Can you save with Binance?

thor

I was talking about savings to a friend today and he mentioned that Binance offer fixed rates of over 6%. I had never heard of them before but have since found out that they have something to do with crypto currencies and that immediately puts me on alert. I told him that these kind of rates are too good to be true of savings accounts and there must be a chance that you could lose your money like you can with stocks and share investments. He seemed to think that they were FSCS covered and hence safe. I know that this can't be true because otherwise everyone would be dashing their money in to this so can I ask what the pro and cons are with Binance savings?

underground99

No, binance isn't a UK regulated deposit taking institution like a bank so you won't get FSCS protection for cash kept in accounts with them, and exchange tokens like bitcoin are not covered by FSCS protection.

Various crypto businesses do offer 'staking' where you can earn a share of income, in crypto, for leaving your crypto coins with them. So you could use Binance to earn a return on something like USDT or USDC on either a fixed term or flexible basis at 6%, but the returns aren't being made in GBP, so getting 6% more of the coin does not mean you definitely have 6% more GBP. Likewise you can borrow crypto. People are doing things with crypto that they do with real money. But they are not doing it with FSCS protection; there is risk of failure.

Eyeful

Savings accounts which are covered by the FSCS scheme up to £85k come from
 NS&I, Banks, Building Societies.

The best 5 year bond is = 1.4%                           . 

So you can safely say,           Rate = 6%
(a) This is a risky investment
(b) Will not be and covered by the FSCS scheme, as they are not a Bank or Building society

DrSyn

Investments are not covered By the FSCS Scheme.

Investing in the FTSE 100 gives a yield = 3%

Rate = 6%

This means investment here is twice as risky as investing with the 100 largest companies in the UK! 

Gary1984

Crypto isn't savings. If you want the best safe savings accounts look here:

https://www.moneysavingexpert.com/savings/

Don't believe anything that offers fixed rates that are too good to be true (pretty much anything over 1.5% right now). 

HansOndabush

If Binance can pay 6% then why don't they just take a loan, buy their own coins, and pay themselves?

Most likely because it is not sustainable.

Eco_Miser

Eyeful said:

Savings accounts which are covered by the FSCS scheme up to £85k come from
 NS&I, Banks, Building Societies.

The best 5 year bond is = 1.4%                           . 

So you can safely say,           Rate = 6%
(a) This is a risky investment
(b) Will not be and covered by the FSCS scheme, as they are not a Bank or Building society

It's not just banks and building societies that are covered for deposit protection by the FSCS, Credit Unions are too. NS&I are not covered by the FSCS, they are directly covered by the government, i.e. the taxpayer.

Eyeful

Eco_Miser said:

Eyeful said:

Savings accounts which are covered by the FSCS scheme up to £85k come from
 NS&I, Banks, Building Societies.

The best 5 year bond is = 1.4%                           . 

So you can safely say,           Rate = 6%
(a) This is a risky investment
(b) Will not be and covered by the FSCS scheme, as they are not a Bank or Building society

It's not just banks and building societies that are covered for deposit protection by the FSCS, Credit Unions are too. NS&I are not covered by the FSCS, they are directly covered by the government, i.e. the taxpayer.

Most people do not use Credit  Unions which is why I did not mention them.
May be I should have made clear that NS&I is covered up to 100%!

Eco_Miser

Eyeful said:

Eco_Miser said:

Eyeful said:

Savings accounts which are covered by the FSCS scheme up to £85k come from
 NS&I, Banks, Building Societies.

The best 5 year bond is = 1.4%                           . 

So you can safely say,           Rate = 6%
(a) This is a risky investment
(b) Will not be and covered by the FSCS scheme, as they are not a Bank or Building society

It's not just banks and building societies that are covered for deposit protection by the FSCS, Credit Unions are too. NS&I are not covered by the FSCS, they are directly covered by the government, i.e. the taxpayer.

Most people do not use Credit  Unions which is why I did not mention them.
May be I should have made clear that NS&I is covered up to 100%!

Eyeful said:

Eco_Miser said:

Eyeful said:

Savings accounts which are covered by the FSCS scheme up to £85k come from
 NS&I, Banks, Building Societies.

The best 5 year bond is = 1.4%                           . 

So you can safely say,           Rate = 6%
(a) This is a risky investment
(b) Will not be and covered by the FSCS scheme, as they are not a Bank or Building society

It's not just banks and building societies that are covered for deposit protection by the FSCS, Credit Unions are too. NS&I are not covered by the FSCS, they are directly covered by the government, i.e. the taxpayer.

Most people do not use Credit  Unions which is why I did not mention them.
May be I should have made clear that NS&I is covered up to 100%!

True, but you specifically said "Will not be  covered by the FSCS scheme, as they are not a Bank or Building society" which certainly implies that only Bank & Building Societies are covered, which could be worrying for the many people who do use Credit Unions.

Eyeful

1. At one time Credit Unions where not covered by the FSCS scheme, while banks & building societies where. 
2. People who now open up accounts at Credit Unions are told they are covered by the FSCS  scheme.
3. Credit Unions will be sending out yearly the  FSCS scheme, information sheet as do banks & building societies.

4. Those that use Credit Unions can confirm they are covered by the scheme by using this checker
https://www.fscs.org.uk/check-your-money-is-protected/

5.Worried persons would have posted on this site asking if they are covered by the FSCS scheme.

So I do not really think my leaving the Credit Unions out of my original post would cause them to be worried.

If it makes you any happier I will include Credit Unions, as well banks or BS in future posts.

thor

HansOndabush said:

If Binance can pay 6% then why don't they just take a loan, buy their own coins, and pay themselves?

Most likely because it is not sustainable.

This is exactly what I told my friend but he seemed convinced that investing via binance was safe and certainly much less risky than stocks and shares.