Cryptocurrencies have been in the news a lot this past year or two, and a lot of people are looking to dip their toes in the crypto world to see how much they can earn by investing in cryptocurrencies. For many there is the lure of quick, easy gains through the fast appreciation of obscure crypto tokens.
Others, however, have seen the potential to invest in cryptocurrency in a much safer way, by opening a crypto savings account where they can earn interest on their owned cryptocurrency balances.
These so-called crypto savings accounts allow you to earn good interest on crypto, often with higher rates than you can earn by putting your money in an old-fashioned savings account with a traditional bank.
While the returns are good, the downside is that you won’t enjoy the same level of safety offered by a bank or credit union. It is important that you not only understand how these accounts work but also that you choose a reputable company.
In this article, we’ll explore some of the top crypto savings accounts in a little more detail, so you can make an informed decision and decide if it’s for you.
The Differences Between Crypto And Regular Savings Accounts
While it is easy to assume that one savings account is much the same as the other, there are some crucial differences between crypto and regular savings accounts.
No FDIC Insurance
If you have your savings in a regular bank, your account will come with the reassurance of up to $250,000 of FDIC insurance, or NCUA insurance for credit unions. This is federal insurance coverage that will reimburse the account holder should the bank fail or cease trading.
However, your cryptocurrency interest earning account does not provide this insurance. This means that were something to happen to your funds, there would be no insurance to cover your losses. Your interest and principal could both be lost. While it isn’t likely to happen, it’s still something to consider.
The yield on a crypto interest account is typically 4% to 8% APY or even higher, which is significantly more than the typical traditional saving account yield.
Where do those yields come from?
Typically large institutions are a large driver of the crypto borrowing. They will borrow crypto for a short time in order to cover large buy orders of cryptocurrency when it’s unlikely they’ll have enough sell orders all at once to cover the order. They borrow the crypto to cover their buy order until sell orders from their clients come in and they can repay the loan.
Crypto is also borrowed by arbitrage traders who will take advantage of slightly different crypto pricing at different exchanges, and borrow the right crypto for a short-term loan to take advantage of the price differences. They are willing to pay the high rates because in the end they’re making more through their arbitrage.
Crypto Key Access
With a traditional savings account, the money on deposit is simply yours. However, with a crypto savings account, crypto keys are lent out to others who can use the crypto for a set period of time. In exchange for this, the borrower pays interest on the crypto lent to them.
This means that you may face restrictive limits on access to your funds. While savings accounts may allow a set number of withdrawals each month, you may not need to agree to certain amount or frequency limits on your account.
The Best Crypto Savings Accounts
So, now you’re aware of how a crypto savings account is a bit different from a regular savings account, and you know some of the potential risks and benefits, lets look at the top crypto savings accounts in the current market.
Celsius Network offers some great rates that easily beat out some of the best compound interest accounts offered by banks and credit unions. The rates vary from 0.50% to 17.78% across 42 different cryptocurrencies.
The highest rates on offer are for those holding Celsius Token or CEL, but even the Celsius base rates are higher than average. There are also additional bonuses if you take your interest payments in CEL. Unfortunately, CEL is only available to accredited investors and international customers.
It is important to note that if you purchase coins through Celsius, there are third-party fees, but you don’t incur withdrawal fees. Personally I like to buy GUSD stablecoin on Gemini (see below) with no fees and transfer them over to Celsius to earn 8.8%.
Celsius has a secure app, and a number of security features to keep your crypto safe. You can also apply for crypto-based loans if you choose.
- Use referral code 136907dfb4 when signing up and earn $40 in BTC
- Earn up to 17.78% APY on select cryptocurrency.
- Crypto backed loans
BlockFi offers some of the best ways to earn cryptocurrency with 13 currencies and stablecoins, including Ethereum and Bitcoin. You can expect to earn 0.1% to 8.25% with interest paid each month and no minimum deposits. Certain cryptocurrencies such as Bitcoin have decreasing rates, so the more you deposit, the lower the rate you’ll earn. The best rates are tied to stablecoins like GUSD or USDC.
BlockFi also employs some great security measures including two-factor authentication and there is also insurance against digital asset theft. Additionally, the only fees you’ll incur are for withdrawals.
