If you’re looking for a straightforward crypto savings account offering generous returns, then BlockFi could be the answer.
Interest rates in the UK are at an all-time low meaning many savers are looking elsewhere to make their money work harder.
Crypto savings accounts have been around for a few years now, but recently have been coming to the fore as Bitcoin moves into the mainstream.
BlockFi, which launched in 2017, is one of the largest players in this space, and is helping to revolutionise savings and loans.
Much of the cryptocurrency bought by investors is left languishing on exchanges or hardware wallets, but all that is changing.
Earn up to 9.3% interest on your crypto deposits
By depositing your crypto with BlockFi you can earn up to a tempting 9.3% APY with the BlockFi Interest Account (BIA). Check out BlockFi here >>
To do so means holding one of the supported cryptocurrencies and entrusting them to the platform, which is pitching itself as a decentralised bank.
Account set up is very straight forward (enter details and ID, KYC, wait for approval). Then, you’ll need to transfer your crypto over using the wallet address generated by the platform.
If you don’t already hold crypto, you can buy some on a platform such as Coinbase then move it across to BlockFi. Be wary of the fees though, especially with Bitcoin. Check out Coinbase here >>
If you’re keen on Bitcoin, you can cut the transfer fees significantly but buying a crypto such as Litecoin, transferring it to BlockFi then converting it to BTC. The fees for moving Litecoin are far lower.
Trade cryptocurrencies instantly without leaving the platform
You can also trade a limited number of supported coins directly through the platform.
Unlike other similar platforms in this space, such as Nexo, there is currently no facility to deposit and earn interest on GBP at the time of writing.
To earn the highest rate of interest you’ll need to hold Tether (USDT), a stablecoin which is pegged to the US Dollar.
Unlike other cryptocurrencies which can be extremely volatile, Tether tracks the price of the USD.
The interest rates on other coins varies. For example, you can earn 5% on Bitcoin (BTC), 5.5% on Litecoin (LTC) or 4.5% on Ethereum (ETH). These are the current interest rates:
Minimalist apps make getting started simple
Both the desktop and mobile apps are super easy to use. They feature minimalist interfaces with all the core functions clearly signposted.
In fact, the design puts many of the apps offered by high street banks to shame. This really is banking made simple.
Another huge plus is that there’s no minimum deposit amount. You can test the service with a few Satoshis (fractions of Bitcoin) to see if it’s for you.
However, there are minimal withdrawal amounts, otherwise transactions can face long delays.
Interest, which is variable depending on market prices, and is paid out and compounded monthly. However, how much you’ve earned at any point in the month is clearly displayed.
Other companies such as Nexo pay compounded interest daily, which is a small bonus over the course of a year.
BlockFi allows one free crypto and one free stablecoin withdrawal each month, with the fees for further withdrawals as follows:
If you withdraw mid-month, you keep any interest that you’ve earned up to that point.
Secure a low-cost loan against your deposit
BlockFi primarily makes its money from offering low-cost loans. Once you’ve created an account you can borrow against the funds you’ve deposited.
You can borrow money from as little as 4.5% and you do not have to sell your crypto to do so.
We haven’t trialled this part of the service, but the process appears to be simple and loans are often agreed the same day.
It has also launched a credit card offering crypto rewards and has other banking-related services in the pipeline.
One such offering could be an Exchange Traded Fund (ETF) after BlockFi registered a ‘BlockFi Bitcoin Trust’ with the US Securities and Exchange Commission (SEC).
Is BlockFi safe to use and a legitimate service?
Many people view the crypto space with a certain degree of scepticism, and rightly so as there are many unregulated business popping in and out of existence.
However, BlockFi has some serious institutional backing from the likes of Coinbase, Fidelity and Akuna Capital to name a few.
Also, Gemini Trust Company, which is registered with the New York State Department if Financial Services is BlockFi’s primary custodian.
If you’re wondering if BlockFi is a legitimate company and safe to use, we think yes, although keep in mind the risks.
Cryptocurrency is still in its infancy and no-one knows which direction it will take in the future.
However, if you fancy joining the ride, earning a passive income and ‘stacking some Sats’ then BlockFi is a good choice for its simplicity and pedigree.
Check out our guide to the top five crypto savings and investment accounts.
Adam is the founder of The Crypto Adviser which offers experts guides and reviews on all things related to Bitcoin and cryptocurrency.
Adam is Diploma for Financial Advisers (DipFA) Level 4 qualified, a Member of the London Institute of Banking and Finance (MLIBF), and has worked for many years as a journalist and PR consultant, having studied with the National Council for the Training of Journalists (NCTJ).