can help users better understand best practices for their crypto, whether it is Bitcoin, Ethereum, or a number of other tokens that our platform accepts.
If your platform doesn’t offer a feature like Crypto Circle, there are plenty of forums to join for those wanting to stay with the trends. However, they won’t be as beneficial as a community directly within your platform.
Earn Interest And Build Wealth With Vauld
From the best rates to enhanced safety measures, it’s no wonder that the platform you partner with can have a major impact on your ability to earn interest on bitcoin.
With a wide selection of cryptocurrency, a seamless and easy-to-use interface, and total transparency across the board, Vauld is the most reliable way to build your wealth automatically through all of your crypto endeavors.
Plus, our team is always working on new ways to expand offerings across more markets, cryptocurrencies, and services in over 120 different countries and counting. In other words, Vauld users can always look forward to the newest innovations for their crypto needs.
Ready to get started? Sign in or register to start earning interest on Bitcoin with Vauld today.
