Interest 101

Your custodial Interest Account allows you to earn interest on the funds you keep in your wallet. All you need to do is transfer crypto from your Wallet or Trading Wallet into your Interest Account and leave it there, and we’ll do the rest!

How it works

Interest is calculated and compounded daily, and paid out monthly (on the 1st of each month). All amounts are denominated in crypto (e.g. denominated in BTC if you deposited bitcoin), including transfers into the account, withdrawals, and interest calculations and payments.

When you make a transfer into your Interest Account, you will be shown the interest rate for it. This is an annualized interest rate: it’s the amount of interest you would earn if you kept your funds in the Interest Account for one year. Let’s say you transfer 1 BTC into your Interest Account with an interest rate of 6%*. You would receive interest payments monthly, and at the end of the year, assuming no further transfers or withdrawals and no changes to the rate, you would have 1.06 BTC in your Interest Account.

We use the following formula to calculate daily interest:

Daily Interest = (Principal + Accrued Interest Amount so far) ((1+ annualised interest rate)^(1/365)-1)

Let’s say you transfer 1 BTC into your Interest Account. On the first day, the interest would be calculated as follows:

Daily Interest = (1 BTC + 0 BTC) ((1 + 0.06)^(1/365) - 1) = 0.00015965358 BTC

If you continue to hold the principal and the earned interest in your Interest Account, the daily interest payments will increase over time, because the previously paid interest will be also accounted as part of your balance when accruing future interest. We can see this in the following chart showing the estimated interest payments after 1 Day, 180 days, and 365 Days, from an initial transfer of 1 BTC, with a 6% annual interest rate.

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Keep in mind that, due to market conditions, the interest rate may go up or down while your funds are in the account. We will inform you of the change via email and you can always check the current interest rate for your account in the account details as well (accessible in the Earn Interest tab of your wallet) and withdraw or transfer more at any time.

*Interest rate for bitcoin at the time of writing is 6% APY. This may be subject to change. Please see the Earn Interest page in your wallet for current rates.

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