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Do you recieve interest if sbd are held at bittrex? Why not. Seems like you should. Merchants would likely like to hold sbd somewhere they could easily cash out.

That's a question you need to ask bittrex. I personally never hold funds on an exchange for longer than absolutely necessary (except for a decentralized exchange, of course)

Thanks for the reply but bittrex was an example. Will I recieve interest at a non Steem walket? Seems like I should?

Technically, the blockchain cannot know the SBD belong to you, that's why you would need to find an agreement with bittrex .. or not leave your SBD there