Some of the highest-yielding savings accounts barely break the 1.00% APY mark. That doesn’t even keep up with inflation. But what are your alternatives for higher yields? There’s the stock market. But if you're a cryptocurrency trader, you may have another option.
BlockFi is a cryptocurrency exchange that allows you to earn up to 8.6% annually on your cryptocurrencies. That’s over 8X the best savings account rates.
Another advantage of BlockFi is that you can borrow against your coins. Instead of selling them when you need funds, you can take out a loan. This avoids having to sell into a down market. In this article, we’ll go over how BlockFi is able to offer loan services while allowing you to earn interest on deposits.
- Earn monthly interest payment on your cryptocurrencies
- Borrow against your cryptocurrencies instead of selling them.
- Trade cryptocurrencies (BTC, ETH, LTC, USDC, and GUSD)
💰 Min Deposit
Up to 8.60%
💵 Monthly Fees
Who Is BlockFi?
BlockFi is a cryptocurrency custodian that allows its customers to take out USD loans against their cryptocurrencies. Its founders are Flori Marquez and Zac Prince. BlockFi was founded in August 2017 and is based in Jersey City, New Jersey. The company has raised $158.7 million up to a Series C.
“We are in very early innings in this sector, and everyone is working together to increase the size of the market and make it accessible around the globe,” Prince said to Crunchbase. “We are lucky to be in a position where our business is growing rapidly as cryptocurrency has momentum and relevance right now.”
What Do They Offer?
BlockFi allows you to earn interest on your cryptocurrency and take out USD loans against it as well. You can also trade cryptocurrencies on BlockFi. They currently offer a limited number of cryptocurrencies for trading, which include BTC, ETH, LTC, USDC, and GUSD.
BlockFi Interest Account (BIA)
The interest-bearing account is called the BlockFi Interest Account. You can earn interest in BTC, ETH, LTC, USDC, GUSD, and PAX. A minimum balance is not required. Here are BlockFi's current interest rates:
- BTC Tier 1: 6.00% (for amounts of 0 to 2.5)
- BTC Tier 2: 3.20% (for amounts over 2.5)
- ETH: 4.50%
- LTC: 5.00%
- PAXG: 4.00%
- USDT: 7.00%
- USDC: 8.60%
- GUSD: 8.60%
- PAX: 8.60%
If you don’t own any of the above coins, you can wire USD into a BIA. Your USD will be converted to stablecoins (USDC, GUSD, or PAX). Interest in your BIA is paid out monthly in Bitcoin, Ether, Litecoin, USD Coin, or Gemini Dollar.
You get to choose which coin interest is paid in. The benefit of choosing the payout coin is that you can diversify your portfolio across various coins.
Up to 8.60%
Up to 4.50%
Up to 6.00%
BlockFi allows you to borrow USD against your coins on deposit. The minimum loan amount is $5,000. The LTV (loan-to-value) ratio is 50%. That means 50% of your coins will need to be put up as collateral.
Coins that can be used include BTC, ETH, or LTC. The loan duration is 12 months and the interest rate works out to 4.5%. Origination fees may also apply.
As cryptocurrencies are very volatile, you can quickly fall outside of the 50% LTV. When the LTV reaches 70% (called a trigger event), BlockFi will send a notification that you must put up more collateral to bring the LTV back down to 50%.
Are There Any Fees?
Yes, there are fees for withdrawing currency from your BlockFi account. However, you can make one free withdrawal per month. After that, you’ll incur a fee for each withdraw, as listed below:
- BTC — 100 per 7-day Period @ 0.0025 BTC (works out to ~$30)
- ETC — 5K per 7-day Period @ 0.0015 ETH
- LTC — 10K per 7-day Period @ 0.0025 LTC
- Stablecoins — 1M per 7-day Period @ 0.25 USD
There are minimums for withdrawals that are imposed by Gemini. They are:
- 0.003 BTC
- 0.056 ETH
How Do I Open An Account?
You can visit the BlockFi website to open an account. You'll need to upload a clear photo of a supported identification document. Blockfi says that most applications are approved within minutes of ID being uploaded.
Is My Money Safe?
Gemini does, however take measures to protect your funds. These measures include keeping the majority of funds in cold storage (i.e., offline). BlockFi also says that its client funds are placed ahead of any equity or employee funds in the event of a loss.
Gemini is a New York trust company regulated by the New York State Department of Financial Services (NYSDFS) and a licensed depository trust. Gemini is also SOC 2 Type 1 security compliant.
Is It Worth It?
Certainly, you'll need a certain appetite for risk to use a company like BlockFi. However, if you're already trading cryptocurrencies, then you're probably already some with a fairly high tolerance for risk.
BlockFi risks are lower than those found at many other cryptocurrency exchanges. Their payout stack (client before equity and employee funds) puts the customer first. And they use Gemini as a custodian, which is regulated in the US.
However, any non-deposit (i.e., non-FDIC) or non-SiPC protected funds will always be at a higher risk of loss. Also, be careful when borrowing against your cryptocurrencies, as wide price swings could cause you to quickly violate the 50% LTV threshold.
Not sure that BlockFi is right for you? Check out our full list of top crypto savings accounts to see how it compares. Or if you prefer the safety of an FDIC-insured bank account, these are our favorite high-yield savings options.
Min Balance Requirements
Interest Rate On Deposits
$10 minimum fee for incoming wires
All BIA account holders can make one free withdrawal per month.
$5,000 per wire withdrawal
Currently in Beta
Will connect with any bank that uses Plaid (about 9,600 U.S. banks)
1-3 business days
Digital asset insurance provided by Gemini protecting against against the loss of cryptocurrency related to security breaches, fraudulent transfers, or employee theft.
Mobile App Availability
iOS and Android
Customer Service Phone Number
Customer Service Email
- Interest Rates
- Fees and Charges
- Customer Service
- Ease of Use
- Products and Services
- Safety and Security
BlockFi is a digital platform that provides crypto savings accounts and crypto-backed loans in addition to supporting live cyrpto trading.
- High yield on your cryptocurrency deposits
- Ability to borrow against your crypto assets
- No minimums or monthly fees
- No FDIC or SIPC insurance
- Rates are subject to change, depending on borrower demand
- Limited to one free withdrawal per month
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.