Contributor, Benzinga
August 26, 2022
Penny Works
Overall Rating:
securely through Penny Works's website

PennyWorks is a unique platform that allows you to easily earn interest through investments powered by collateralized lending. Unlike cryptocurrency exchanges, you don’t need to have prior knowledge of the crypto market or how to manage risk across this alternative asset class. Instead, you purchase PennyWorks Notes, and PennyWorks generates income through providing collateralized loans of digital assets. This business is similar to auto and home loans, but instead of the car or home serving as collateral, it’s digital assets. In turn, you receive a higher interest rate based on the funds in your account and the amount of time you take between redemption. You can earn up to 6% annual percentage yield (APY) — much more than you’d see keeping your money in bonds, savings accounts or other investment opportunities.

While PennyWorks provides an excellent platform for investors to diversify their holdings, it does not offer active trading services. Investors who want exposure to yields without having to commit to a long term lock up will get the most out of PennyWorks. 

Best For
  • Investors who prioritize low-risk investments
  • Traditional investors looking to offset the impact of inflation
  • Anyone looking for a passive way to earn interest income
  • Can earn up to 6% APY
  • Interest is paid daily
  • No lock-up period; can redeem investments at any point
  • No cryptocurrency experience required; beginner-friendly
  • PennyWorks Notes are compliant with Securities and Exchange Commission (SEC) regulations
  • Only available for accredited investors in the United States

Penny Works Ratings at a Glance

PennyWorks Customer Service
PennyWorks Security
PennyWorks Pricing and Fees
PennyWorks User Benefits
PennyWorks User Experience
PennyWorks Overall

PennyWorks Product Offering

While cryptocurrency may be all over the news, it can sometimes be an intimidating asset to purchase if you aren’t prepared to stomach the volatility of the market. If you’re looking for a way to begin taking advantage of cryptocurrency yields in a low-risk environment, you may want to explore PennyWorks. PennyWorks is a high-yield investment platform that allows you to earn interest through collateralized lending. These investments have the potential to help you earn up to 6% APY depending on the amount of money you invest and how long you keep it in your account.

As the name suggests, stablecoins are less risky than the overall cryptocurrency market. They are designed to be pegged to an underlying asset — typically a fiat currency like the US Dollar. The goal of the stablecoin is to retain the same value indefinitely. In other words, if you have a single token that is pegged to the USD, it should be worth $1 now and $1 ten years from now. Not all stablecoins are created equal; some are pegged based on algorithms that follow complex underlying digital assets. PennyWorks only lends stablecoins with proven track records that are pegged to the US dollar ensuring your funds maintain a low-risk profile.

As an example, you can take a look at Tether (USDT), the most commonly held stablecoin in the world pegged to the USD in a 1-to-1 ratio. Tether is issued by Hong Kong-based company Tether and aims to provide the community with an asset-backed option that’s compatible with multiple blockchains. The company said it owns around $286 million in non-U.S. government bonds as well as more than $39.2 billion of U.S. Treasury bills. These are the assets that back Tether and enable its tokens to maintain value. Compare this with standard cryptocurrencies that are not backed by any type of asset, and you can see why more cautious investors tend to be interested in stablecoins. 

PennyWorks has taken advantage of this stability to give its platform users an easier way to access higher interest rates through collateralized lending. With PennyWorks, you don’t need to have any type of experience with decentralized finance (DeFi) or even cryptocurrency to begin earning interest on cryptocurrency loans. These loans help you see higher yields than you would see interest earned on a savings account, providing you with direct access to cryptocurrency investing without the traditional risks that come with crypto. Here’s how it works.

  • Create an account: Getting started with PennyWorks is exceptionally simple — most users will be able to open an account in 10 minutes or less. Create your account and provide a funding method for your investment.
  • Invest USD: Fund your PennyWorks Notes using ACH or Wire. PennyWorks will convert the dollars into stablecoins. PennyWorks then lends out these stablecoins on a collateralized basis, which provide a high yield with low risk on the part of the lender.
  • Earn interest: You can earn up to 6% APY on your investment depending on the balance of your account and the amount of time that it’s been since your last withdrawal. Users who redeem after 90 days earn the highest rates. When you earn interest, you’ll see it directly in your PennyWorks account dashboard.

