An increasing number of people choose to invest in cryptocurrencies, but not everyone appreciates their volatility. Earning interest on your cryptocurrency is a popular alternative, as you can stabilize that volatility. If the market for that coin does well, you will have grown your profits. If it does poorly, you will have mitigated your losses and maybe even gained despite the drop in the crypto’s value.
But how can you earn interest on crypto?
There are a growing number of platforms that let you earn interest on cryptocurrencies, but some take this a step further and offer compound interest.
How Can You Earn Compound Interest on Crypto?
Earning compound interest with cryptocurrency is as straightforward as finding a platform that lets you deposit your Bitcoin or another currency and earn compound interest on it. However, that is much easier said than done. While a growing number of platforms offer interest, even that option is still relatively rare, with compound interest being rarer.
Haru is one of the best ways to earn compound interest, and you can even choose from two types of compound interest accounts, either Haru Earn or Haru Earn Plus.
Get cashback for every lockup
Receive unlimited 2% cashback for limited time only.
Get cashback for every lockup
Receive unlimited 2% cashback for limited time only.
How Compound Interest Accounts Work
To understand how compound interest accounts work, you need to understand what compound interest means. With compound interest, the interest that has previously been applied gets added to the principal and future interest applies to it.
The formula for compound interest is as follows:
Total Amount = Principal x (1 + (Annual Interest Rate)/(Number of Times Interest Compounds in the Year)) ^ (Number of Times Interest Compounds in the Year x Total Number of Years)
The amount earned on interest went up slightly on the second day, as you had a higher starting balance. This would continue every single day, with you always earning more interest as your principal grows.
Importantly, the more frequently that your interest compounds, the more you will earn. For example, all else being equal, you would earn more interest in an account that compounds daily compared to one that compounds monthly.
This applies whether you earn interest on BTC or on any other cryptocurrency. Keep in mind that many accounts offering compound interest on crypto have lockups, but there are some exceptions.
Where to Earn Interest on Cryptocurrency
Based on the above math, it is clear that you want to earn interest on ETH with compound interest accounts instead of those with normal interest. You will gain slightly more in profits each time the interest compounds. Depending on how long you have the account for, the extra interest earned can add up significantly.
Of the various options that let you earn interest on crypto, Haru stands out from the crowd. You can earn interest on USDT, Terra KRT, Bitcoin, or Ethereum. There is also the option of multiple account types and daily compounding interest. There are also no fees involved.
Haru Earn Plus
If you want to increase the interest rate even more and do not plan on using your crypto for a while, you can opt for Haru Earn Plus and lock up your crypto. Lock up your crypto of choice for anywhere from 15 to 365 days, with the interest rate increasing the longer your lockup period is.
Like Haru Earn, Haru Earn Plus accounts compound interest daily, resulting in your earnings increasing every single day. The interest rates are usually between 8% and 16%, so you can easily balance your ideal lockup period with your ideal interest rate. This is a very good option for those who want to earn interest on ETH that they do not plan on using anytime soon.
How Haru Offers High Rates
Given that many competitors only let you earn up to 6% interest on cryptocurrencies, how does Haru let you earn interest on USDT that is so much higher than the industry average? It comes down to the investment strategies that Haru uses. Most competitors lend the cryptocurrency they hold, but Haru invests the crypto in a manner that minimizes risk.
Haru combines arbitrage trading, a market-neutral strategy, and spread trading, among other strategies, to allow for increased growth of funds. To help minimize risk, Haru includes professional traders and top digital asset management firms from around the world, all of whom meet strict criteria. The platform then lets you benefit from the higher earnings via higher interest rates.
If you are looking to earn interest on crypto, do so with Haru and earn compound interest instead of regular interest. The compound interest accounts mean you earn more interest every single day, giving you more for your crypto investment.
