Tether Savings Accounts – Can and Should You Make Money With USDT?

Last updated on 28th March 2021

Important Background Information about Tether

Read this page before using USDT for saving reasons.

Tether, the oldest and largest stablecoin among the cryptocurrencies, has been in the spotlight again and again since 2017 because the company has repeatedly been accused of shady dealings and business backgrounds.

The biggest and most significant accusation, however, is directed against the alleged 1:1 coverage with the US dollar through corresponding reserves. Initially, the company Tether LTD had claimed on its website that one USD was deposited with them for every USDT.

However, in 2019 this statement was adjusted to the actual conditions. After it turned out that the exact cash reserves are not even close to 100% USD cash holdings and the company uses quite different financial resources to back their self-issued currency, Tether LTD apparently decided to formulate the information on this in a very unspecific and ambiguous way.

In fact, currently only about 3.6% of the USDT coins issued by Tether LDT are said to be truly backed by cash in USD. Even more than 60% of the company’s reserves seem to be commercial paper, which is nothing more than unsecured loans. And it is questionable to what kind of companies Tether LTD has issued these unsecured loans. Other reserves consist of fiduciary deposits, reverse repo notes and treasury bills.

The bottom line is that the majority of Tether LTD’s reserves are simply unknown and USDT coins are mainly created out of thin air. The company is anything but transparent.

For these reasons, many people fear that the Tether company will be taken out of circulation sooner or later through appropriate legal proceedings.

Since it is the third largest cryptocurrency in terms of market capitalization, a USDT collapse would have to trigger a lavine of market crashes in the crypto space. Especially because cryptocurrencies are traded against USDT on many exchanges. If USDT would loose its value, all this purchase power / capital would be gone so traders couldn’t buy other coins anymore with it.

A growing number of crypto investors and traders therefore prefer to use safer alternatives to Tether, first and foremost the stablecoin USDC, which, unlike Tether, are issued by a regulated, more trusted company. That’s why among crypto experts USDC savings accounts count as the safer choice.

USDT (Tether) compared to USDC (Coinbase Stablecoin)

USDC is another stablecoin on the US dollar issued by the US trading platform Coinbase. The major differences between USDC and Tether (USDT) are that Tether operates entirely unregulated (it is currently based in Hong Kong, according to their website), while Coinbase is a fully regulated US company. While Tether initially issues its coins only via OTC (over the counter, private) trading, USDC is acquired publicly via the Coinbase trading platform.

It is also significant that regulated platforms like Coinbase and Bitstamp, two of the largest and most regulated crypto trading venues around, do not offer USDT for trading. The only truly large and regulated exchange where Tether can be traded for US dollars is Kraken.

This means that Tether Ltd has to closely monitor the market activity on this platform, because if the supply of Tether on the platform exceeds the demand, Tether Ltd will be forced to buy back Tether with the dollars deposited when the coins were created, because otherwise the price would drop and the 1:1 dollar coverage would no longer exist. This means that if Tether Ltd. does not cover its coins 100% when issued, and the supply side on public trading platforms against U.S. dollars becomes too large, this too could in theory bring down the Tether coin.

When this happens, you don’t want to have USDT holdings on any platform, like in a savings account, as your capital might then be highly at risk.

So far, however, Tether savings accounts work smoothly and investors benefit from high interest payments. However, it is advisable to follow news about Tether regularly to be able to react in time if necessary.

Savings Accounts in Tether ($USDT)

Exchanges USDT approx. APYs Terms
BlockFi USDC interest accounts
  • Interest accrues daily
  • monthly payouts
  • no minimum
  • compounding interest
Youhodler USDC interest accounts
  • Flexible Savings
  • weekly payouts
  • 50 $USDT minimum
  • compounding interest
Binance USDC interest accounts
  • Flexible Savings
  • daily interest payouts
  • 10 $USDT minimum
  • no compounding
Coinloan USDC earning
  • Flexible Savings
  • Interest accrues daily
  • monthly payouts
  • no minimum
  • compounding interest
Cake Defi USDC earning
  • Flexible Savings
  • monthly payouts
  • 50 $USDT minimum
  • compounding interest
Nexo USDC earning
  • Flexible Savings
  • Interest accrues daily
  • monthly payouts
  • 1 $USDT minimum
  • compounding interest
Crypto.com USD Coin interest accounts
  • Flexible Savings
  • interest accrues daily
  • 250 $USDT minimum
  • no compounding

About Tether USDT

Tether is a cryptocurrency based on blockchain technology. The coins in circulation are said to be backed by fiat money of an equivalent amount, partially in the form of USD cash holdings, but also by loans and other financial resources. The tokens are traded under the USDT symbol.

Tether is a special kind of cryptocurrency called stablecoins, which ensure stability of cryptocurrency and protect from dramatic price volatility, such as that often observed with Ethereum and Bitcoin.

