Our journey to find the best ways to earn a passive income continues.
After discussing Nexo and Celsius, both specialized in this kind of service, I’d like to talk about what right now could be the easiest and more "mainstream" solution: Binance.
Please note: in the following article I only refer to Binance.com. I know there’s a different platform available in the US, but I’m not familiar with it and it is my understanding offers different services.
A jack of all trades
I’m not a long-time Binance user, so I’m not sure about how the platform evolved. What I notice right now, is that it really tries to be an all-in-1 platform, offering to you a wide selection of markets and an equally wide selection of financial instruments to play with.
The ones I would like to talk about in this article are their Savings and Staking sections. I will show you screenshots from the app because that’s how I like to handle my assets, but you can also find them in the Earn section of the website.
Make your coins work for you
Do you have any idle assets on Binance? Something you're not day trading and just sits there doing nothing? Very well, it's probably worth checking if it's available in the Savings and/or Staking sections so you can put it to work!
The numbers you will see listed here are the estimated annual percentage yields (APY). These are not fixed but can slightly change from one day to another, so it's just a reference and may not be completely accurate.
APY also varies a lot from one coin to another. On Savings we have 10% for BAKE, 5% for DOGE, 0.51% for DOT, and everything in between. On Staking are usually much higher, sometimes up to more that 40%.
For coins like BTC or ETH are really not exciting, so I think for those your investment would still perform a lot better on Nexo or Celsius. Anyway, the choice of assets is limited on these platforms, and they really make sense only for medium/long time investments.
The list of available coins may be different from Savings to Staking, so make sure to check both before making your choice.
What's the difference?
The Savings section is totally fluid. You can move assets in and out instantly, so you are always in control and, if needed, you can redeem your tokens in seconds, as soon as you need them. If you subscribe here, make sure to activate the "Auto-Subscribe" option, so your interest will be compounded daily!
Locked Staking, as the name suggests, will lock your assets for a predetermined amount of time. Usually it has options for 30-60-90 days. Sometimes, 15 days offers appear for a few days, with a very high APY. Some offers are sold out, so you may want to check the "Available Only" checkbox at the top.
I would like to add that also in Locked Staking your asset are, actually, not really locked (except maybe for the last day). On any other days, you will have a "Redeem earlier" button, that you can use to get everything back immediately. The already paid interest will be subtracted from the amount you are redeeming and you should end up with the same amount you had to begin with.
What I particularly like about these services? They're free!
Yes, you read it correctly, both Flexible and Locked investments are free, as there’s no transaction fee of any kind involved.
How can you make the most out of it?
Well, I have my preferred strategy.
If I own something that is available both on the Staking and Savings sections, I will:
- stake the maximum I can for the number of days that will give me the highest APY in the Staking section
- activate the "Auto-Subscribe" button in the Savings section
Since interest is deposited daily on your Spot wallet, the interest you receive from the Locked Staking assets will start gaining some interest as soon as it's received!
You will find two rows on your Earn wallet with the two different APYs.
