Thread by @KarimaDigital

Lets make your crypto work for you.

I’m going to tell you how you can Passively earn crypto while you sleep.

We’re going to talk about crypto savings accounts with high APY (annual percentage yield). This is beginner-ish friendly.

#learncrypto #wealthbuilding #DeFi

When we’re talking about APY, we are talking about savings accounts that pay you to let your money sit in the account.

First, it’s important to understand what is APY? I LOVE this definition from @Kasasa


Lets put this into perspective:

Wells Fargo (Traditional bank) offers 0.01% APY

Ally Bank (online bank) offers 0.4% APY

@OutletFinance (crypto company) offers up to 9% APY

Those percentages represent a large difference of what you could earn on your balance

Dollars>cents

Remember...APY, is an amount paid to you, for letting your money sit in a saving account, you earn money for letting your money stay stationary and compound.

How are crypto companies able to offer high APY opportunities?

👇🏽👇🏽👇🏽👇🏽

It really depends on their business model but here are some important factors:

- High yield is generated by lending assets
- they deal with multiple asset types which gives them liquidity
- Loans are Collaterized
- loans can be generated fast
- there are less regulations

These crypto savings accounts are not the type of accounts where you would store emergency funds.

The funds you store here are funds intended for long terms savings.

As always, there is risk in the crypto volatility but you can also earn interest with a stablecoin.

What should you look out for?

There things you should consider that will make you feel confident in your choice.

Most importantly you need to take time to research before you decide where you put your money.

Here are the things that you need to look out for:

1️⃣ APY for crypto asset you intend to deposit

Are you going to deposit ETH, BTC or BUSD (stablecoin)? Each asset has different APY earning potential. Do your research to learn which company will give you the best return. Look into whether the interest is simple or compounding.

2️⃣Minimum Deposit Amount

Its typical for traditional-banks to have a minimum deposit amount but most crypto companies where you can earn high APY do not require a minimum.

So, the barrier to entry is low.

3️⃣Payout frequency

This shouldn’t matter too much when you are making your decision because remember we are treating this like a longterm savings account. You will be letting your money sit and grow but it is good to know how often money is deposited into your account

4️⃣Account Fees

Most crypto companies do not charge account fees. Some companies, like Gemini, factor the fee to host your account into the percentage yield provided to you.

5️⃣Withdrawal Terms

You want to understand what are the terms of withdrawing your money. Some companies limit the amount of free withdrawals and some charge a small fee for withdrawls.

5️⃣ continued.

Occasionally there are some companies that have a lock up period that determines when you can withdrawal (this isn’t very popular but I just wanted to inform you that this is a possibility)

6️⃣Customer Support

Consider whats normal for tech companies as well as what you are comfortable with.

Test the chat bot and ask a question, is it responsive? How long does it take for you to get an actual human on the other side?

7️⃣Insurance- None of these crypto companies are FDIC insured, the FDIC does not back digital currencies. These companies do have protections put in place against hacks and theft.

7️⃣ continued.

Usually there are larger institutions backing them (custodial) that hold the financial assets safe keeping to minimize risk and loss.

Still a little confused? Read below to learn how BlockFi and Outlet custodies their assets

8️⃣ Earn interest with stablecoins.
If you want your crypto (eth/btc/ltc) available for trading or you just want to keep it in cold storage. You can earn interest with a stablecoin.

❗️Stable coins are cryptocurrencies whose value is pegged to the dollar. They are designed to avoid volatility and are backed by another asset, such as gold, bitcoin or US dollars.

Ready to get started?

There are the places I like (affiliate links below):

BlockFi - blockfi.com/?ref=3888ed71

Outlet - outletfinance.page.link/1trY556g5pcC9r…

Here is a list of other places:

thecollegeinvestor.com/34109/top-cryp…