Some crypto accounts now promise high-yield interest. What investors need to know
People enjoy themselves at the Bitcoin 2021 Convention, a crypto-currency conference held at the Mana Convention Center in Wynwood on June 04, 2021 in Miami, Florida.
Joe Raedle | Getty Images
Investors searching for regular payouts can look beyond traditional bank accounts and stodgy dividend paying companies and into cryptocurrencies yield accounts, but the new products aren’t risk free.
Many crypto firms — whether they be exchanges, fintech startups or investment funds — offer products that pay a yield, often at a higher interest rate than traditional products like a bank savings account or certificates of deposit.
These products offer investors a way to make a return on their crypto beyond simply holding or trading the currency.
“Because the retail side of the crypto space is so built out, it’s very easy for clients to go get meaningful yield. It’s a real thing now,” said Tyrone Ross, a financial advisor and CEO of Onramp Invest.
However, there are significant differences between crypto firms’ offerings and traditional products. Here’s how some of those accounts work and what risks investors should keep in mind.