Why bother putting money in a traditional savings account? At a 2.00% interest rate, you might as well hide it under the mattress even with recent interest rate hikes. But a crypto savings account? You could earn a nice chunk of change fairly quickly.
Of course, rates will vary, but it’s not unusual for crypto interest accounts to generate high yields between 1% to 4%. And they can go much higher. It’s your best chance to increase the overall return on your investment portfolio.
But, before you go all-in with your BTC and ETH, you’ll want to have the information you need to make a good decision. It’s your hard-earned cash, after all. No one knows for sure what the demand will be next month, or tomorrow for that matter. And there are some inherent risks.
Not just any old cryptocurrency account will do. We know you’ll want to be selective and choose the savings account with the best crypto sign up bonus. That’s why we’ve rounded up the best of the best crypto exchanges. Here are our top recommendations.
4 Cryptocurrency Savings Accounts to Compare
1. Coinbase – Best for Crypto Beginners
Coinbase has one of the world’s largest cryptocurrency exchanges and one of the best places to buy Bitcoin and cryptocurrency. Its savings account is the new kid on the block. The interest account offers a good selection of currencies with low minimum balances required.
They have an intuitive, top-rated mobile app with advanced functionality. The app features a large selection of beginner guides, crypto tips, and tutorials. You can also earn free crypto by taking certain courses.
The current APY is up to 1.50% compounded monthly on USD coin. All you have to do is hold certain assets, like DAI and USDC, in your Coinbase account and you’ll start earning right away.
A large number of beginner guides and intuitive navigation make Coinbase good for novice investors. The robust trading platform is great for advanced traders who want to earn a small amount of interest while waiting to make cryptocurrency trades.
What you should know:
Coinbase’s fee structure is difficult to understand and too expensive for small purchases. Interest is low on most currencies. More experienced traders may want more advanced trading tools and low trade fees.
You'll get $10 in free Bitcoin when you buy or sell $100 or more in crypto.
Where to start:
Learn more and earn crypto for your Coinbase account.
2. Crypto.com (CRO) – Best for Long-Term Holding
Available in most U.S. states, Crypto.com offers affordability with a large selection of over 60 cryptocurrencies, including its own CRO. Account minimums vary based on the type of currencies and how long you hold them. It’s currently earning up to 3.00% APY on Bitcoin and a high rate on stablecoins of up to 6.50%.
Crypto.com pays interest on 15 traditional cryptocurrencies and 8 stablecoins.
Because of the way its incentives work, Crypto.com is well-suited if you plan to hold investments longer than three months or can stake $50,000 in CRO.
What you should know:
The website is hard to navigate and the trading fee structure for Crypto.com is a little complicated. Also, although there are over 100 coins, 40 of them aren’t available in the U.S. and another 35 are not available in all states.
Some users say that customer service isn’t as responsive as they would like.
Where to start:
Calculate your reward potential on Crypto.com.
3. Nexo (NEXO) – Best for Daily Interest Checked Card
Nexo, with no account minimums, has no deposit fees and a tiered withdrawal system. You get one to five free withdrawals, based on the percentage of NEXO tokens you have. There is also a Mastercard debit card.
You can deposit 24 cryptocurrencies, stablecoins, and other digital assets in your account. You’ll earn an APY of up to 10% deposited daily on stablecoins and 5.00% on Bitcoin.
NEXO token holders get higher yields on savings. Interest is compounded and deposited daily to your account, so there’s no need to wait a whole month to start earning passive income.
Even though the platform offers plenty of functionality, it’s oriented toward beginners. It’s easy to learn and even easier to get started.
Beginning crypto investors will enjoy the clean layout and shallow learning curve. Long-term cryptocurrency investors will appreciate the free withdrawals.
What you should know:
If you’re looking to learn more about trading, there are fewer educational resources than some of the competitors.
Where to start:
Make your idle cryptocurrencies work for you with Nexo.
4. YouHodler – Best for Active Earning + Trading
An EU and Swiss-based company, YouHodler offers nearly two dozen coins. There is a minimum $100 USD investment to earn interest. Earn up to 8.32% on stablecoins compounded weekly with no fees on withdrawals.
The platform is simple to use and you can buy crypto with fiat currencies so start-up is easy. There is both email and live chat customer support.
The self-proclaimed crypto-fiat financial service is packed with features. It even has a feature that resembles margin trading tools so you can leverage your assets if you want.
YouHodler is great for more sophisticated investors who want to make the most of price fluctuations and HODL (buy and hold) at the same time.
What you should know:
YouHodler is not available in the U.S.
Deposit fees, up to 4%, are high. There are also withdrawal limits.
Where to start:
Boost your crypto earnings each week with YouHodler.
Key Things to Remember about Crypto Savings Accounts
Cryptocurrency savings accounts differ from regular bank high yield savings accounts in many ways. It’s more than a currency and more than a digital asset. While few people understand the nitty-gritty details of blockchain and cryptography, the most important things to remember are pretty simple.
There is none. Although they’re called savings accounts, a crypto account is an investment. There is no guarantee that you’ll recoup your money if the provider goes under or for any other reason. That’s why it’s important to stick with well-established companies.
