• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
Cult Of Money

Cult Of Money

Personal finance for the crypto-curious.

  • About
  • Podcast
  • Contact
  • Cryptocurrency
      • How To Start

      • What Is Cryptocurrency And How To Invest?
      • What Is Bitcoin And How Does It Work?
      • What Is Ethereum And How Does It Work?
      • Most Common Crypto And NFT Scams (And How To Avoid Them)
      • Proof Of Work vs. Proof Of Stake vs. Proof Of History
      • How To Invest In Crypto In Your IRA Or 401k
      • Tools + Resources

      • Best Cryptocurrency Exchanges
      • Best Cryptocurrency Wallets
      • Best Crypto Savings Accounts
      • Best Tax Software For Crypto And NFT Traders
      • Reviews

      • Coinbase Review
      • Gemini Review
      • BlockFi Review
      • Binance Review
      • Hodlnaut Review
      • Ledger Wallet Review
  • DeFi
      • How To Start

      • What Is DeFi?
      • What Is Staking Your Crypto?
      • Centralized vs. Decentralized Exchange
      • Tools + Resources

      • Uniswap Review And How Do Decentralized Exchanges Work?
      • Reviews

  • NFT
      • How To Start

      • What Is An NFT?
      • Tools + Resources

      • Most Popular Play-To-Earn Crypto Games
      • Popular Projects

      • What Are VeeFriends And Are They Worth It?
      • Bored Ape Yacht Club NFTs Are Popular (And Expensive)
      • What Is The Sandbox And How Can You Play?
      • Why Visa Bought A CryptoPunk
  • Investing
      • How To Start

      • Tools + Accounts

      • Reviews

  • Personal Finance
      • Banking

      • Best Bitcoin Rewards Checking Accounts
      • Tools + Resources

      • Tax

      • Income Tax Prep Guide
      • Bookkeeping And Accounting For Crypto And NFTs
Interest Accounts

PennyWorks Review – Can You Really Earn 7.5% APY?

By Tom Blake • June 19, 2023

At The Cult of Money, we want to help you navigate your finances. To do this, many or all of the products featured here may be from our partners whom we receive compensation from. This doesn’t influence our evaluations or reviews. Our opinions are our own. Learn more here.Advertiser Disclosure

There are thousands of financial products and services out there, and we believe in helping you understand which is best for you, how it works, and will it actually help you achieve your financial goals. We're proud of our content and guidance, and the information we provide is objective, independent, and free.

But we do have to make money to pay our team and keep this website running! Our partners compensate us. CultOfMoney.com has an advertising relationship with some or all of the offers included on this page, which may impact how, where, and in what order products and services may appear. The Cult of Money does not include all companies or offers available in the marketplace. And our partners can never pay us to guarantee favorable reviews (or even pay for a review of their product to begin with).

For more information and a complete list of our advertising partners, please check out our full Advertising Disclosure. CultOfMoney.com strives to keep its information accurate and up to date. The information in our reviews could be different from what you find when visiting a financial institution, service provider or a specific product's website. All products and services are presented without warranty.

PennyWorks review

In the crypto world, there are plenty of options to generate passive income by holding digital assets.

Staking and yield farming are two prime examples. However, over the last few years, we’ve seen the unfortunate rise and fall of many crypto lending platforms that promised massive returns for investors but took on too much risk to remain solvent.

Thankfully, there are still companies in the lending space that take a more conservative approach to balancing risks and rewards for investors.

One of these companies is PennyWorks. This U.S. company lets investors earn up to 7.5% APY by converting their fiat into stablecoins which it lends out in collateralized loans. And with no management fees or lock-in fees, it’s an appealing option for more risk-averse investors.

That said, it’s still important to understand how this platform works and what the risks are before signing up. That’s why our PennyWorks review is covering everything you need to know about this passive income opportunity.


PennyWorks logo

Quick Summary

  • Lets you earn up to 7.5% APY
  • $500 minimum deposit to earn
  • Available to accredited U.S. investors in 50 states
OPEN AN ACCOUNT

Pros

  • A low $500 minimum deposit to earn interest
  • PennyWorks utilizes stablecoin lending to help reduce risk
  • Earn up to 7.5% APY with no lock-up period

Cons

  • Stablecoin lending still carries some risks
  • PennyWorks Notes aren’t FDIC-insured
  • PennyWorks is only open to accredited investors in the United States

Table of Contents
About PennyWorks
How Does PennyWorks Work?
PennyWorks Pricing & Fees
PennyWorks Alternatives

PennyWorks Account Opening
Safety & Security
PennyWorks Support & Customer Service
The Bottom Line

About PennyWorks

PennyWorks is a U.S. financial platform that began in 2021. The company offers a high-yield, decentralized finance (DeFi) product that lets investors deposit $USD to earn daily interest. And PennyWorks’ main attraction is that it lends out investor’s capital with stablecoins in collateralized loans to help mitigate risk.

