Donut Review: Earn Up To 10% APY On Your Spare Change

There are a number of savings and investing apps available today that offer “round-up” features. Digital “round-ups” are like the modern version of a pot of change.

With every purchase you make with an affiliate card, the “change” left over is put into a savings account or used to purchase an investment of your choice.

But while there are many automatic savings apps available today, it would be difficult to find one that allows you to invest your rounded dollars in cryptocurrency. But that’s exactly what Donut has made possible with their mobile app.

With Donut, your roundups can be automatically converted to digital dollars and lent to earn interest as often as every 15 seconds. Read our full review to learn more about the app’s features, tools, and pricing.

High-yield cryptocurrency savingsAPYs range from 4-10% Plans have an annual fee of about 2%

DeFi Powered Interest Accounts

Referral Program offers an additional 1% APY for 30, 60 or 90 days depending on your number of referrals

Who is Donut?

Donut is a fintech that specializes in cryptocurrency investments. The founders are Jordan Abderrachid and Neel Popat. It was founded in 2018 and has offices in LA and Berlin. The company has raised Donut has raised $3.8 million in funding over two seed rounds, with the final round in June 2021.

“We believe that most people will have most of their wealth stored in digital assets within the next decade. That could be anything from cryptocurrencies to fractional ownership of art or owning a unique piece of land in virtual reality.” Popat told† “Our mission is to empower anyone to become an investor in that future.”

What do they offer?

Donut allows you to invest in stablecoins and earn interest through cryptocurrency savings. Everything is done via the mobile app.

Save donut automatically

The first way to take advantage of DeFi-powered savings in the Donut app is through Donut through raids. With this feature enabled, Donut rounds up your purchases from an affiliate card and converts your USD into digital dollars (stablecoins, such as DAI) so that those dollars can be used in DeFi markets.

donut plans

You can earn up to 10% APY on savings with Donut (as shown on the Donut website, subject to change). Users currently earn a minimum of 4%, 5%, or 6% APY, depending on the plan they select, as detailed in the table below.

Please note that this is obviously not an FDIC-insured deposit account. Donut can pay a high interest rate by using Compound as a backend provider. At the end of the day, you don’t save, but lend your assets and get interest from borrowers.

When a user deposits cryptocurrency into their Donut savings, it goes through . in a pool of funds Link, a protocol-based platform. This pool of funds, or marketplace, are available for other people to borrow from. Borrowers pay a rate charged by the marketplace. The borrower rate is higher than the borrower rate, so there is a spread that Compound can absorb.

Borrowing/borrowing is done on Compound via Dai (‘DAI’ or ‘Digital Dollars’), a stable currency. Stable coins are cryptocurrencies that try to create stability so that fluctuations common to cryptocurrencies are eliminated.

Imagine if the principal of a loan fluctuated every day? Such fluctuations would make lending impractical. A stable currency ensures that the value of the coin is maintained, making it an efficient vehicle for borrowing and lending purposes. Donut and other startups like Outlet Finance are trying to capitalize on this promised stability by building “high-yield savings” options on top of cryptocurrency lending platforms.

You can deposit and withdraw from your Donut savings at any time. There are no restrictions or costs when it is done through ACH. Deposits can also be set up on a schedule so you don’t have to think about moving money into your savings.

Mobile app

The Donut mobile app is currently only available on the Apple App Store. It’s called “Donut: Save & Invest in Crypto” and has a rating of 4.4 out of 5 out of 34 people. While there is currently no Android app, Donut says it plans to launch on the Google Play Store marketplace on February 14, 2022.

Are there any costs?

Donut does not charge transaction fees. However, Donut charges a 2% backend rate of about 2% per year for his plans, which is quite important.

How do I open an account?

You’ll need to have your phone handy to get your account up and running with Donut, as the company doesn’t currently offer desktop account access. You can download the app and open an account on their website here.

Is my money safe?

Like many other fintechs, Donut is not a bank. However, it has partnered with a bank and another fintech to provide deposit custody services (USD). The bank Donut uses is Evolve Bank & Trust. The fintech Donut is partnering with to use banking services is Synapse Financial Technologies, Inc.

When you deposit cash with Donut, it is FDIC insured. However, once your money is invested in a cryptocurrency, it is no longer FDIC protected. Also, “digital dollars” in Donut savings accounts are also not protected by the FDIC.

Unlike Coinbase and some other cryptocurrency exchanges, Donut has no additional insurance to protect your cryptocurrencies from hacks, theft, or breaches. However, they do use offline or cold storage for larger virtual currency deposits.

Is it worth it?

Those interested in DeFi may find Donut interesting. Even the lowest interest rate that Donut offers (4%) is much more than what is offered on most high-yield savings accounts today.

But we don’t like that Donut charges about 2% per year for its plans, while other companies like Celsius or BlockFi offer similar interest rates with no annual fees. If you want to compare Donut with other crypto savings accounts, check out our favorites here.

donut features

DeFi Powered Interest Accounts

Save: 4%

Build: 5-7%

Grow: 6-10%

1,600+ banks through the Plaid network

Only on cash deposits in USD

Sensitive information, such as a debit card number or financial information, is encrypted using Secure Socket Layer (SSL) technology.

iOS only (Android app launches on February 14, 2022)

Customer service phone number

Monday – Friday: 9am to 6pm (PT)

Referral Program offers an additional APY of 1% for 30, 60 or 90 days depending on your number of referrals

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