How does Xapo Bank's annual interest work?
How do I generate interest on my funds?
To start earning interest on your holding you must move your funds to Savings. You can start earning with a few simple steps:
Step 1 - Tap on Wealth.
Step 2 - Tap on either USD Savings or BTC Savings.
Step 3 - Tap Add Funds and proceed to confirm the transfer of funds to Savings.
How much interest can I earn, and how does it work?
The interest on your holdings is based on an annual rate*. This interest is paid out to your Bitcoin balance each day, which you can see reflected by navigating the Earnings section in the Xapo Bank app. You can choose to keep it as Bitcoin in your account or convert it at any point into US dollars. Because interest is calculated and paid out on a daily basis, the daily interest will change if you add or withdraw funds from your account.
You will see the interest payout transaction added to your Bitcoin activity list. Depending on the types of funds you hold at Xapo (US dollars and/or Bitcoin), you will either see one or two interest payout transactions daily.
*The Annual Interest Rate offered on US dollar and Bitcoin deposits is variable and may change anytime. Both US dollars and Bitcoin earned interests are paid out in satoshis and added daily to your Bitcoin balance.
What is APY?
APY stands for Annual Percentage Yield and can be thought of as the amount of interest you will earn on your funds over the course of the year.
Is there any minimum balance to hold to earn interest?
Yes, there is. You should hold a minimum of $20 or 0.000365 bitcoins balance to start earning interest with Xapo.
Which assets are eligible for earning interest?
Both your US dollar account and Bitcoin wallet will earn interest when the balance is above the minimum balance set out above. The amount of interest earned from different holdings will vary and may change over time. We will always display the current APY rate in your Xapo Bank account.
Why are the interest earnings in Bitcoin?
Bitcoin is the most trusted non-government currency in the world. We believe that providing the earnings in Bitcoin will not just help you protect and grow your life savings, but also show you the benefits of holding the future's most convertible currency. Bitcoin, not your thing? You can quickly and easily convert your earnings from Bitcoin to US dollars in the app.
Is earning interest a taxable event?
In most countries, crypto is considered either a digital asset, stock, bond, or other capital assets. Like these assets, the money you gain from crypto may be taxed at different rates, either as capital gains or as income, depending on how you got your crypto and how long you held on to it. Xapo Bank pays interest on your holdings in Bitcoin, and this might be considered taxable income. The good news is that if you are holding crypto, there is no immediate gain or loss, so the crypto is usually not taxed.
Please note that Xapo Bank does not provide tax advice and none of this should be considered advice or an individualized recommendation. Please consult a tax professional regarding your own tax circumstances to ensure our products and services are right for you.
Once I start earning interest, can I opt out?
Unless otherwise stated, you can opt out of earning interest at any time - please reach out to us, and we will opt you out.
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