This one’s going to be juicy cheapskates. I mean after all, if the statement in the title is correct and you can get a cool 12% return on your cold hard cash, the question becomes, why bother investing at all? No more picking stocks, no more checking the markets, no more watching the pro es go up and down. Just collect your 12% each year and watch that pot grow into a fortune right?
Well, there is a company offering just that, enter NEXO. If you haven’t heard of Nexo, they’re a pretty big deal. They are the biggest crypto lender in the world (they just provided their first crypto backed mortgage for 1.2M!) but also provide savings accounts, exchange services and more. When we saw the pretty hefty numbers they were offering, we had to take a closer look, so we’ve been using the app for the last month and deposited a variety of currencies to see if they are the real deal. Ready to see if Nexo is the next best thing? Let’s go.
As always, the following is not financial advice, read our disclaimer
Want to skip ahead to a specific part? Use the links below
- What they’re offering
- The app interface
- Loyalty levels and Nexo token
- Earning 12% on GBP
- Earning on crypto and stable coins
- Sending money to Nexo
- Our final thoughts
So, before we dive into the app, let’s just confirm exactly what NEXO are offering. For the purposes of this review, we will be discussing the EARN and EXCHANGE features only. We haven’t tried out any of Nexo’s borrowing (and don’t plan to either, short term high interest borrowing isn’t something we condone here at CI). We also won’t be talking about Nexo’s debit card because at time of writing, it isn’t available in the UK (though it previously was available to UK users during the early access launch and a wait list was available to UK users until the app was updated)
A quick search on Nexo’s website shows us that they are offering when using the EARN feature:
- UP TO 12% on fiat
- UP TO 12% on stable coins
- UP TO 8% on crypto
Hmmmm, ‘up to’. Feels like there’s a catch coming… more on that later.
Nexo also provides exchange services on a decent but relatively small selection for crypto coins, stable coins and fiat currencies. Most of the big names are there so if you’re not too concerned with having access to some of the smaller alt-coins on the exchange then you should be covered. Full list of crypto pairs offered can be found HERE
The app interface
When it’s comes to the world of finance, it’s rare to come access an app that has great functionality but is also simple to use but Nexo manages this feat pretty well.
The interface is slick, acting just like a digital wallet that most banking app users would be used to, with the dashboard showing your total balance (all of your available currencies are totted up into this balance and shown in USD), the interest you have accrued (interest is accrued and paid daily) and your available loan amount (we won’t be covering that in this article)
The remainder of the options such as exchange (which allows you to exchange between 2 currencies), wallet (giving you a breakdown of each currency you’re holding, along with option to top up) and card (showing the details of your Nexo card of you have one) are clearly tabulated and intuitive to use.
However, it’s not all roses….
There are a few drawbacks we thought we would mention.
The sign up and verification process is long, difficult to get through and in our experience, extremely glitchy. In fact, we found the entire app experience pretty darn glitchy. Numerous times during sign up, we were confronted with a loading wheel which never ended, causing the app to crash and even logging in now can sometimes get stuck, prompting us to close the app and try again. The app is still very usable once logged in, but it can be annoying. Note though that at time of writing, there has been a very recent update to the app that may prove successful at treating these issues.
The other thing to mention is, the loyalty system…
Nexo Token and Loyalty System
We thought this part of the app required a specific section because it can get a little confusing but is essential to understand before putting any real money into the platform. You see, Nexo operates a loyalty system where owning a higher proportion of ‘Nexo tokens’ in your portfolio unlocks better rates and privileges. The Nexo token is the native coin of the nexo system and is essentially a rewards token where the higher ratio of tokens you own compared to your other assets, the more benefits you receive from the Nexo ecosystem. Other than that, we can’t see that the token has any other utility, note though that the token can also be traded on Huobi and Binance exchanges against other crypto assets. You can find out what Nexo have to say about their token here:
The problem with this is, unless you are prepared to own some Nexo tokens, the very best rates are going to be off limits. The loyalty tiers for the nexo platform work as follows:
|Base (Less than 1% nexo)||Silver (1-5% nexo)||Gold (5-10% nexo)||Platinum (10% or more nexo)|
|APY on crypto||4%||4.25%||4.5%||5%|
|APY on fiat||4%||4.25%||5%||6%|
|APY on stable coins||8%||8.25%||9%||10%|
|Number of free withdrawals per month||1||2||3||5|
As you can see, the amount you need to own is relatively low, but owning 10% of your portfolio in a crypto currency that doesn’t seem to have any other utility than to earn additional rewards seems a risk too far for us. We do feel though that even the base level loyalty has some very decent returns.
But wait, doesn’t the title say 12% interest on fiat?
Well remembered! Which brings us nicely onto the part we’ve been waiting for – can you really earn 12% on your GBP (or USD or EUR)?
Earning 12% on fiat
So can you? Well, the short answer is – yes, you can! However, there is a long answer…
As you can see from the table above, becoming a platinum member by dedicating 10% of your Nexo account to the Nexo token will only get you to 6%. So where does the other 6% come from?
