Donut savings review
Earn up to 10% APY with this DeFi savings account, but only on iOS.Donut is a savings account that strictly accepts deposits in US dollars (USD). Choose to earn yield from stablecoins, DeFi protocols or a combination of both using decentralized finance — or DeFi.
Depending on which of Donut‘s three plans you choose, you can earn from 4% to 10% APY. But Donut‘s available on iOS devices only, and there are deposit and withdrawal limits.
Minimum deposit to open
At a glance
- Earn variable rates up to 10% APY
- Automatic roundups
- Minimal crypto knowledge required
- Available for iOS only
- Some stablecoin savings accounts offer higher fixed APYs
How Donut worksDonut is best for crypto beginners looking to reap the benefits of cryptocurrency without buying coins. You deposit and withdraw in US dollars, and Donut converts your US dollars into the stablecoin Dai (DAI).Donut offers three plans, two of which rely on the DeFi protocol Yearn.
The APY you can earn depends on the plan:
- Save — Earns a fixed, predictable 4% APY.
- Build — Earns 5% to 7% APY with Yearn
- Grow — Earns 6% to 10% APY with Yearn
Yearn uses algorithms to optimize your yield across various DeFi protocols — most of which aren’t pegged to the US dollar like DAI. Donut compares Yearn to a robo-advisor for DeFi lending, because the service rebalances your assets across various lending platforms based on market fluctuations.
With the Build plan, Donut uses Yearn to continuously allocate 50% of your assets across various DeFi protocols that pay high interest rates. With the Grow plan, 100% of your assets are handled by Yearn.
You can activate a feature that rounds up purchases you make with your credit or debit card, depositing the change into your account to help you more quickly save. You can also earn an additional 1% APY for 30 days for each of the first six referrals you make. A Donut representative confirmed that it’s possible to earn up to 11% APY in this way.
You don’t need to know much about cryptocurrency to earn strong yields with Donut, and the app is designed with a user-friendly, intuitive interface. But it’s for iOS devices only, with no access available for Android users or through a web browser.
Crypto savings accounts like Eco, Linus and Monie offer web-based banking but pay up to 4% APY only.
How to apply for Donut
Sign up for a Donut account in about 5 minutes
- Go to the provider’s site and follow the steps to apply.
- Enter your phone number, then select Get started.
- Check your phone for a text from Donut and follow the link to download the app.
- Follow the instructions to open and link a funding account like Plaid or a bank account with your routing and account numbers.
EligibilityDonut is not available for residents of New York. In addition, the app is available for iOS devices only.
Otherwise, you must be at least 18 years old and a US resident.
You must provide personal information to open a Donut account:
- Full name
- Date of birth
- Email address
- Phone number
- Physical address
- Driver’s license
- Social Security number
How to earn the highest rate with Donut
The amount of interest you earn is tied to the plan you choose: Save, Build or Grow.Donut automatically enrolls you in the Save plan at signup, but you can switch plans whenever you’d like as long as you meet the minimum balance requirement.
|Plan||APY||Minimum balance||Allocation||Risk level|
|Save||4% fixed||$0||100% direct lending||Conservative|
|Build||5%-7% variable||At least $2,500||50% direct lending|
|Grow||6%-10% variable||At least $5,000||100% Yearn||Aggressive|
You can earn additional interest with referrals. Donut will also boost your APY by 1% for 30 days for each of the first referrals who make a deposit.
The 1% boosts don’t stack, so you won’t earn an additional 6% APY if you make six referrals in a month. Instead, your funds earn +1% APY for 30 days per referral, up to a maximum of 180 days.
5 benefits of Donut
- High APY. Earns up to 10% APY with the Grow plan. According to a Donut rep, you can earn up to 11% if you successfully refer at least one person who deposits $10 or more. This rate is among the best APYs we’ve seen on crypto savings accounts that accept USD deposits only. Plus, interest is paid into your account as frequently as every 15 seconds.
- No fees or staking. Donut doesn’t require fees and or minimum balance requirements unless you upgrade your Save plan to Build or Grow. Unlike crypto savings accounts like Yield, Nexo and Crypto.com, Donut doesn’t require you to stake or lock away assets to earn the maximum APY.
- Referral APY bonuses. Donut offers an additional 1% APY referral bonus for 30 days following each of your first six referrals. One referral earns you +1% APY for 30 days, two referrals earn you +1% APY for 60 days, and so on up to +1% APY for 180 days. After their first deposits, your referrals also receive a +1% interest rate boost
- 24-hour APY boosts. Donut offers 24-hour promotional APY boosts throughout the year. A Donut rep confirmed they’ve seen 24-hour boosts offered as high as 40% APY on top of the user’s existing interest rate. So if you’re earning 4% APY with Donut‘s Save plan, a 40% APY boost would mean you’d earn 44% APY for 24 hours. A one-day boost might not seem like much, but when you consider that Donut calculates and pays interest up to four times per minute, you could earn a pretty penny if you have a high balance.
