10% APY, Is It Worth It?

Months, it has been many months already since I was acquainted with the cryptocurrency bitcoincash or BCH as we all know it. I have earned some and have spent some of the earnings that I was able to collect from the generous platforms such as this and Noise.cash.

From the early days of my journey with BCH, I have been using bitcoin.com wallet to store whatever I have collected from the generosity of the platforms and the other users. If I have to use some of the BCH as legal tender here in my country, I am using coins.ph to convert the BCH to our local currency.

It's really pleasing in the eyes when you see some amount on the wallets you are keeping. But of course, just like real money, BCH is supposed to be spent, and that's what I always do with it. Earn some, spend some, and then earn some more.

From time to time, I have seen users sharing their "savings" strategy and techniques. There are users who aim to keep $1 a day from their earnings, some would hold $2 or even $4. If they could keep it up daily for a long stretch of time, that's going to be a staggering amount of money when converted to our local currency.

And yes, of course, I tried to do that as well. I tried doing the daily, and every other style of saving but it seems like whenever I start doing something of the sort, some unexpected expense will come my way and I have to bite a huge chunk from the amount I was trying to save. And when that happens, the savings will be destroyed and the spending will just continue until all of the funds is exhausted.

Just the other day while I was deeply engrossed with scrolling through my Noise.cash feed, @bmjc98 was sharing her new savings goal that would stretch until the early portion of 2022. And of course, I was a tad jelly and very much inspired. I would like to try to save some again, but this time I would like to try to be more disciplined and a little more motivated than ever before.

There's no way I could ever keep up with her scheme of $4 a day, heck I don't even sure if I can earn $1 every single day for a finite stretch of time. But of course, I hope I can, and with your help...maybe I just could.

Just in time while I was contemplating keeping a savings account, I saw another user's post regarding bitcoin.com new offering.

Apparently, bitcoin.com wallet is now offering a 10%-20% APY if you hold flexUSD in it.

What does that mean?

I'm not really sure since I really am not a financial person. Money and I don't really mix well. We really can't.

APY?

What on Earth is APY? It stands for Annual Percentage Yield. According to WallStreeMojo, APY is the rate at which the investor will earn taken into consideration the compounding interest.

Compounding interest?

Again, I am not a financial person thus I could not explain to you the nitty-gritty formula and numbers when it regards to it. But as I read about it, and how it was explained to me, compounding interest is better (when it comes to investment) than simple interest.

To illustrate it better, let's just say you have invested $100 into a wallet that offers 10% interest paid annually. After a full year, your $100 will be $110. After 2 years, it will be $120, and $130 after 3, and so on and so forth.

Meanwhile, if they are offering a 10% APY on a compounding interest that is payable after a year, your $100 will be $110 after a year, $121 after 2, and $133.1 after the third year.

Sure, in this example, there's only a $3.1 difference between the two schemes but if given more time, or given more capital, the difference will be more significant and it will surely be noticeable. But as of the moment, I do not have that so I'll stick with imagination first. If you have the means to do so, you are welcome to.

Since I plan to save for a long time, I think I can allot a percentage of my BCH to a stable coin and enjoy a bit of interest on the side.

So is 10% APY Worth it?

If you think about it, it may have been a small amount, but I tell you, it does matter, and it is worth it. Especially if you are planning to hold for a long time. Let's say you have a lot of holdings in another wallet right now. You are not using it and you are not planning to use it for the foreseeable future, it's better to let them earn interest while they are not being used, right?

Haloa!

And again, you know the drill. This is not a piece of financial advice and the views and points expressed in this article are just my own. They are not meant to be as a guide or anything.

With that out of the way, let me thank you for the usual support and for making a small savings account possible. I really appreciate it, as always. So, I hope you are constantly well and until we read again...

Cheers!!!

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Series    : All About Crypto
Title     : 10% APY, Is it Worth It?
Published : 04-Dec-2021
Author :  © RB

References:

What Is Compound Interest? (2021, February 16). Investopedia. Retrieved March 12, 2021, from https://www.investopedia.com/terms/c/compoundinterest.asp

Sewak, M. (2021, September 8). APR vs APY. WallStreetMojo. Retrieved December 3, 2021, from https://www.wallstreetmojo.com/apr-vs-apy/