First thing to mention is that in all of the cases in the table above, Nexo will give you an additional 2% interest on top of the stated interest if you are prepared to take your interest in Nexo tokens. That’s right, after making you convert 10% into Nexo, you now need to take your interest in Nexo! Note that interest paid this way is paid at that days equivalent Nexo price so your return can fluctuate if you hold onto those Nexo tokens. It’s also worth noting that if you opt to earn your interest in Nexo, this will apply to every currency you have in Nexo, you can’t pick and chose which ones to earn nexo tokens on and which ones to earn in kind.
OK, but that only gets us to 8% return, where does the other 4% come from?
The good news is, getting the last 4% is pretty easy and something we would recommend. If you are prepared to lock your funds in (currently 3 months for fiat) then Nexo will give you an additional 4% interest! We’re long term investors, so locking funds for 3 months to earn a guaranteed 8-12% APY is something we are happy to do.
So the takeaway here is that yes, you can get 12% interest, but we think getting the 8% is more achievable for your every day investor because you don’t need to hold any Nexo tokens and you’ll earn your interest in the same currency you’re saving.
Earning on Crypto and Stable coins
If you’re someone who has a range of crypto currencies and stablecoins in their portfolio then you could technically hold them all in Nexo and earn interest on them all, all in one place.
However, as you can see in the chart above, the interest rates you receive on crypto currencies isn’t quite as good as fiat or stable coins. Looking at the coins that Nexo support, we think you are better off staking / saving your crypto elsewhere for better returns (see our article HERE that explains staking). We currently use Binance for this and are currently seeing some great returns. For example, we’re currently getting 11.9% staking DOT in Binance and getting 7% on BTC by saving in Binance. You can sign up for a Binance account using the link below:
However, we think the 8% standard rate you can get on stable coins (like USDT or our personal fave USDC) is very decent indeed. All this without even having to lock in! So if you’re holding any stable coins, it may be worth trying out Nexo (we’re currently getting 8% on USDC).
It’s worth noting though, that as long as you’re happy to lock in, we would still recommend saving fiat like GBP, because you won’t incur a fee in changing it to your stable coin of choice.
Transferring money to and from Nexo
The good news here is, that sending money to Nexo is pretty straight forward. Upon singing up, Nexo will automatically generate a UK bank acc number, sort code and ref number so that you can deposit GBP easily into Nexo through a faster payments bank transfer, no debit card required!
This is handy because as well as being fee free, it’s pretty secure. Note however that in our experience that transferring funds to Nexo can take longer than you might expect elsewhere. We have seen transfer times anywhere from 6 hours to 2 days.
Withdrawing fiat from the platform is just as simple (if not simpler) and can be initiated by clicking the withdraw button in the wallet tab. We find that transfer times are roughly the same as the deposit time, so be aware of that.
You’ll notice in the loyalty section on nexo (and in the chart above) that it makes reference to the number of free withdrawals permitted per month. However, this only applies to crypto currencies (actually, any free crypto transfers is pretty decent) and does not apply to fiat – you can withdraw as much GBP, EUR and USD as you want in a month.
OK we’re going to come right out and say it – don’t use Nexo for exchanging.
First off – the good points. Having a facility to exchange one currency for another directly in the app is great and opens the app up into a real powerhouse. Nexo also state that it is fee free and technically – it is! Nexo don’t charge a spot trade fee for swapping currencies.
However….. although Nexo market this service as fee free, in our experience, it isn’t. Far from it in fact. Take for example Binance, where we are currently paying a fee of 0.075% per trade, plus whatever the spread is at that time and potential slippage. The spread is the difference between what the lowest sell price is and the highest bid price (basically there’s a constant negotiation between buyers and sellers, and if you want to make a trade instantly, you risk paying this small difference). Slippage occurs when you’re making a large order and there isn’t quite enough sellers at the price you want to satisfy your order, so other sellers who are asking a higher price may be needed to help fill the order. In the case of Binance, the spread and slippage is negligible because of the volume of trades happening at Binance is massive (it’s the biggest exchange in the world).
In contrast, Nexo make money from their exchange service by giving trades an artificial spread. They don’t technically have an exchange and merely swap whatever coin you want to sell for whatever coin you want to buy using their own liquidity. Doing this, they set their own prices on what you will receive, basically buying from sellers at a lower price and selling to buyers at a higher price. In our experience, we have found the total fees including spread to be around 2% with Nexo. We prefer to either stick to fiat in Nexo, or transfer stable coins into our nexo wallet from an exchange like Binance (mind those gas fees though!).
Our final thoughts
So there you have it, a pretty lengthy review on our experience using Nexo so far.
We’ve got to say, although we found some drawbacks with the loyalty system and the exchange feature – especially with crypto currencies, we’re really impressed with what Nexo are doing. This is a AAA platform with some awesome returns to boot and we will be using nexo to hold a portion of our portfolio for the coming months. We don’t think it can fully replace a comprehensive crypto app like Binance, but it is certainly a great add-on to our strategy, especially when we’re holding more cash than usual!
We hope to see a few things from Nexo over the coming year – namely more interaction with UK regulators and authorities, a card offering for UK users and maybe tighter spread on the exchange, but we’re exited to see what’s to come.
If you’d like to sign up for a Nexo account, you can sign up using the link below and receive $10 worth of BTC! Nice!
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