6 Best Crypto Savings Accounts of 2022
The rapid development of the cryptocurrency market has contributed to the creation of several products and services comparable to those found in conventional financial markets. An important example of such innovative products is a crypto savings account.
In this article, we will share a lot of helpful information about opening and using a crypto savings account. We define what a crypto savings account means, highlight the best providers of such a service, and present the factors to consider before you open this kind of account.
Best Crypto Savings Accounts
Below is our list of the best crypto savings account providers for investors today. They offer secure and user-friendly platforms that reward their customers with attractive interest rates on their crypto savings accounts.
Binance is a leading crypto exchange where you can buy, trade, and hold over 350 different cryptocurrencies, as well as participate in the NFT world. It offers a simple way to deposit and earn up to a 50% annual percentage yield (APY) on its Savings Account offerings. You can choose between a Flexible Savings Account (which lets you redeem your funds at any time) and a Locked Savings Account (which gives higher interest earnings but a fixed time for redeeming your funds).
If you want to trade between precious metals, equities, 37 fiat currencies, and over 200 cryptocurrencies and stablecoins all on one platform, choose Uphold. It is a multi-asset digital platform that provides financial services to a large international market, offering you a platform to earn up to 19.5% APY on your crypto.
Crypto.com is the best digital platform where traders and investors can buy and sell more than 250 cryptocurrencies using over 20 fiat currencies. It can reward you with up to 14.5% per annum (p.a.) on your coins through its Crypto Earn offering, which is comparable to a savings account. You can get up to 5% p.a. on Bitcoin, 6% p.a. on Ether, and 8.5% p.a. on USD Coin.
Coinbase is one of the most secure online platforms for crypto investors and traders to buy, sell, transfer, and store cryptocurrency. It lets users put their digital coins to work and earn rewards. You can deposit your cryptocurrency on this exchange and aim to get up to 5.75% APY in return.
Nexo claims to be the most technologically advanced and regulated financial platform for digital assets in the world. It provides more than 40 different cryptocurrencies, an easy-to-use exchange and crypto lending platform, as well as industry-leading earning rates on digital assets. You can deposit crypto on Nexo and earn up to 16% APR, which is paid out daily.
Gemini is a regulated digital platform where people can buy, sell, spend, and store more than 100 cryptocurrencies. You can use its Gemini Earn offering to get up to 8.05% APY on your cryptocurrency deposit. It offers an opportunity to beat inflation by earning stablecoins.
What is a Crypto Savings Account?
A crypto savings account is an online account into which a crypto enthusiast or experienced investor can deposit cryptocurrency and generate interest over time (as the asset is being loaned to other parties that need it). It is a service often provided by crypto exchanges, staking companies, and lending protocols.
A crypto savings account is an attractive option for investors with substantial crypto holdings. Why? It is usually a high-yield investment that offers substantially greater returns than the traditional savings alternatives. However, the crypto account provider you choose is a strong determinant of the outcome of your crypto savings.
As the market for cryptocurrencies grows quickly, more and more platforms are beginning to provide crypto savings accounts to their users. This competition enables investors to enjoy favourable interest rates on their deposits.
How to Compare Crypto Savings Accounts
When trying to select the most suitable crypto savings account for your investment needs, it is most important to know which coins are supported and the rewards provided on them. You can check their websites and add other factors for comparison as you please, such as the minimum fiat money deposit you have to make, the kind of customer support available, and so on.
We prepared the table below to give you a basic illustration of how to compare your crypto savings account options.
How to Choose a Crypto Savings Account
Having shown you the best crypto savings accounts and how to compare them to ensure that you are able to make the right choice for your investment needs, below is a list of the factors you should consider when choosing a crypto savings account:
- Cryptocurrencies supported:
It is better to choose a crypto savings account that supports more digital assets than to go for one with limited support for a few. However, it is up to you to decide the amount of crypto support that is enough for you.
- APY rates:
Look for the crypto savings account that offers the highest APY for your crypto deposit. Your objective should be to maximise the returns on your savings. Nonetheless, pay attention to the fees to be sure that you can afford them.
- Fees (including hidden fees):
Do a review of the breakdown of the fees for your crypto savings account. Also, try to find out whether there are any hidden fees and include them in your consideration. Almost all crypto savings account providers will allow you to make deposits without paying any fees. However, note that some do charge a fee for withdrawals.
- Crypto bonuses:
These days, there are several exchanges and digital platforms that provide crypto sign-up bonuses. Your overall earnings may significantly increase if you can get some free Bitcoin or other cryptocurrencies. Besides, you may want to take advantage of the best sign-up bonuses available by switching between crypto savings accounts occasionally.
