What is APY

Crypto Explained #2: What is APY?

Chibuike Eze

Annual Percentage Yield, popularly known as APY, annual interest rate or rate of return is the amount of money received on an initial investment for some time (usually one year).

When a person invests in a crypto asset or buys their first coin, it is very normal to see them hold onto their asset in their crypto wallet where it neither adds more value nor reduces. This has been a trend up until smart saving ideas like Busha Yield became a thing.

One common term to further explain how APY works is compounding. In simple terms, “the more you save, the larger your returns grow”.

With this technique, you afford to save your initial investment as well as earn interest on it daily for one year. Many crypto exchanges feature different crypto assets and investment windows open to traders and enthusiasts.

For a better understanding of what APY is, imagine you have 1000usdt in your crypto wallet and need it to grow for the next one year without any knowledge of crypto trading. Using a feature called Yield on the Busha app, you can create a savings plan where up to 10% interest will be added to your 1000usdt. This means that at the end of one year, you would have made a decent 1100usdt.

It is easy to spot any good investment or savings plan using its APY.

Tip-off: Don’t simply look at how big a return rate is, but rather, how consistent, secure, and stable the asset you’re saving is bearing in mind inflation rates and future growth opportunities, especially for crypto assets. Also, it’s important to use a trusted platform.