When you deposit into crypto savings, your currency is there for others to borrow for a period of time. You give up your private key to make it available to them. So, unlike a bank savings account, the money isn’t sitting there waiting for you. The borrower pays interest in return for the use of your cryptocurrency.
It is significantly more than you might earn on, say, a credit union savings account. This is simple economics. Regular banks make money by offering to loan the money they store. But, crypto banks don’t have money to lend. They must attract investors like you. In order to do that, they pay more.
Hedge Against Loss
The APY on crypto savings accounts offers an additional benefit: if your currency decreases in value, you’ll continue to earn interest.
Traditional banks let you withdraw money six times per month. Most crypto banks, however, have restrictions on the number of times you can withdraw. Some allow one free withdrawal, others charge a fee. Remember, crypto accounts are investments.
Compounding means that your interest earns interest. Certain crypto savings accounts don’t pay compound interest. All of the platforms listed here compound. Of course, consider the expected APY before you rule out non-compounding accounts.
Interest Earned in Crypto
The money that you deposit into a crypto savings account becomes cryptocurrency. Interest is earned in crypto, as well. If you are more interested in U.S. dollars, you might consider investing in the popular USDC or USDT. They are stablecoins that are pegged to the dollar. You can redeem a $1 USDT for one US dollar. Keep in mind, however, that if demand drops, the USDC will lose value.
The Cryptocurrency Basics
Cryptocurrency exists only in the digital realm. Unlike U.S. dollars, there is no central bank of crypto. Rather, there is a network of computer systems that use blockchain technology to make it nearly impossible to cheat.
Blockchain is a digital ledger of encrypted transactions distributed across many systems. Using blockchain technology, cryptocurrencies don’t need a big boss, i.e., a central authority. This means there is no single point of failure since every computer has all of the information.
These decentralized systems use cryptography, which is a communication technique based on complex mathematical equations. Since you can’t exactly tuck digital money in your pocket, cryptocurrency has a private key — a string of numbers and letters that provides access to the owner’s funds and protects them from theft or fraud.
Why Do Cryptocurrency Rates Fluctuate?
Central banks can manipulate funds’ availability and interest rates on the U.S. dollar. This will cause the dollar to go up and down within a relatively tight range. Fluctuations in cryptocurrency rates are driven by the straight-up economics of supply and demand.
That makes them a riskier investment. No one knows for sure how the crypto marketplace will change tomorrow. It’s also why there is a potential for higher returns. The price of the currency increases when demand is high, and it decreases when demand is low. It’s an efficient market.
Not everyone purchases crypto for the same reason. Some people use it to make payments without using an intermediary like a bank. Others hold it for its potential to increase in value. If you’re shopping for a cryptocurrency savings account, you may have a longer-term investment in mind.
How Cryptocurrency Savings Accounts Work
You don’t need to understand the nitty-gritty details of cryptocurrencies to use them. The most important thing to know is that cryptocurrency is an asset class like any other. Consider how crypto fits into your overall financial plan and whether you can take all of the heart-pounding excitement.
Plenty of investor hacks have made a ton of money by buying the right type of crypto at the right time. But no matter how you invest your money, you should aim for diversification and know what you’re getting.
Cryptocurrency savings accounts can be a nice part of your portfolio. Why savings accounts? With the exception of a nice return, they’re nothing like a 1980 passbook account. When you deposit into a savings account, the cryptocurrency is available for loans to institutions, corporate borrowers and investors. Your deposit earns a rate of return. There are a few key points to keep in mind, however:
- If the value of the underlying crypto falls, it could wipe out some or all of your savings.
- Depending on the account rules, you may not be able to access your money quickly.
- You must give up access to your private keys to make your cryptocurrency available to lend to investors.
Crypto savings accounts are not FDIC-insured. There is no guarantee that you’ll recoup your assets if your provider goes under. So stick with well-established companies. Remember that the interest earned depends on the type of cryptocurrency you deposit.
Stablecoins, whose value is pegged to the U.S. dollar, e.g. Bitcoin, make it easier to account for the interest and reduce risk.
Keep in mind, too, that some cryptocurrency savings accounts pay simple interest and you will be unable to take advantage of compounding. Of course, when you consider the expected APY, you may decide it’s a term worth accepting.
Start Earning Passive Income with Cryptocurrency
A cryptocurrency savings account allows you to earn a higher interest rate than your typical bank. You could pocket a nice chunk of change pretty quickly. That’s the good news. But, there’s also a fair amount of confusion.
Even the oldsters like Bitcoin involve risk, so it may not be immediately apparent whether crypto is for you.
Before you go all-in on a cryptocurrency savings account, you’ll want to have the information you need to make the best possible decision.
Here are current rates:
|Company||Stable Coins (e.g. USDC)||Bitcoin|
|YouHodler||Up to 8.32%||3%|
|Nexo||Up to 10%||Up to 5%|
The most important takeaway is that cryptocurrencies like Bitcoin are an asset class like any other. It comes with a bit of risk. So you should consider how crypto fits into your overall financial plan and whether you can take all of the heart-pounding excitement.
Plenty of investor hacks have made a ton of money by buying the right type of crypto at the right time. But no matter how you invest your money, make sure you’re diversified and know what you’re getting into.
You can do better than wait for your cryptocurrency to go up in value. Deposit your currency in one of these high-yield savings accounts and start earning passive income today.