Many new cryptocurrency investors are concerned about crypto lending because they believe that they will need to lock their coins or tokens with their broker for a specific period of time. When you invest in PennyWorks Notes, you are free to redeem your funds at any point. PennyWorks requires no minimum waiting period to begin earning interest. However, you can earn higher interest rates by redeeming your funds only occasionally.

PennyWorks Customer Service

PennyWorks provides you with multiple methods that you can use to get in touch with its customer service team.

Via live chat: Live chat services from PennyWorks are available throughout the business week. If you need assistance but live chat services are not available, you can also leave your email address with PennyBot, PennyWorks’ virtual customer service robot. A customer service professional will reach out by email as soon as possible.

FAQ: Before you contact customer service, you might want to take a look at PennyWorks’ FAQ page here. This FAQ includes answers to some of the most common questions that PennyWorks users frequently have. The page can provide you with a time-efficient answer to your most common questions. PennyWorks also offers a series of educational options to learn more about the platform’s special features and how you can make the most out of your account.

Social media: You can get in contact with PennyWorks via the company’s Instagram account or Twitter profile. You’ll need to already have a corresponding social media account on each respective site or be prepared to make a free account to use this contact method.

Live demos: You can schedule a live demo with the support team to walk you through the platform or provide dedicated help for onboarding.

PennyWorks Security

PennyWorks uses your investment to provide collateralized loans. These loans are more easily accessible than cash loans, and digital assets are useful for more decentralized applications on the side of the borrower. This convenience and ease of access are part of why the yields offered by PennyWorks are significantly higher than everyday savings accounts.

PennyWorks uses lending protocols that require its borrowers to put up collateral worth more than the value of the cryptocurrency it lends out before funding the loan. This practice makes borrowers highly motivated to return their loan — and by extension, your investment. PennyWorks also ensures that the platforms have sufficient assets to allow you to withdraw your money at any time. PennyWorks is a U.S.-based company, which means that it is easily held accountable to U.S. regulations.

PennyWorks Notes purchased on the PennyWorks platform are not FDIC insured, as it is not required for this type of lender. The platform is very focused on security and all users who purchase the minimum $25,000 receive a physical multi-factor authentication (MFA) security key. These devices offer one of the strongest forms of security against unauthorized access and add another level of protection to the account.

PennyWorks Pricing and Fees

Two major factors dictate the interest rate you’ll earn on assets held in your PennyWorks account.

  • Funds: Users who maintain a balance of at least $300,000 earn the best rates.
  • Time since your last redemption request: If you’re able to wait longer than 90 days between redemption periods, you’ll start earning the most advantageous rates.

Here’s what you can currently expect to receive for your investment through PennyWorks based on the funds in your account and how often you request redemptions.

Days since last redemption request$25,000 to $99,999$100,000 to $299,999$300,000 and more
0 to 29 days4.00%4.50%5.00%
30 to 89 days4.25%4.75%5.50%
90 days or more4.50%5.00%6.00%

All interest rates are quoted in APY. The effective interest rate that you will see on your PennyWorks account is calculated based on the prior day’s outstanding principal amount and the length of time since your last redemption.

A very important point to note — you will only earn these rates when you have a total balance of at least $25,000 in your investment account. If your account has less than the required $25,000 minimum investment, you will earn a flat rate of 0.5% APY. Keep this in mind as you decide when and how to take profits.

You can redeem the interest on your crypto investments via wire transfer or ACH transfer. There is no fee to withdraw funds via ACH transfer, but you will need to pay a $15 outgoing transfer fee on wire transfers. PennyWorks does not charge an account maintenance fee. 

PennyWorks User Benefits

PennyWorks is different from both traditional savings accounts and normal cryptocurrency exchanges. Some of the benefits that this platform offers over its competitors include the following.