- Insurance and security:
Before you choose a crypto savings account, try to find out whether it provides insurance for users’ digital assets, security features like two-factor authentication, and a platform without a history of hacks and data breaches. You can find these pieces of information on its website, our detailed and reliable overviews, as well as other online user reviews. Exchanges like Coinbase and Gemini have a variety of security measures in place, as well as insurance for digital assets.
- Payout schedule & flexibility:
Companies like Nexo and Gemini provide daily interest payments, which are uncommon in most savings accounts. Besides, many crypto platforms follow a schedule for payout; many others do it monthly. So, it is wiser to look out for flexible lock-in periods and quick payments.
- Market risks: Being paid high-interest rates for cryptocurrency is fantastic. However, your profits will decrease if the broader cryptocurrency market or the value of the assets on which you make money falls. As a result, before adding cryptocurrency to your portfolio, think about market volatility as a risk factor.
Additionally, avoid depositing cryptocurrency that you cannot afford to lose in a closed savings account and stop taking the ability to withdraw your cryptocurrency for granted. The crypto loan industry has lost a number of major service providers in 2022, including Voyager and Celsius.
How Much Can a Crypto Savings Account Generate
Typically, the interest rate on a crypto savings account is higher than that of a regular savings account. As a result, if you are currently a cryptocurrency holder, opening a high-interest savings account could be a better option than keeping your money idle on an exchange or wallet. However, remember that this is a highly risky investment as the market is volatile. As the potential profit increases with a higher risk, so makes the loss.
Nevertheless, when it comes to how much you may be able to earn from a crypto savings account, know that the exchange, the cryptocurrency you choose, and the size of your deposit all contribute to your interest.
Basic Steps to Setting Up a Crypto Savings Account
The steps for setting up a crypto savings account can vary from one exchange to another. However, you should be ready to take the following four basic steps:
- Choose any of the best crypto savings account providers we have listed above.
- Create an account with it by using the “Register,” “Get started,” “Create an account,” or “Sign up” button on the website. Fill out the form and submit it so your application can be processed.
- When your account has been created, deposit funds into it. Depending on the payment methods offered by the account provider, to make your first deposit, you may use a local bank transfer, wire transfer, SEPA transfer, card deposit, wallet-to-wallet transfer (PayPal), or crypto transfer from another platform.
- Start saving and earning interest on your new crypto account!
Are Crypto Savings Accounts Safe?
Insurance and cyber security are top concerns about crypto savings accounts. Since most banks are covered by national or federal deposit insurance companies, such as the Federal Deposit Insurance Corporation (FDIC) in the United States, the idea of saving money in bank accounts is widespread. But concerning crypto savings accounts, the security of your digital assets is rarely guaranteed through any insurance because exchanges are mostly uninsured in the United States and many other countries.
Nevertheless, currently, there are a few digital platforms with insurance for crypto savings accounts. One of them is Nexo, which provides $775 million in insurance on custodial assets via partnerships with other custodians insured with Marsh, Arch, and Lloyd’s of London.
In terms of protection against cyber-attacks, ensure to save only the amount of cryptocurrency you can afford to lose to a wallet hack. We are not implying that crypto wallets or crypto savings accounts are entirely unsafe; there are several exchanges like the ones listed above that have reliable security measures which we have already highlighted.
Most banks currently do not accept cryptocurrencies, nor do they offer crypto services like crypto bank accounts. Nonetheless, there are a few crypto-friendly banks you may want to try out.
Yes, you can! Coinbase lets its users put their digital coins to work and earn rewards. You can deposit your cryptocurrency on this exchange and aim to get up to 5.75% APY in return.
Yes, it is possible! You can lose money deposited in a crypto savings account because of the fact that the cryptocurrency market is highly volatile and there is currently a scarcity of deposit insurance to protect customers’ digital assets. Nonetheless, the best crypto savings account providers have advanced security measures to safeguard your funds.
The risks of a crypto savings account include a lack of deposit insurance and the possibility of the value of your deposit decreasing at any time following fluctuations in the crypto market.
Crypto savings accounts allow investors to deposit their crypto holdings, which are subsequently lent to other parties that need crypto. Because crypto is more difficult to get compared to cash (fiat money), lending it can create significant returns.
Investing in cryptocurrencies has become one of the trendiest topics in recent years. And what intrigues many owners is the potential to establish a new source of income through crypto savings accounts.
Interest rates are likely to vary with time. However, always remember that many crypto savings accounts currently provide much higher returns than any high-yield savings account with a bank. Therefore, check out the digital platforms we have highlighted above if you are searching for the most dependable and profitable crypto savings account providers today.