Get up to $250 in crypto bonus with a deposit of $100 or more in crypto. Click through our link below for details.
- Get up to $250 crypto bonus with a deposit of $100 or more in crypto.
- Earn up to 8.25% APY on select cryptocurrency.
- Crypto backed loans.
Nexo has high-yield accounts offering up to 12% across 20 cryptocurrencies, which is paid daily. The highest rates are available to members in the Nexo loyalty program holding the native Nexo coin.
The rates for popular coins are typically 4% to 8%, but some stablecoins and cash deposits allow you to earn 10% to 12%. There are also bonuses that are based on factors such as whether it is a fixed-term deposit and if you take payouts in Nexo tokens rather than the currency you originally invested.
The loyalty tier also determines how many free withdrawals you can make each month. Credit line withdrawals are free, as are deposits.
In addition to measures such as login alerts and withdrawal confirmations, Nexo also carries $375 million in insurance for digital assets.
- Earn up to 12% APY, paid daily.
- Crypto backed loans (so you don’t have to sell).
- $375 million in insurance on custodial assets.
Coinbase is one of the top crypto savings accounts for crypto newbies. Coinbase is primarily known for its exchange, but it is still worth looking at its interest accounts. There are more than 50 cryptocurrencies and a very user-friendly interface and a few interest-earning options.
The rates are not as attractive as some of the other platforms, but it can be a good way to build your crypto confidence. You can expect to earn 1.25% on USDC Coin deposits. Select users can also access Ethereum with returns up to 6%.
The platform fees vary according to the transaction, and there are withdrawal fees. However, Coinbase does have a variety of security measures including up to $250,000 digital asset insurance.
Coinbase also offers an invite-only crypto-backed loan, but this is a limited feature that is not open to all users.
- $5 new account bonus.
- Great for beginners.
- Strong security, reasonable fees.
- Decent APY via a solid platform.
Disclaimer: Personalized $5 reward offer is displayed after account creation. Limited time offer and while supplies last. Offer available to new users who have not previously verified their identification. Offer not available to new users who were referred to Coinbase through the Referral Program or who have previously opened an account using different contact information. Coinbase may update the conditions for eligibility at any time, in its sole discretion. See Terms and Conditions.
If you’re considering long-term holdings, Crypto.com is a good option, as there are several ways you can earn interest with a choice of over 35 currencies. The interests vary from 0.5% to 8.5% if you opt for cryptocurrencies such as Bitcoin, but stablecoins such as USDC attract up to 14%. The rewards are paid to users weekly in USDC.
Unfortunately, the highest rates are not the easiest to access. They are based on a number of factors including whether you opt for a flexible, one month or three-month term, and your stake. Without staking, on a three-month term, your rate may be capped at 4.5% and 10% for Bitcoin, and stablecoins respectively. The greatest rate on a flexible term with no stake is 6% on stablecoins. While this is a little confusing, the platform does have an interactive calculator you can use to generate estimates.
Due to the money investment and time requirements, this platform is best if you’re intending on holding your assets for at least one year. Crypto.com also has withdrawal fees according to the currency.
Crypto.com has established security protocols that are similar to the other sites we’ve listed, but it stands apart as an all-in-one service platform. You can not only access interest accounts, but there are crypto-based exchange loans, mobile pay services, Visa Rewards cards options and wallets, both custodial and non-custodial.
- $25 bonus in CRO for new app users.
- Up to 14% APY returns.
- Flexible terms, variable returns.
If you have security concerns, you may find Gemini your pick as the top crypto savings account. This platform is a well-established cryptocurrency exchange, but it has expanded and now offers interest accounts. You can access a wide variety of currencies with over 28 different rates that vary from 1.26% to 7.40% compounded each day. You can explore the full platform rates and an interest calculator on the Gemini site.
Gemini offers free crypto deposits and withdrawals for up to 10 coins each month. However, after this limit, the withdrawal fees vary by currency and you can incur agent fees.
Although the investments on this platform are not insured, Gemini does vet borrowers for risk management and ensure they do through an accredited third-party borrower. The platform prioritizes security with geographically distributed facilities where crypto is stored offline, cyber security and bug bounties. Gemini has also secured $200 million in insurance.