- Automatic roundups. Donut‘s Collect rounds up purchases from linked cards or accounts and deposits the difference into your Donut account. You can activate 2x, 5x or 10x multipliers to accelerate your savings.
How do Donut‘s Collect multipliers work?Donut‘s Collect multipliers can help you accelerate your savings through automatic round ups. To activate this feature, link a credit or debit card to your Donut account. Once the feature is activated, Donut rounds up the purchases you make with your linked credit or debit card to the nearest dollar and deposits the difference into your Donut account.
Say you buy a coffee for $1.50 and pay with your linked debit card. Donut will round up your purchase to $2.00 and deposit the extra $0.50 to your Donut account. The extra $0.50 is money that’s pulled from your linked debit card
To sock away even more money into your Donut account, you can elect to activate a 2x, 5x or 10x multiplier on your Collect roundups. Using that same $0.50 cup of coffee, multipliers could mean that Donut rounds up your purchase by $1.00, $2.50 or $5.00, respectively.
|Purchase price||Roundup amount||Multiplier||Deposit into Donut||Transaction total|
You’re eligible to choose between 1x to 10x multipliers at any point. Before choosing a higher multiplier, confirm that your linked account has a high enough balance to avoid Donut withdrawing more than what’s available.
3 drawbacks of Donut
- Available for iOS only. A support specialist confirms that Donut plans to launch on Android in the future.
- Deposit minimums. Donut accepts deposits of $10 or more, barring smaller transactions.
- Limited ways to move money. Donut supports ACH transfers only. Exchange-based crypto savings accounts like Coinbase and Crypto.com let you liquidate your savings at any time and use it for debit card purchases or ATM withdrawals.
How Donut protects your money
Like all crypto savings accounts, Donut account balances aren’t insured by the FDIC, SIPC or any other regulatory body. Donut partners with the FDIC-insured Evolve Bank to hold your virtual currency in a digital wallet until you want to access it, but federal guidelines do not cover virtual currency.
Like a traditional bank, Donut borrows money deposited into its accounts to lend to other customers. You earn a portion of the interest a borrower pays on the loan as an APY.Donut‘s transparent about its reliance on methods designed to protect the money in your account. Overcollateralization is one such method, which requires borrowers to put up a large amount of collateral — from 1.25 and up to 2 times the amount they are looking to borrow — before approval.
There’s still risk, but because of the high collateral, your original balance is protected theoretically. In the event of a price crash, Donut can liquitize or sell the collateral provided by the borrower, converting the stablecoin DAI back to USD to cover your balance.Donut accounts are encrypted according to AES-256 standards and the app requires two-factor authentication to access your account.
How does Donut compare to a traditional savings account?Donut operates like a traditional savings account, leveraging cryptocurrency to offer APYs that are up to 140 times higher than the national average of 0.07%. You deposit and withdraw in USD by linking an external checking or savings account.
Unlike traditional high-APY accounts, Donut isn’t FDIC-insured and doesn’t have a six monthly withdrawal limit, so you can transfer funds as often as you’d like without any fees or penalties.
How do I deposit or withdraw my money?
The only way to move funds into or out of your Donut account is to initiate an ACH transfer from a linked checking or savings account. This kind of transfer can take three to five days to complete.
You also have the option to automate recurring deposits.
Compare to other crypto savings accounts
Donut reviews and complaintsDonut is new, and so you won’t see reviews with TrustPilot or the Better Business Bureau. The app earns 4.8 out of 5 stars based on 1,000 reviews on the App Store, where several reviewers are positive about customer service.
Many others say they were initially skeptical about Donut, but surprisingly pleased with their earnings after giving the platform a chance.
How to contact Donut about my account?
Contact support in three ways.
- Call 213-377-2982 on weekdays from 9 a.m. to 6 p.m. PT
- Email email@example.com.
- Reach out to a rep in the Donut app or through the website’s support section.
Disclosure: The writer owns a range of cryptocurrency that includes DAI and USDC.
Disclaimer: This information is not financial advice or an endorsement of cryptocurrency or any specific provider, service or offering. Cryptocurrencies are highly volatile and high risk. Do your own research and seek financial advice before buying. And make sure the provider you're interested in is available in your state.