How to earn interest on crypto: 4 methods you can try

Feb 26•5 min read

Your crypto can work while you hold it

For years, the only way to benefit from crypto was by hoping the price would rise.

You'd buy Bitcoin or Ethereum, watch the charts, and wait.

But in 2026, holding crypto doesn't mean it has to sit idle. Crypto earning refers to a service that lets you earn interest on your crypto holdings.

You can now earn daily interest on Bitcoin, Ethereum, stablecoins, and other assets while maintaining control over your holdings.

This guide breaks down how earning interest on crypto works, the methods available, and what to consider when choosing where to earn.

How does earning interest on crypto work?

Interest is typically earned on your added cryptocurrency and can be compounded daily, weekly, or monthly, with the rate varying depending on the platform and specific cryptocurrency.

You earn a portion of the returns generated, paid out as interest.

Method 1: Flexible Savings (earn with access)

Flexible Savings on Nexo gives you full access to your funds at any time while earning daily compounded interest that's credited automatically.

There's no lock-up period. Your crypto stays accessible for trading, spending, or even withdrawal, but it earns interest every day it remains in your account.

Who does this work for:

People who might trade occasionally or use crypto for payments and enjoy watching their balance grow daily as interest accumulates automatically.

On Nexo, you can:

*Interest rates vary by jurisdiction and Loyalty Tier, and are subject to change. Check nexo.com/earn-crypto for current rates.

Method 2: Fixed-term Savings (higher rates for commitment)

Fixed-term Savings allow you to commit your digital assets for a predefined period to earn extra interest, with terms typically ranging from one to twelve months.

Who does this work for:

People who think in seasons, not days, and want their savings to compound quietly in the background.

On Nexo, you can:

  • Choose 1, 3, or 12-month terms
  • Earn higher rates than Flexible Savings
  • Auto-renewal option available — your term is prolonged for the same period once the interest payout is completed, so you continue to earn without interruptions

When markets move sideways, the majority of a portfolio's growth can come from yield rather than price action, and fixed terms may allow long-term holders to turn static exposure into predictable income.

Method 3: Earning on stablecoins

Stablecoins offer some of the highest interest rates in crypto because they maintain stable value while generating yield.

On Nexo, you can:

*Interest rates vary by jurisdiction and Loyalty Tier, and are subject to change.

Method 4: Compounding strategies

Daily compounding is the key — each day's interest becomes part of the next day's principal, creating steady incremental growth.

But you can amplify this effect:

Reinvest interest automatically — With Nexo's auto-renewal option, both principal and earned interest can roll into a new term automatically, ensuring continuous compounding without manual action.

Earn in NEXO Tokens for extra interest — Opt to earn your interest in NEXO Tokens for an additional 2% interest on top of base rates.

Combine Flexible and Fixed-term Savings — Many clients combine both — keeping some assets liquid in Flexible Savings while using Fixed-term Savings to boost their overall yield.

Over months and years, these compounding strategies can significantly amplify your total returns.

What to know before you start earning

Here's what matters:

Rates are variable — Interest rates can change based on market conditions, asset type, and platform policies. Make sure to always check current rates.

Asset volatility — If the value of your cryptocurrency drops, your overall portfolio value decreases, though you still earn interest based on the cryptocurrency amount, not its value.

Tax considerations — Interest earned from a crypto is typically considered taxable income. Consult a tax professional for advice specific to your situation.

Frequently asked questions

1. Is it safe to earn interest on crypto?

It depends on the platform. Look for institutional-grade custody, regulatory compliance, and transparent risk management. Choose carefully and do your own research before adding digital assets. 

2. What's the difference between Flexible and Fixed-term Savings?

Flexible Savings gives you access to your funds at any time while earning daily interest. Fixed-term Savings let you earn higher rates by committing assets for a set period.

3. Can you earn interest on Bitcoin?

Yes. Platforms like Nexo offer up to 6.5% annual interest on Bitcoin with daily payouts. Rates depend on your Loyalty Tier and jurisdiction. Interest compounds automatically as long as Bitcoin remains in your account. 

4. Which crypto earns the most interest?

Stablecoins typically earn the highest rates. Rates on Bitcoin and Ethereum are lower but still competitive.

5. How is interest on crypto taxed?

Interest earned from crypto is typically considered taxable income. Tax treatment varies by jurisdiction, so consult a tax professional for guidance.

6. Do you need to commit your crypto to earn interest?

No. Flexible Savings lets you earn interest with full access to your funds. Fixed-term Savings offers higher rates if you commit for 1, 3, or 12 months, but it's optional.

These materials are accessible globally, and the availability of this information does not constitute access to the services described, which services may not be available in certain jurisdictions. These materials are for general information purposes only and not intended as financial, legal, tax, or investment advice, offer, solicitation, recommendation, or endorsement to use any of the Nexo Services and are not personalized, or in any way tailored to reflect particular investment objectives, financial situation or needs. Digital assets are subject to a high degree of risk, including but not limited to volatile market price dynamics, regulatory changes, and technological advancements. The past performance of digital assets is not a reliable indicator of future results. Digital assets are not money or legal tender, are not backed by the government or by a central bank, and most do not have any underlying assets, revenue stream, or other source of value. Independent judgment based on personal circumstances should be exercised, and consultation with a qualified professional is recommended before making any decision.

Interest rates vary by asset and Loyalty Tier and are subject to change. When terms such as "up to" are used to denote limits, achieving these maximum or minimum thresholds may be conditional on additional actions or fulfillment of certain criteria and requirements that may not be attainable by all clients. To start earning interest, clients in certain jurisdictions must proactively opt in for the service in their Nexo account.