Bitcoin offers its users many advantages over fiat money and the traditional banking system (see: Why Buy Bitcoin?). But that doesn’t mean that there aren’t also parts of the legacy banking system which you might miss when you make the switch to BTC. Anybody old enough to have had a bank account prior to the 2008 financial crisis might have fond memories of something called ‘interest’ for example…

Although interest payments from regular bank accounts are now minimal or non-existent, it used to be very common for banks to pay an annual rate on deposits, to reward customers and share the profits generated from gambling your cash on the rigged casinos which are the modern financial markets.

Owning Bitcoin usually means that you retain full control of your wealth. You do not need to trust your wealth to a bank and just hope they will not lose it as so many did during the financial crisis (forcing us to ‘guarantee’ our own bank balances and replace our own losses through the tax system and inflationary money printing). But the flip side of this is that your wealth is idle – it is not being traded or lent out to earn a profit – so you do not earn interest on your bitcoins. Of course many BTC holders hope to realize a profit through an increasing value of the currency compared to their national government fiat money, but it would still be nice to earn interest on top of that wouldn’t it?

Fortunately there are ways to do it. As with everything, there are pros and cons to any of the options listed here. Trusting your coins to one of these services will generally involve a certain degree of risk – the same risk as you take when you make a deposit to a bank, which could lose your money through, for example, exposure to irresponsible sub-prime lending. You should take the time to research these services yourself, in order to understand and evaluate these risks properly.

Bankroll a Service is one of the longest running services in cryptocurrency. If memory serves, they were one of the first sites that I used when I first got into Bitcoin myself. It started life as a simple ‘faucet’ service, where users could claim free coins every hour and save up enough to withdraw as a way to learn about crypto without putting any money on the line. This faucet is still running, but since then they have expanded to include a lottery, Hi / Low provably fair betting, mining, and a savings account currently paying over 4% interest, distributed daily and with compounding, to everyone with a BTC balance on the site.

Earn Interest from Margin Trading Exchanges

Many exchange providers offer something called ‘leveraged trading’. This is when a trader seeks to increase their potential profit (or loss) by borrowing additional coins. Using a leverage of 10:1, for example, a trader would gain or lose 10% for every 1% change in the market. The exchange provider will keep the trader’s own coins as collateral for this loan, and automatically close the position when they get close to depleting their balance. Because of this collateral requirement, margin trading loans carry a very low risk of default – only something like a major flash crash in which the exchange’s automated systems cannot close the position in time can lead to the loan not being fully repaid. Because the loans are usually very short-term – often just a few days and sometimes less than 24 hours – lenders also enjoy a high rate of compounding. There is, however, usually some risk associated with holding your coins on an exchange, from which they could be stolen.

Poloniex – This is a popular altcoin exchange which offers leveraged trading and has a peer-to-peer market for users who want to provide liquidity to margin traders and earn daily interest as a result. You can set your own interest rate and loan duration, and because these are short term loans with daily interest you get excellent compounding of interest over the longer term. To get the best rate you need to  play an active role in managing your account, but if you don’t want to be logged in all day monitoring rates and tweaking your offers you can use their API to connect to a bot. One of the best features of Poloniex lending is that you can also earn interest on a wide range of altcoins.

Bitfinex – As one of the top Bitcoin exchanges, Bitfinex has a sizeable market for peer-to-peer margin trading loans which works in a very similar way to Poloniex. In addition to lending BTC, you can also earn a much higher interest rate on USD than you would get from any bank savings account!

CoinLend – This is a bot service which you can use to increase your returns from margin lending on Poloniex and Bitfinex for any currency supported on those sites by automating offer creation. Click the link to read my full review.

MagnrThis bitcoin savings account pays an initial 2.18% AER until 2016, followed by a variable interest rate tied to the profits generated by leveraged margin trading at BTC.SX. With a 100% reserve guarantee which is independently verifiable via the blockchain, and multi-sig security on all accounts, I would say that the risks associated with this savings account are not significantly higher than keeping coins in your own wallet. It is also quick and easy to set up and requires no maintenance – just like a regular savings account you just make a deposit and leave it there to grow.

Earn Interest from a Savings Account

Bsave is a Bitcoin savings account run by Coinbase, one of the world’s biggest and most trusted exchange and wallet providers. The rate is variable, currently around 2% as I write this. The funds are used to provide liquidity on the company’s own exchange.

Earn Interest from Bitcoin Mining

Bter – This exchange offers daily variable interest on deposits of bitcoin and a wide range of altcoins. If you opt-in you can also get a better rate on your BTC by allowing your coins to be used by Chinese mining company JUA to fund their operations. I feel I should make note of the fact that Bter has been hacked more than once in the past leading to the loss of customer funds.

HaoBTC –  Bitcoin mining is big business, especially in China where access to cheap wholesale electricity prices and a concentration of hardware manufacturers give local businesses an edge over their competition in other countries. Many Bitcoiners like to get involved in this business through cloud mining, but that can be fraught with risks and often leads to losses – enter HaoBTC, a major and well-established Chinese firm offering an online wallet with a range of fixed interest savings plans that generate revenue from the company’s mining operation. Rates range from 2% to 8.5% APR, depending on how much money you invest and for how long.

Interest Bearing Funds

BitBays is an exchange website which pays a small promotional interest rate on all balances held on their site, but if you want to earn a little bit more than that you can also put your funds in an arbitrage fund that they run, which at the time of writing offers a variable rate around 10-12% APR and the option to invest using either BTC or USD.

For Accredited Investors

Coinsetter offers accredited and institutional investors a way to earn interest on bitcoin deposits. You have to contact them for the full details.


Another way to earn interest on your bitcoins is to lend them out through peer-to-peer crowdlending websites. There are a few different sites that enable this but lease bear in mind that there is more risk to this than other options, which is why I’ve included this as a bonus rather than a full list item, but you can also get some great rates to compensate for this. My recommendation is to use BTCJam as they are one of the most well established services, have a good credit scoring system, and also offer additional features for investors like an ‘auto-invest’ function with different risk settings.

Sign up to BTCJam using the link in the paragraph above and you will get $20 free bonus when you’ve invested a total of $250 or more.