Compare stablecoin yield platforms after tax.
After-tax balance
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Pre-tax interest
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Tax owed
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Your breakdown
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Why the advertised APY is not the yield you keep
Stablecoin platforms love to flash a fat APY number, and a 6.5% yield on a dollar-pegged token genuinely beats most bank savings accounts. But two things shrink that headline before it reaches your pocket. The first is tax. In the United States, stablecoin interest is ordinary income, taxed at your marginal rate the year you earn it, not the lower long-term capital gains rate. The second is risk, which the APY says nothing about. This calculator models the after-tax outcome and frames the risk tiers so you compare platforms on the number that actually matters: what you keep, adjusted for what could go wrong.
How the after-tax balance is built
The tool computes your ending balance by compounding an after-tax yield each year. It takes the APY, multiplies it by one minus your marginal tax rate to get a net yield, and grows your principal at that net rate for the number of years you choose. Separately, it shows the pre-tax interest your money would have earned and the tax owed on the full gross interest, so you can see both the gross and net pictures at once. A quick note on how these line up: the displayed tax figure is calculated on total gross interest, while the after-tax balance reflects compounding a net yield, so the two are computed on slightly different bases and will not subtract to the exact same number.
$50,000 at 6.5% APY in the 32% bracket over three years
Put $50,000 into a stablecoin position earning 6.5% APY, with a 32% marginal tax rate, held for three years. The net yield is 6.5% times 0.68, which is 4.42%. Compounding $50,000 at 4.42% for three years gives an after-tax balance of about $56,927. Left untaxed, the same money would have grown to $60,397, so the pre-tax interest is $10,397, and the tax owed on that gross interest is $3,327.
The chart shows how the gross and after-tax growth paths diverge over the three years as tax eats into the compounding.
The risks the yield number hides
None of this is FDIC-insured, and that is the headline caveat. Centralized platforms like Coinbase or Kraken carry custodian and counterparty risk; if the platform fails, your funds are not protected the way a bank deposit is. Decentralized protocols like Aave, Compound, or Morpho carry smart-contract risk, the chance that a bug or exploit drains the pool. And the stablecoin itself carries issuer risk, the possibility that a token like USDC or USDT loses its dollar peg, as has happened during past market stress. DeFi APYs run higher precisely because they shoulder more of this risk and carry no operational overhead. Treat a stablecoin yield as a risk asset wearing a savings-account costume, and size your position accordingly.
Questions investors ask
How is stablecoin yield reported on my tax return?
Interest or rewards from lending stablecoins are ordinary income, reported in the year received at their fair dollar value. Some centralized platforms issue a Form 1099 (often a 1099-MISC or 1099-INT), but many DeFi protocols send nothing, which does not relieve you of the duty to report. Keep your own records, because the IRS still expects the income on your Form 1040 either way.
Is a stablecoin yield better than a high-yield savings account or T-bills?
On the raw rate, sometimes. On a risk-adjusted basis, a Treasury bill or an FDIC-insured high-yield savings account is far safer for money you cannot afford to lose. The extra yield on a stablecoin is compensation for real risk, not a free lunch. Reserve it for capital you are willing to put at risk, and keep your emergency fund somewhere insured.
If you do decide a stablecoin position fits a slice of your portfolio, a few habits separate the careful from the burned. Diversify across both the platform and the underlying token, so a single de-peg or a single protocol exploit does not take down your whole position. Favor protocols with long track records, large total value locked, and multiple independent security audits over the newest project promising the highest number, because in this space an unusually high yield is almost always pricing in unusually high risk. Watch the after-tax figure rather than the headline, especially if you sit in a high marginal bracket, since a 32% or 37% rate can quietly cut a 6.5% yield down toward the 4% range, which is competitive with a fully insured savings account that carries none of the risk. This calculator is built for the investor who already understands that stablecoin yield is a risk asset and wants to model what they would actually keep after tax across a few years of compounding, so the comparison against safer alternatives is honest rather than based on a marketing rate.