Over the last year or more, I have been using Binance as a way to put my crypto to work in the various savings and staking products that they offer. More recently, I've been using it as a savings account for my Euros as well... seeing as the Euros in my regular bank account attract a healthy 0% interest (negative interest if you deposit more than a certain threshold amount). It's a weird feeling to have the money sitting in the savings account earning nothing, but I had gotten used to it wit the crazy low interest rates since the Global Financial Crisis. So, it was a bit of a surprise to see that the Euro holding account at Binance was picking up interest on a daily basis... very strange, but very welcome!
Now, before I start... let's get this bit out of the way, so I don't get flamed by the hard-core crypto crowd. Yes, there is interest on both your crypto and fiat on the offerred Binance savings products, BUT you don't have control over the underlying assets. Not your keys...
If you want to put your crypto to work, then you can always dip into the mainnet staking and DeFi for the various chains, or convert Bitcoin (BTC) to wrapped equivalents to make them eligible to be put into DeFi protocols. However, this is mostly for the technically more experienced, and I wouldn't recommend that for everyone... after all there is capital risk at stake there, as you will be subject to the smart contract and composibility risks (which you may or may not be able to parse), and if you are wrapping tokens you are also trusting a third-party anyway (or a smart contract). So, unless you keep your crypto in cold storage, you are going to take risks one way or another if you want to put that crypto work... personally, I would recommend an exchange like Binance for most people, as it is a one stop shop for most people (keeping up with DeFi and the various individual chains is a nightmare!).
Meanwhile, on the fiat side of things, traditional banks are more "secure" in that they tend to be backed up government guarantees in times of crisis and are often deemed "too big to fail". However, you are getting eaten up by inflation if your money isn't earning interest or being invested in some manner... you pay for that "security" even if the number isn't decreasing.
So, Binance occupies that middle ground. More convenient than self-custody, but less "secure" than banking (no cail-out if Binance goes belly up!). It also offers slightly less APR than self-custody, but more than traditional banking. For me, I consider it a third "leg" of the solution... never put everything in one basket, and so I would advise one to split between these three solutions, depending on your personal appetite for risk and reward.
Perhaps the most interesting of the savings products that Binance offers are the Flexible Terms products, which are immediately redeemable. As you can see, there will be a fiat option (which can be used to fund the Binance VISA debit card), in my case the Euro which offers a 3% interest rate... much better than 0%. Also, easily removable to bank accounts (if you are KYC certified) AND spendable with the debit card.
There are also a wide variety of crypto and stablecoin flexible products with interest rates in the range of 0-6 percent. Just like a traditional bank, Binance is probably re-lending your assets to margin traders on their platform or some other borrower and so the exact interest rates will fluctuate from day to day due to changing demand.
Launchpool is another place to temporarily park your crypto or fiat... although, there is a very limited selection of assets that you can deposit depending on the nature of the new project. This is basically where you set aside your tokens (BNB, BUSD and one other depending on the project) to farm the new project tokens. Mixed bag usually, you never really know how successful the new project will be...
Finally, the BNB vault is a farming aggregator (for the Launchpool), for those who like to set and forget. Plus, it takes in the regular BNB flexible savings rate as well!
The fixed term products are more like the term deposit accounts that traditional banks offer. Much like a regular bank, you lock up assets for a certain period of time with varying interest rates depending on the length of lock up. Very handy place to park your stablecoins in addition to crypto. You can ask for an early redemption, but you will lose a chunk of your accrued interest as a penalty.
Locked staking functions in a very similar way. Basically, you lock up assets to be staked on the project chain. It pays less than doing it yourself, but then you don't have to play around with the hassle of multiple wallets and keeping up with various bits and pieces of news. ETH2.0 is the BETH token that is redeemable for ETH WHEN Ethereum 2.0 launches... that could be several months to a year... or never!
The activities locked staking are high interest special events... they are announced ahead of time and tend to fill up very quickly, so mark them in the calender! Keep in mind that they tend to have minimum participation limits as well.
Finally, like any good portfolio... there is a smattering of high reward, high risk products. Mostly, you are getting exposure to DeFi protocols through this page. High interest rates, with correspondingly high risk. Be careful if you use this, and be sure to understand the protocols and the risks involved. Don't get blinding by big interest rate numbers!
So, there you have it... Binance is starting to offer more and more products via it's Earn program that are more similar to traditional banking products. In many ways, this is a great way to escape the zero interest rate traps of fiat and also to put your crypto work compounding. Of course, doing it yourself is also an option... but you will have to stay up to date with the protocols and all the news that is bouncing around, and for people like me, that is just too annoying and troublesome! I do it for some selected projects that I've followed closely, but not for everything!
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