How Does It Work?

The makers of Tether designed it specifically as a bridge between cryptocurrencies and fiat currencies and offer transparency, stability, and low transaction costs. Tether is pegged to the U.S. dollar (or tethered, hence the name) in a 1-to-1 value ratio. Even though the stablecoin has dropped below $1 in the past, the peg serves to facilitate value retention.

Who Launched Tether?

Initially, Tether was launched as RealCoin. In November 2014, it was rebranded by the eponymous company Tether Ltd. This company maintains fiat currency in reserves. It does not provide a guarantee for any right of exchange or redemption for fiat money, which is something investors should be aware of.

Number of Tokens and Market Cap

There are currently over 24 billion Tether tokens in circulation. Market capitalization is currently over  USD 40 billion against the background of a rise in corporate and institutional demand.


Originally, Tether was issued via Omni Layer on the Bitcoin blockchain. This protocol is used to issue and trade digital assets on top of BTC. It makes it possible to mint and burn Tether coins according to custodial value. Omni Layer can be used to track and report how many Tethers there are in circulation.

Omni Explorer enables holders to see their verified transactions on the blockchain. As of last year, the BTC sidechain Liquid also hosts Tethers. There is a narrow relationship between Tether and BTC. This exchange accounts for the majority of exchanges of Bitcoin. More specifically, the latest data shows 57% of all BTC transactions are done in Tether. USDT is a key liquidity source for the cryptocurrency market.

Tether is also available on Tron, Ethereum, and EOSIO’s blockchains. They enable native creation of new assets. Tether’s biggest market is on Ethereum to date.

Regulation vs. Registration

Tether is not regulated by any state department of financial services. While it’s linked to the Bahamas, an inspection of the island nation’s Central Bank showed it wasn’t licensed, neither as an electronic provider of financial services nor as a money transmission business. The company behind USDT is incorporated in the British Virgin Islands, but not regulated there. Tether cites its registration with FinCEN as a factor that should provoke trust in potential traders and investors, which it most certainly does. It’s important, however, to differentiate between regulation and registration. Regulators audit financial businesses’ statements, set rules on the investments possible, and vet executives and directors. FinCEN doesn’t do any of this.

This isn’t to say there’s anything wrong with being unregulated. Many legitimate and reputable money services businesses are not run under any specific regulatory framework.

How can stable USDT value be guaranteed?

This is the next logical question. As mentioned, USDT does not dispose of full currency backing for its reserves. USDT’s cash equivalents are other cryptos. There are concerns that loans to other parties comprise its reserves to an extent. None of this means Tether is unstable though, at least not yet. Its popularity and market cap should make that obvious. However, this may also be due to the fact that not enough traders have all this background information about Tether.

How Long do Tether Transactions Take?

Typically, it takes a maximum of 4 hours to confirm a transaction, after which it reaches the destination address instantly. Being a blockchain asset, Tether is easily converted into from fiat currencies and other cryptocurrencies. This ensures a seamless approach for investors to remain in the market and avoid volatility.

Conversion and Fees

You can send USDT anywhere globally without having to pay extra transfer fees or convert funds. Sending USDT globally is just as easy as sending Bitcoin. Accountability is another major advantage of using USDT to make payment. Confusion around the use of Bitcoin to make payment has existed ever since the king of cryptos was created. Companies that use cryptos to pay for products or services frequently have to estimate how much the amount paid was in fiat. As Tether is equal to the US dollar, this concern is eliminated.

Tether is very important as a transit cryptocurrency easing the exchange of physical to digital money. In some parts of the world, this is no easy feat. It can be quite challenging to convert crypto into local currency. It’s even illegal in some countries. Tether is a great alternative in these cases.

Tether also lets exchanges enjoy high liquidity. They don’t need to deal with fiat money directly. This helps them ease restrictions related to KYC and AML, which their platforms have to observe.

Platforms to Trade Tether Against Cryptos

On the platforms below, you can use Tether to trade against BTC and cryptocurrencies instead of USD. It can be transferred easily between platforms. There is no need of lengthy and often costly bank transfers. These platforms can be used to cash out cryptocurrency easily and quickly because they enable borderless money transfers.


On Binance, you can deposit your choice of over 150 cryptocurrencies. The market rates, at which you can trade many of these for USDT are among the best.


Bybit charges a fee of just 0.1% per request for asset exchange. This is the only fee charged. You don’t pay two-way mining fees when you use Bybit to exchange amounts directly.

There are some transaction limits to consider. The minimum limit per 24 hours is 1 USDT. The maximum limit per transaction is 3,000,000 USDT. This is also the exchange limit per user account. The limit for the platform is 60,000,000 USDT.