I like to buy GUSD stablecoins with Gemini and then transfer them fee-free to Celsius for their higher GUSD rates, but Gemini’s rates aren’t bad either.
- Up to 7.40% interest compounded daily.
- $10 BTC bonus when you trade $100.
- Great security.
If you’re outside the U.S.A. and want to both earn interest and enjoy active trading, you might want to consider YouHodler. This platform offers crypto banking services and allows you to continue trading with the currencies earning interest in your accounts.
It is possible to earn interest on 25 currencies with rates up to 8% on Crypto and 12.3% for stablecoins. The interest is compounded each day and paid weekly. Additionally, there are flat rates, so you don’t need to mess around trying to calculate complicated tiered requirements to maximize your earnings.
The deposits are free with this platform, but there are withdrawal fees that vary according to the currency. The major coins are free to withdraw less a blockchain fee.
YouHodler has secured its assets with $150 million in insurance, but it also has additional security measures such as the ability to stop withdrawals and a mixture of cold and hot storage. The great thing about the platform is that YouHodler also supports crypto-backed loans, margin trading option exchange, and NFTs. Not available for users in the U.S., China, Germany and several other countries.
- Up to 12.30% interest.
- Crypto loans.
- $150 million in pooled crime insurance.
- Not available to U.S. users.
Finally, if you are after simplicity, consider Voyager. This is quite a similar platform offering crypto interest accounts with rates up to 12% across 30 currencies and stablecoins. However, there are minimum monthly balances depending on the currency.
The interest is paid each month on the fifth, but some assets may have a seven-day delay before you can make a withdrawal.
The fee structure for withdrawals depends on the currency. There is a full list on the website, which you should check to calculate whether it is feasible for you and your preferred currency options.
- Up to 12% interest, paid monthly.
- 60+ digital assets to buy commission-free.
- Cash held with Voyager is FDIC insured.
Hodlnaut is another crypto-based savings account that is paying good returns, up to 12.73%, depending on what type of crypto you’re holding with them.
You can earn on anything from BTC to ETH, USDC, USDT, WBTC and DAI.
The service allows you to withdraw weekly, and there are no minimum deposits.
If you sign up for an account through our link and deposit at least $1,000, you’ll earn a $20 bonus!
- Up to 12.73% interest, paid monthly.
- Get $20 free when you deposit $1,000.
- No minimum deposit.
Linus is a crypto based interest account that feels a whole lot like a regular savings account in that you deposit your U.S. dollars, and you earn interest on those dollars which are deposited into your account (Currently up to 4.5% APY).
It’s different from a regular savings account in that what is happening to your money is that Linus is converting your dollars to USDC stablecoin, and then lending your money out to decentralized asset credit markets, where they can get a better return for your money than at a traditional bank.
While your return will be higher than a traditional bank, it does carry more risk as well since it is not FDIC insured.
Linus was in a public beta, which is now closed. Expect the service to be open for all users at the end of 2021.
- Deposit money in USD, withdraw in USD.
- Up to 4.5% interest.
- Works like a traditional savings account.
What’s The Difference Between Crypto Savings and Crypto Wallets?
So are crypto savings accounts the same as crypto wallets? There are several things that are set them apart that make them quite different.
With a crypto wallet, whatever form of cryptocurrency you have in your wallet will not earn interest. The number of coins that you own will not change over time. However, in a crypto savings account the number of coins will increase over time as you earn interest.
As we touched on above, with a crypto savings account, you essentially hand over key ownership to a borrower for a set amount of time in return for interest. However, with a crypto wallet, you are the only one who has access to the key.
One of the potential downsides of crypto is that if you lose your phone, you could lose access to your crypto wallet. There have been a number of stories when crypto was first mined, where initial owners lost pen drives containing their crypto details. Essentially, this money was lost. However, crypto banks not only allow you to earn crypto, but they offer increased security. There are redundancies in place to secure your crypto keys.
The Risks Of Crypto Savings Accounts
We’ve touched on some of these points above, but it is important that you are fully aware of all the risks of crypto savings accounts before you make a final decision about whether they are a good choice for your investment portfolio.
