Are you a cryptocurrency owner who wants to save your coins? Similarly to bank savings accounts in traditional finance, crypto enterprises across the ecosystem provide a savings plan for consumers who want to earn passive income on their crypto assets.
By simply staking your crypto assets with a service provider, you can earn interest rates of up to 20% APY on your crypto holdings. In this post, we will go over some of the advantages of having a crypto savings account, as well as the best crypto savings account and why crypto savings accounts may soon replace traditional savings bank accounts.
The Advantages of Saving in a Crypto Account
Before you decide to invest in any crypto savings account, you should be aware of the rewards and hazards. It is evident that crypto savings accounts do not work in the same manner that regular savings accounts at banks and credit unions do, which may provide consumers with both benefits and issues.
The following are some of the advantages that crypto savings accounts may provide users who invest in the platform.
Passive income: The goal of saving is to have a passive source of income while your assets are safe. Instead of keeping their funds in their wallets, crypto saving accounts allow users to earn passive income.
Crypto interest accounts: Unlike regular savings accounts, crypto savings accounts denominate and pay interest in either USD or crypto-based interest rates, such as Bitcoin Interest Accounts. This allows crypto enthusiasts to immediately accumulate their preferred crypto assets.
Higher returns: Because of the price volatility risk, crypto savings accounts offer a higher rate of return on deposits, averaging 5 percent to 12 percent APY, compared to standard bank savings, which offer only 0.5 percent APY. If you're willing to accept the risk, a crypto savings account could help you save more money.
Crypto asset security: Crypto savings accounts allow users (particularly newcomers to cryptocurrency) to securely keep their assets, lowering the likelihood of their losing access to their wallets. Some platforms, such as Crypto.com and AAX exchange, also provide insurance in the event of a hack.
Finally, some crypto savings accounts, such as Binance, provide users with benefits, tokens, and additional incentives, raising the overall rewards from savings.
Savings Accounts to Get You Started
Now that we've covered some of the advantages of saving in crypto accounts, we'll look at how newcomers and professionals can use savings accounts to create passive income.
All registered customers have access to BlockFi's Interest Account (BIA), which allows you to earn up to 7.5 percent APY on your staked crypto assets such as Bitcoin, Ethereum, USDC, and others. There is no minimum balance requirement for the crypto savings account, and there are no hidden fees. The interest rates (USDC interest account and BTC interest account) accrue daily and are paid directly to your wallet every month.
As one of the best crypto savings accounts, BlockFi ensures that users' assets are kept in cold storage and that they have FDIC insurance coverage for cash assets lost due to theft of up to $250,000.
BlockFi, in addition to its savings service, provides crypto loans to chosen consumers. The site solely charges withdrawal fees, which vary depending on the cryptocurrency asset.
Bybit just launched their crypto savings programme, which now supports 10+ coins on their earn platform. The cryptocurrency derivatives trading platform provides crypto savings accounts with APYs of up to 8% on chosen crypto assets.
The exchange has no minimum deposit requirement for the savings account and only the withdrawal cost is paid, which varies by asset.
Nexo is most known for its lending platform, but it has also created a reputation for itself in the cryptocurrency savings market. Nexo's high-yielding interest accounts offer up to 12% APY on a variety of crypto assets, with interest paid daily. It has easy interest payments and a short lockup period (less than 24 hours).
The highest yielding rates, on the other hand, are exclusively available to participants of the Nexo Loyalty programme, which is based on ownership of the native NEXO token. Nexo offers more than $100 million in insurance to cover its users' money.
If you are a first-time crypto user, the Coinbase exchange in the United States is the most straightforward way to begin your crypto savings journey. While the exchange has just recently entered the savings niche, its products have seen a surge, with account customers earning up to 1.25 percent APY on their USD coins in their wallets.
Coinbase allows customers to withdraw their money whenever they choose, making it a viable option for short-term investors by providing them more control over their assets. The exchange has yet to make its crypto assets savings available to the general public. They began allowing chosen customers to stake Ethereum in April 2021, providing profits of up to 6%. Although the service is not presently open to everyone, you can join their waitlist.
