Reserve yield
Tether receives value when USDT is issued and invests much of its reserve portfolio in short-duration instruments such as Treasury bills.
The interest earned on those reserves is the central driver of the business model because holders generally do not receive that yield.
Additional income
Tether can earn from issuance and redemption fees, secured lending and changes in the value of assets such as gold and Bitcoin.
These sources are smaller or more variable than reserve interest and may introduce additional market or credit exposure.
Tether versus a bank
Tether issues a token designed for redemption, while a traditional bank takes deposits, lends funds and operates within a deposit-insurance system.
USDT holders should not assume that holding the token provides the same protections as a bank deposit.
Risk and transparency
Profitability can strengthen an issuer's capital cushion, but it does not remove reserve, redemption, regulatory or operational risk.
Users should review attestations, reserve composition, redemption access and jurisdictional restrictions before treating a stablecoin as cash-equivalent.