Considering that we’ve seen major collapses and bankruptcy filings from crypto lending platforms like BlockFi and Celsius, risk mitigation certainly seems like a warranted mission statement.

PennyWorks’ reliance on stablecoins is also reassuring since stablecoins like USDC and DAI are pegged to the $USD. So at the very least, it’s lending out digital assets that tend to have more stable prices versus obscure altcoins.

How Does PennyWorks Work?

PennyWorks is available to accredited investors in the United States and is free to sign up for. It’s also available in all 50 U.S. states, which isn’t the case for many staking and lending platforms that are often prohibited in several states.

If you decide to make a deposit, here’s how PennyWorks begins generating returns with your investment:

  1. You deposit $USD into your PennyWorks account to purchase Notes
  2. PennyWorks converts your fiat into stablecoins that are pegged to the $USD, such as USDC and USDT
  3. PennyWorks lends out stablecoins via collateralized loans to generate interest
  4. Interest accrues daily and you can cash out anytime since there’s no lock-in period
How PennyWorks works

Image courtesy of PennyWorks.

There’s no minimum deposit requirement either. However, deposits under $500 don’t generate any yield. How much you generate depends on the total value of $USD you deposit, and PennyWorks has three different tiers:

$500 - $99,999

$100,000 - $299,999

$300,000+

5.5% APY

6.5% APY

7.5% APY

Earning at least 5.5% APY should be possible for most investors. This is higher than most high-yield savings accounts on the market, and PennyWorks can even pay up to 7.5% APY for large account balances.

And again: two main selling points are the use of stablecoins to reduce risk and the ability to withdraw funds instantly. Interest also accrues daily so you begin generating returns quickly.

PennyWorks Pricing & Fees

PennyWorks doesn’t charge any account fees or active management fees for investors. In fact, investors don’t pay any platform fees at all. I assume PennyWorks takes a cut of the yield it generates and passes on the rest to investors.

Deposits and withdrawals are also fee-free, although you can pay bank fees depending on your bank. There’s also a $15 wire transfer fee for outgoing wire transfers that occur more than once a month.

PennyWorks Alternatives

In the last year or two, numerous crypto lending and staking platforms have gone out of business. Many platforms have also had liquidity issues and paused withdrawals for certain periods of time, especially following FTX’s collapse.

That said, there are still reputable crypto exchanges and lending platforms you can use to generate yield. Some of our favorite PennyWorks alternatives include:

  • Binance: The largest cryptocurrency exchange in the world that also offers staking with 15 different cryptocurrencies, including Bitcoin, Ethereum, and USDT.
  • Crypto.com: Another crypto exchange that lets you generate yield with 20+ stablecoins and crypto.
  • Nexo: One of the leading lending platforms on the market that supports over 60 cryptocurrencies.

PennyWorks Account Opening

You have to be an accredited investor to open an account with PennyWorks. This means you must meet at least one of the following requirements:

  • Have an annual income of $200,000 or more for the last two years
  • Have a joint household income of at least $300,000 for the last two years
  • Have an individual or joint net worth of at least $1 million, excluding the value of your primary residence

If you meet these requirements, you can get started. At this time, PennyWorks offers individual taxable accounts, business entity accounts, and IRA accounts. To sign up, you choose your account type and create your account with your email and phone number.

PennyWorks takes approximately 24 to 48 hours to verify your account and follows Know Your Customer (KYC) requirements. After verification, you can fund your account to purchase Notes with ACH or wire transfer payments.

Safety & Security

PennyWorks’ mission is to provide easy access to DeFi lending and income opportunities while lowering risk. The use of stablecoins and no lock-up periods certainly helps the company in achieving this goal. But PennyWorks’ main security feature is the fact it collateralizes loans.

A collateralized loan means that borrowers have to put up collateral to back their loan. In the event the borrower becomes insolvent or becomes too risky for the lender, their funds are automatically liquidated to help cover the loan.

PennyWorks security

Image courtesy of PennyWorks.

