In brief
- Mode says it’s the first UK banking app to offer compound interest on Bitcoin savings.
- The rates rival offerings from competitor BlockFi.
- The company is allowing users to make unlimited savings withdrawals without fees.
Piggy banks taught us how to save money during our childhoods. A recently launched UK-based fintech company wants you to save with Bitcoin and earn interest.
Mode, a UK startup backed by Twitter co-founder Biz Stone, announced the release of a Bitcoin savings account called “Bitcoin Jar” on Tuesday. Users who deposit Bitcoin with Mode will be able to earn 5% APY for the first eight weeks on any amount of Bitcoin. This rivals other services such as BlockFi, which offers between 3.2% to 6% on Bitcoin savings accounts, depending partially on how much a user deposits.
Mode's Bitcoin banking app launched in February, seeking to compete on accessibility. Users are supposed to be up and buying Bitcoin through fiat in under five minutes.
“Mode is the first banking app offering compounding interest on BTC through our partnerships with market-leading lending providers including Celsius Network,” Mode’s head of product and partnerships, Janis Legler, told Decrypt. “This is the first step in our quest to make interest-bearing accounts in the cryptocurrency and stablecoin markets accessible directly through fiat rails to a wide, and also non-crypto savvy, audience."
Mode is clearly trying to compete against players like BlockFi, which recently increased interest rates on its savings accounts. A few things differentiate Bitcoin Jar. For one, users can buy Bitcoin within the Mode app, Legler said, compared to some apps that require users to buy Bitcoin elsewhere and transfer it into their account, which can be difficult for first time Bitcoiners.
Another way Legler said Mode differs from its competitors is allowing users to withdraw as much Bitcoin as they want, and as many times as they want within a day, with no fees. “All withdrawals are processed within [24 hours], in comparison to Blockfi, which limits users to one withdrawal per month and the withdrawal can take up to 7 days to be processed, according to their [terms and conditions],” he said. “Our payouts are also every week, whereas with other providers users get credited every month.”
The quicker withdrawals mean users could keep Bitcoin in the jar to earn interest then quickly transfer money out when they want to use it elsewhere.
As part of the launch, the company also said it underwent a “major redesign” to make the app and Bitcoin “easily accessible to all.” You know, so grandma and grandpa can put the grandkids’ birthday money there instead of in a piggy bank.