No prior cryptocurrency knowledge required: Never done any research on cryptocurrency but looking for a way to add it to your portfolio? PennyWorks might be the right answer for you. When you create an account with PennyWorks, you won’t need to figure out which coins and tokens you should invest your money in. Investors who want to learn more about cryptocurrency but invest in the market now will enjoy PennyWorks’ streamlined, no-jargon platform.

Stable investments: Cryptocurrencies are volatile assets, which typically doesn’t make them a great choice for investors who are looking to buy and hold. To manage this risk, PennyWorks converts your funds into a stablecoin backed by USD. Stablecoins do not fluctuate in value on a daily basis because, unlike traditional cryptocurrencies, there is an asset backing the price of each coin. Investors who are searching for low volatility options will receive a high level of stability when they invest in the PennyWorks Notes.

High APY: PennyWorks is able to offer higher interest rates when compared to traditional savings accounts because of the unique nature of its loans. Loans composed of digital assets are easier to use and access than cash loans, so borrowers are often willing to pay a premium, resulting in better interest rates for you and an easier borrowing process for the user.

Collateralized loans: The majority of cryptocurrencies are very volatile because they are not pegged to any underlying asset. This means the price of the token or coin is only worth what it’s currently trading for, and this number can change drastically from one day to the next. PennyWorks overcomes this problem by investing your money in stablecoins pegged to the USD. When engaging in investments powered by lending, it's important to understand what the collateral is and how it will be redeemed when recalling the loan. With collateralized lending, PennyWorks reduces the risk of principal loss since the collateral can be liquidated in real-time to satisfy the debt.

PennyWorks User Experience

One of the things that makes PennyWorks a strong platform is its straightforward language and simple signup process. You won’t need to research buzzwords or technical jargon when you sign up for an account, and funding requires only a bank transfer. Most PennyWorks users will be able to open an account in 5 minutes or less. However, keep in mind that PennyWorks is only currently available to accredited investors

PennyWorks vs. Competitors

CoinRabbit, Coinbase, Nebeus, Blockfi, Voyager are a few comparable platforms to PennyWorks.

  • securely through Penny Works's website
    securely through Penny Works's website
    Best For:
    Low Risk Investments
  • securely through BlockFi's website
    securely through BlockFi's website
    Best For:
    No or Low Fees
    Read Review
  • securely through Voyager's website
    securely through Voyager's website
    Best For:
    Mobile Traders
    Read Review

    *Other fees may apply.

PennyWorks Overall

Requiring none of the technical know-how often needed with traditional crypto exchanges, PennyWorks can be a strong option for investors who are new to the asset. PennyWorks investment in stablecoins means that volatility is far less likely to destroy your portfolio, while collateralized loans can give you an edge in terms of APY. Overall, investors who have no experience with crypto but who want to add stablecoins to their overall portfolio to diversify into digital assets will likely enjoy PennyWorks’ no-nonsense approach to crypto investments and interest. 

Despite the volatility in the crypto markets in the last few months, PennyWorks has continued to deliver for its investors. 

Frequently Asked Questions


How is PennyWorks APY calculated?


PennyWorks quotes APYs instead of rates because APYs take into account the effects of compounding. Your invested funds compound daily. For example, $100 invested for 1 year at an APY of 5% earns $5 of interest. Its APY rates are variable based on how much notes have been purchased and how long between redemptions. These rates may change from time to time, but you are free to redeem your funds at any time if you find better opportunities elsewhere.


Why are the yields so high?


PennyWorks converts your U.S. dollars to stablecoins. Many decentralized applications can only make use of stablecoins since they cannot interact with traditional financial services. This captive pool of investors use stablecoins to reduce risk in times of volatility, or borrow stablecoins to fund other expenditures. There are also certain tax benefits from borrowing stablecoins instead of selling crypto assets and realizing taxable gains. Lastly, borrowing stablecoins on decentralized platforms is very convenient, you can secure a loan in a few clicks as long as you have enough collateral, which makes it much easier to deal with than traditional financial institutions. Because of these advantages, crypto borrowers pay up in terms of interest rates to your benefit.

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About Sarah Horvath

Sarah is an expert in the insurance, investing for retirement and cryptocurrency space.