Traditional lenders use this system as well. And PennyWorks only works with specific DeFi protocols to improve safety. According to its website, “Extensive risk management procedures have been set up in order to vet various protocols in the decentralized web ecosystem (web3) and help ensure that funds are only placed in responsible protocols with proven track records.”

The result is that PennyWorks only deals with reputable blockchains, like Ethereum and Polygon, and more trusted DeFi protocols like AAVE, Compound, and Uniswap.

However, PennyWorks Notes aren’t FDIC-insured. If the platform goes under because of poor risk management or other factors, investors are going to be left holding the bag.

The fact you don’t have to lock-in money to get decent rates is quite reassuring. However, never deposit more money than you can afford to lose when it comes to DeFi lending.

PennyWorks Support & Customer Service

You can reach PennyWorks’ customer support by calling 848-420-8350.

At this time, PennyWorks doesn’t have a Trustpilot rating and isn’t an accredited Better Business Bureau business. It seems the company is fairly new and there aren't many online reviews yet from customers, so keep this in mind.

The Bottom Line

Despite the turbulence the DeFi world has experienced in the last year, there are still exciting opportunities in the space. And companies like PennyWorks offer a refreshing, much-needed change in business model with its focus on risk-mitigation and stablecoin usage.

That said, DeFi investments and crypto savings accounts aren’t without risks. Your money isn’t FDIC-insured with PennyWorks, and there’s no promise of returns. A lack of lock-up times and daily interest payments are reassuring, but you should never deposit more money than you can afford to lose.

Tom Blake
Tom Blake

Tom Blake is a personal finance writer with a passion for making money online, cryptocurrency and NFTs,  investing, and the gig economy.

Editorial Disclaimer: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, or other advertiser and have not been reviewed, approved or otherwise endorsed by any of these entities.

Comment Policy: We invite readers to respond with questions or comments. Comments may be held for moderation and are subject to approval. Comments are solely the opinions of their authors’. The responses in the comments below are not provided or commissioned by any advertiser. Responses have not been reviewed, approved or otherwise endorsed by any company. It is not anyone’s responsibility to ensure all posts and/or questions are answered.

Subscribe
Login
Notify of

0 Comments
Inline Feedbacks
View all comments

Primary Sidebar

  • Facebook
  • Instagram
  • Pinterest
  • RSS
  • Twitter
  • YouTube

Editor’s Picks

  • 8 best cryptocurrency exchanges ranked

    8 Best Cryptocurrency Exchanges Ranked For 2023

  • crypto savings accounts

    5 Best Crypto Savings Accounts For 2023

  • Cryptocurrency Bonus Offers

    10 Best Crypto Promotional And Bonus Offers

  • best crypto wallets

    Best Crypto Wallets For 2023 (Software And Hardware Options)

  • Best Portfolio Trackers For Cryptocurrency And Stocks

    6 Best Portfolio Trackers For Cryptocurrency And Stocks

  • best tax software for crypto and NFT traders

    Best Tax Software For Crypto And NFT Traders In 2023

Popular Posts

  • proof of work vs. proof of stake vs. proof of history

    Proof Of Work vs. Proof Of Stake vs. Proof Of History

  • Why I Bought An NFT

    Why I Bought An NFT [And 5 Reasons You Should Too]

  • My Dogecoin Experiment: What I Learned From Investing $2,000 In DOGE

  • common crypto and nft scams

    Most Common Crypto And NFT Scams (And How To Avoid Them)

  • Bookkeeping and Accounting for Crypto and NFTs

    Bookkeeping And Accounting For Crypto And NFTs

  • what is a 51% attack

    What Is A 51% Attack? (And How Is That Game Over For Crypto?)

  • what is staking crypto

    What Is Staking And How Can You Make Money With Your Crypto?

  • what are veefriends

    What Are VeeFriends And Are They Worth It?

  • how to file a complaint against crypto exchanges

    How To File A Complaint Against A Crypto Exchange [Crypto Regulators]

Footer

Pages

  • Best Cryptocurrency Wallets
  • Best Cryptocurrency Exchanges

Categories

  • Cryptocurrency
  • DeFi
  • NFT
  • Personal Finance

About

  • About The Cult Of Money
  • Contact
  • How We Make Money
  • Advertise With Us
  • Facebook
  • Instagram
  • Pinterest
  • RSS
  • Twitter

Copyright © 2023 | Cult of Money | Privacy Policy | Terms of Service

wpDiscuz