The exchange charges a multitude of fees, including withdrawal fees and 0.5 percent spreads. The FDIC insures users' USD deposits up to $250,000 in investment.
AAX Exchange, situated in Asia, is a privately held digital asset exchange that is driving crypto adoption in the Asia-Pacific area. It is the first crypto exchange powered by LSEG Technology's Millennium Exchange and has recently joined the London Stock Exchange Group's (LSEG) Partner Platform.
The exchange just launched its own crypto savings platform, which offers the best crypto savings rates yet, with users earning up to 20% APY on their assets. In its 7-day fixed savings product, AAX delivers the highest APY on centralised finance crypto savings on assets such as Bitcoin (BTC), Ethereum (ETH), Tether (USDT), and USDC.
Users may quickly transfer their USD, EUR, and GBP to the exchange and begin saving right away thanks to a variety of fiat onramp choices on the platform. There is no minimum account balance requirement, and the savings account only charges a withdrawal fee. Interest is calculated on a daily basis.
Over the last three years, the Gemini exchange, founded by Cameron and Tyler Winklevoss, has established itself as one of the safest and most regulatory-friendly cryptocurrency exchanges. After just establishing their cryptocurrency savings account, Gemini Earn, the platform is a viable choice for trading and investing cryptocurrencies.
The exchange provides 39 cryptocurrencies with savings alternatives, with interest rates of up to 7.04 percent APY on specific crypto assets. By staking their BTC on the Gemini Earn account, users can earn up to 1.65% APY. There are no deposit fees, but withdrawal costs differ according on the asset after withdrawing 10 coins per month. Gemini Earn charges Agent fees, which vary each coin and range from 0.04 percent to 4.3 percent.
The platform has launched a $200 million insurance fund in the event of a crypto asset loss.
Celcius Network provides one of the simplest methods for opening a crypto savings account and receiving weekly interest. Users merely need to deposit funds into their preferred account to begin earning passively. The network begins paying interest once a week, and you can withdraw at any time.
The platform, on the other hand, offers significantly higher rates but lacks complete clarity on how the interest rates are determined. On 14 different cryptocurrencies, interest rates are paid based on loyalty tiers ranging from 2.02 percent to 17.78 percent.
Crypto.com's services desk has evolved from a rigors on-ramp platform to one that provides trading services, savings accounts, and buyback options to its users. However, when it comes to saving, the platform prioritises individuals with large sums of money, thereby shutting out small-time crypto savers.
The saving accounts are divided into levels, each with its own set of activities that must be completed before you may begin saving on the site. Its Earn feature provides rates ranging from 0.5 percent to 8.5 percent for cryptocurrencies such as Bitcoin, and 14 percent for stablecoins such as USDC. Weekly awards in USDC are distributed by the platform.
To begin earning the greatest interest rates, Crypto.com customers must stake CRO (the native coin) for one month or three months.
4 Things to Consider Before Choosing a Crypto Savings Account
The interest yields previously mentioned appear to be attractive and may give investors a lot to think about when deciding on their chosen option. In this part, we go through some of the major characteristics you should look for before depositing money into a crypto-saving account.
#1. Tokens supported: Because no platform would enable savings for every crypto asset available, users must first determine which assets are available before they begin saving.
#2. Withdrawal restrictions: Before depositing funds to any platform, make sure you understand the withdrawal lockup periods, fees, and any other restrictions that may apply. Keep in mind that some services, such as Coinbase, only accept deposits from investors in specific countries.
#3. Asset security and insurance policy: Asset security is one of the most significant factors to consider when choosing a crypto savings account. To keep its clients' valuables safe, the platform requires a cold storage facility. While insurance is not prevalent in the crypto realm, it may play a role in your decisions because certain savings accounts protect their clients against theft and losses caused by hacks.
#4. Simple or compound interest: Some exchanges, such as NEXO, offer a simple interest rate that is paid out daily to your account. However, if you need the interest to earn interest, you should use platforms such as AAX Exchange, which offers daily compound interest.