You can buy and sell different currency pairs on this cryptocurrency derivatives exchange, which is among the most intuitive and well designed of its kind. Trading options include USDT, BTC, ETH, USDT, index futures, and BNB futures with exciting leverage of up to 101x.


On this exchange, 1 USDT is worth 0.99983 USD. At present, trading opportunities have taken a back seat to some legal conflict shared by the exchange and Tether. The two companies recently settled a long-term legal dispute after reaching an agreement with the attorney general’s office in New York. The office was investigating the companies over accusations of having attempted to cover up losses amounting to USD 850 million. Investors expressed concerns about whether Tether’s reserves were sufficient to back up the tokens in circulation.


On the transport protocol Algorand, KuCoin supports withdrawals and deposits for Tether and USD Coin. This network can be used to transact USDT at a rate of more than 1,000 transactions per second. What’s more, the transactions are decentralized, safe, and scalable.


Kraken supports withdrawals and deposits of Tether on ERC20 blockchain (Ethereum) and USDT-OMNI (Bitcoin). Both USDT options will appear as USDT in the account. You can withdraw and deposit Tether using either protocol.

Poloniex and Kriptomat support buying, selling, and storing of USDT.

Platforms to buy and Sell Tether for Fiat Money

On Binance, you can purchase USDT tokens via bank transfer. Simply wire a chosen amount to the platform. You can purchase Tether through a select trading pair and trade it on Binance thereafter.


Kraken makes it possible to buy and sell USDT at a time when it’s possible to gain fast exposure to crypto asset price increases. You can sell Tether for a number of fiat currencies via Kraken’s global order book. It’s a good alternative for FX trading when lucrative.

Mt. Pelerin

Mt. Pelerin has a crypto-fiat currency calculator that shows what price and rate you’ll get when you sell Tether via bank transfer. Their mobile app facilitates the process.


You can sell Tether easily and fast as soon as you register on this platform. You can deposit the currency of your choice, then go to the Deposit and Withdraw page and follow the instructions on making an order of deposit.

How to Convert Tether to Bitcoin

You can convert USDT to BTC though Paxful, Coinswitch, and other providers. Just go to your Wallet page listing your Tether and Bitcoin wallets, go to Convert, and enter the Tether amount you want to convert to Bitcoin in the field provided. Most systems will ask you to double check the amount.

Withdrawing Tether

You can use Tether.to to withdraw to a bank account. You don’t need to use another payment platform. What’s more, it’s direct and convenient. There is just a 0.1% fee. Unfortunately, it takes forever to have your account verified and there are cash out limits.

You can deposit USDT to Bitfinex to cash out. The fee is 0.1% again. You need to undergo two-factor authentication, which is not convenient. The transaction won’t be processed very fast. You need to wait 3–4 days.

On Kraken, it’s free to deposit Tether. You can then exchange it to USD and cash out. Here, one Tether doesn’t equal one dollar. There is a 0.2% exchange fee on exchanges from USDT to USD. There is also a daily and monthly limit.

Epay is a good option to cash out USDT. There are no limits on the amount you can cash out. Transactions are processed within 12 hours. Verification is fast and simple. It takes four days on average to process an order. Epay supports wire transfers as well as gateways such as PayPal, Payeer, Perfect Money, AdvCash, Payza, FasaPay, OKPAY, and many more cooperative exchangers. Tether can be exchanged for BTC instantly.

How to buy Tether With Credit Card

You can buy Tether using a credit card on Paybis, Binance, Paxful, BTCBIT, Okex, Coinswitch, etc. If your card is accepted, you get tokens after providing your Tether wallet address. Then, you make payment on the payment page. Simply enter your card details and you’re done.

Returns on Savings With Crypto Fintechs vs. Traditional Banks

Stablecoins are a viable alternative to traditional bank deposits today as the latter are negligible in the best case. Inside a crypto environment, cryptocurrencies imitate the role of fiat currency. Estimates show that you get 7.2% APY on USDT on average. In comparison, banks will give you nothing for your dollars. You get high returns because what USDT essentially does is substitute USD in the cryptocurrency world.

We find that USDT savings accounts are a smart alternative to traditional savings accounts, which no longer bring profit.

You can buy USDT with USD at Cex.io, Paxful marketplace, Kraken, and Exmo among others. On Cex.io, USDT 138.8619 is currently with USD 150. Paxful lists different platforms ranked according to the best exchange rate. Here, you can also exchange USDT for the Nigerian naira and Indian rupees. On Kraken, you can exchange USDT for BTC and cash out BTC for USD. This exchange has very good rates. Exmo has lots of fiat currency and cryptocurrency pairs. Here, one USDT is worth one USD.

Bottom line

Tether has the biggest market cap of all stablecoins and its value is currently stable. On the downside, it’s unregulated and backing by reserves in USD is not guaranteed.