While cryptocurrency trading can be potentially lucrative, it’s not for everyone. The crypto markets are notoriously volatile and unpredictable, which means that inexperienced traders can be quickly caught off-guard and suffer significant losses. This is the reason why many crypto investors prefer a more passive “buy and HODL” strategy.
Nowadays, even passive crypto investors are able to grow their crypto stash through products such as Binance’s Simple Earn. To be sure, using Simple Earn has less potential upside than active trading. However, the risks are also significantly lower, as you’ll be able to earn additional coins regardless of which direction the cryptocurrency market is heading.
Earn Interest on Your Crypto with Binance Simple Earn
What is Binance Simple Earn?
Simple Earn is a product offered by Binance that allows cryptocurrency holders to deposit their coins and earn yield on their deposit. As one would expect from Binance, the Simple Earn supports a huge variety of cryptocurrencies—you’ll likely find that the coins you hold are supported, whether you invest in large market cap coins or prefer smaller altcoins.
Users can choose between Flexible savings products and Locked savings products. The availability of these products will depend on the coin you want to earn yield on. For example, Binance currently only offers Locked products for BNB, while you can access both Flexible and Locked products for many other coins. At the time of writing, Binance offers more than 300 different products under the Simple Earn umbrella.
As a rule of thumb, Locked products offer higher yields, but also require users to commit their crypto for a certain period of time in order to earn rewards. Flexible products, on the other hand, offer lower yields than Locked products, but you can pull out your funds at any time and keep the rewards you’ve earned. Now, let’s take a closer look at the two types of products offered on Simple Earn.
Flexible products
Flexible products allow you to earn yield on your crypto while having the flexibility of withdrawing your funds at any time. The rewards accrue on a daily basis as long as your crypto is deposited in the Flexible product. Once you want to pull your funds out, you can choose between a fast redemption and a standard redemption.
If you choose the fast redemption, your funds will become available in your Spot Wallet immediately, but you won’t receive any rewards for that day. If you choose the standard redemption, you’ll have to wait until the following day to get your funds in your spot wallet, but you will also earn rewards for the last day of your deposit. So, if you’re not in too much of a hurry, the standard redemption is usually recommended.
Locked products
After subscribing to a locked product, you will need to keep your funds in the product for a set amount of time in order to earn rewards. The main benefit of locked products are higher yields than what’s being offered by flexible products. The longer the lock-up period, the higher the yields usually are.
If you need to immediately access funds you deposited in a locked product, you can do so. However, if you choose to redeem your funds before the end of the lock-up period, you will receive no rewards.
Is Binance Simple Earn right for you?
The Binance Simple Earn product allows crypto holders to earn yield on their coins and tokens. If you’re planning to just hold your cryptocurrency passively and don’t intend to actively trade, Simple Earn can be a great way to grow your crypto stash.
Even though Binance has built up a strong reputation in the crypto community since its launch in 2017, the crypto community has grown more skeptical towards centralized crypto businesses overall following the various scandals we saw in 2022 such as the collapses of FTX, Celsius and Voyager. This has led many crypto investors to switch over to self-custody instead of depositing their funds to a centralized crypto platform.
If you want to use Binance Simple Earn, you will need to deposit your crypto to Binance and trust that it will be handled with care. So, if you prefer to self-custody your crypto, Simple Earn is not the product for you.
On the other hand, if you’re comfortable with holding crypto on a centralized exchange, Simple Earn is a great product that puts your coins to work instead of having them sit idle in your wallet.
Binance Simple Earn pros:
Large selection of supported crypto assets
Rewards paid out daily
Grow your crypto holdings regardless of market conditions
Choose between flexible and locked savings products
Binance Simple Earn cons:
Isn’t suitable for users who want to self-custody their crypto
Binance Simple Earn rewards
When you’re subscribing to a Simple Earn product, you will be presented with an estimated APR (annual percentage rate). However, you have to keep in mind that the actual APR you will be earning will fluctuate depending on market conditions. This applies to both Locked and Flexible savings products.
The displayed APR should be used only as an estimate, as it will change depending on market conditions.
Use Auto-Subscribe to benefit from compound interest
After you subscribe to a product, rewards will start accumulating at 0:00 UTC the next day. After the first full day of the rewards being accrued, you will receive your first rewards to your Spot Wallet on Binance.
By default, the rewards you earn will go to your Spot Wallet, and will not be added to your deposit in the Simple Earn product, but will be separate in your Spot Wallet. This means that you will not be earning compound interest. If you want to compound your rewards, you can do so by using the Auto-Subscribe feature. If you enable this feature, assets from your Spot Wallet will automatically be moved to Simple Earn products.
You can enable Auto-Subscribe on the Simple Earn page by enabling the “Auto-Subscribe” slider.
Subscription caps and Tier Rate
There is a limit on how much crypto a single account can deposit into a Simple Earn product. You can view this limit under “Available Quota” when you’re subscribing to a product. The maximum amount of crypto you can deposit will usually vary depending on whether you’re subscribing to a flexible or locked product.
You also have to be aware of Simple Earn products tagged with “Tier Rate”. In these products, the rewards you will be earning will depend on how much crypto you deposit. When it comes to Tier Rate products, higher APRs are offered for smaller deposits.
The bottom line
Binance Simple Earn excels at providing passive crypto investors an opportunity to slowly grow their holdings over time without worrying about market volatility. Since it provides both Flexible and Locked savings options, users can decide whether they want to prioritize the highest yields or flexibility.
The range of supported crypto assets is another strong point for Binance Simple Earn. The platform supports stablecoins, BTC, ETH, BNB, as well as a host of other cryptocurrencies, providing opportunities for almost all crypto investors.