Lack Of Insurance Coverage
This point is well worth discussing again, but should a crypto bank fail, you will have no FDIC insurance to cover the funds in your account. This highlights the importance of choosing a reputable, solid crypto bank, but it may also be too big a risk for some potential investors.
Lack Of Control
Another significant risk with crypto savings accounts is that there is a lack of control for the account holder. Essentially, you will be giving up complete control of your crypto assets. As you surrender your keys to the bank, there is a risk that goes along with that. When the administrator of the account lends the funds to a third party, if they fail to pay it back, you could lose all or part of your coins with no legal recourse.
With a traditional savings account, if you have a financial emergency, you can access your funds with no problem. With a crypto savings account, however, there is less liquidity. Your funds are tied into the bank’s lending pattern, so you will need to wait until the coins are paid back.
In fact, most crypto banks impose withdrawal limits or caps on what you can take from your account over a set time period. So, it is unlikely that you will have access to your money if you need it during a financial emergency.
Another potential risk is price volatility. If the account is paid with a dollar-backed stablecoin, the interest paid is easy to account for. However, when the interest and balance are paid in crypto coins like Bitcoin or Ethereum, the amounts can fluctuate depending on the market conditions. This means that the amount of interest you earn may be more or less on any particular day.
Finally, you need to consider the third-party risk in your transaction. While the rates may be attractive, there is no recourse should the borrower default on the loan from your crypto account.
How To Choose The Best Crypto Savings Account
With so many options even among the top crypto savings accounts, it can be a little tricky to find the right option for you. So, here we’ve compiled a few things to look out for to help you choose the best account for you.
Interest Rate Requirements
The interest rates on offer will typically depend on the type of cryptocurrency. Popular currencies often decrease with volume, so the more you invest, the lower the rate. However, you also need to consider whether there are any bonuses on offer. These can be a great way to access higher rates and maximize your returns.
Some platforms such as Nexo, Crypto.com and Celsius offer bonuses for holding their tokens. You can also usually access better rates if you opt for a longer, fixed-term deposit.
Not every platform offers the same coins and currencies for their interest accounts. Many of them don’t allow you to earn interest on every coin that they trade in. At the low end of the scale, Coinbase only offers a few, while Crypto.com has 35+.
So, if you want great versatility, you will need to consider a platform with a wide variety of coins. However, if you’re looking for a specific currency, be sure to do your research. For example, Doge is only available with Voyager.
The world of crypto has a reputation for security issues since the currencies are not recognized by many governments and hacking is always a concern. While it isn’t FDIC insured, some platforms have acquired independent insurance for their digital assets, which can provide reassurance for users.
Additionally, as with any finance platform, you need to ensure that your data, logins and transactions are secure. So, be sure to check the security measures on a platform before you sign up.
Another important consideration is the platform fee structure. Even if a platform is offering an excellent rate, if you incur a fee with every deposit and withdrawal, it will quickly be negated. Many platforms offer free deposits, but be sure to check the withdrawal fees. If you don’t intend on moving your coins around too much, look for a platform that has a number of free withdrawals, but if you plan on frequent transactions, you may be better off with a platform that has a low withdrawal fee.
You also need to check whether the platform can operate in your home state. The regulations can vary and there are platforms that cannot operate in all areas of the USA. In fact, some platforms are limited to international customers. Check whether you can access all features of the account platform in your area before you sign up.
Finally, you need to consider the user interface and how easy it is to manage your account. Crypto investing can be confusing, so if you’re a complete newbie, you may prefer a more straightforward platform, even if it doesn’t offer the best possible rates. Ideally, the platform should have an intuitive interface, with a display that is easy to understand at a glance. Also, some platforms are only available via an app.
A Cryptocurrency Savings Account Can Boost Your Earnings
Crypto is an interesting way to diversify your investment portfolio. If you want to invest some funds, a crypto savings account is a great place to start. Just be sure to check your account options and the platform to make sure they’re a reputable service before you hand over any coins.
More Places To Buy Cryptocurrency
If you’re looking for some of the best places to buy cryptocurrency, here’s a list of some of the best cryptocurrency exchanges.