Bitcoin app 21bitcoin has launched a feature that pays customers in Germany and Austria 1.21% annual interest on their idle euro balances, with the option to receive that interest in bitcoin.
How the Bitcoin Bonus works
The product, called the Bitcoin Bonus, is aimed at euros that users have already deposited for upcoming savings plan purchases or for limit orders waiting on a target price.
Interest is calculated daily and credited at the start of the following month after tax, and users can choose to have it automatically converted into sats with no conversion fee.
The balance stays available for purchases and withdrawals at all times, there is no fixed term, and the rate is variable.
21bitcoin explained the reasoning in its announcement:
“This balance already has a purpose. With the Bitcoin Bonus, it gains an additional benefit: as long as it sits in your 21bitcoin account, it can earn interest once activated.”
Interest that can cover trading fees
The company pitched the interest as a way to offset the cost of buying bitcoin.
It wrote:
“Depending on your average balance, holding period, and purchase volume, your interest credits can partially or fully offset any purchase fees.”
In its example, a €10,000 average balance held for one year earns €121 before tax, or €89.09 after Germany’s 26.375% tax deduction.
An instant €1,000 purchase with a referral code carries a 1.29% fee of €12.90, which would leave €76.19 of interest after the fee is covered.
Purchases through Auto-Invest, the app’s recurring dollar-cost averaging tool, already carry 0% trading fees from the eighth day of an active order.
Partner bank and availability
The euro balances are held at Volksbank Raiffeisenbank Bayern Mitte eG, separate from 21bitcoin’s own assets.
21bitcoin said:
“The partner bank provides the interest, which we pass on to you 1:1 with no margin added.”
The company added that customers’ existing bitcoin is not lent out to generate the yield.
Users can switch the feature on by tapping “Activate interest” in the app and choosing between a euro or bitcoin payout.
The company also noted that bitcoin is subject to significant price fluctuations and that the German tax deduction does not automatically settle obligations in a user’s country of residence.
