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Crypto Savings Accounts: What You Need to Know

Last Updated March 4, 2024 2:51 PM
Andrew Kamsky
Last Updated March 4, 2024 2:51 PM

Key Takeaways

  • Crypto savings accounts allow individuals to deposit cryptocurrencies to earn interest, bridging traditional banking with the digital currency industry.
  • Crypto savings accounts function like standard savings accounts. Where deposits are used by exchanges to grant loans, with interest typically paid in cryptocurrency.
  • Crypto savings accounts can offer higher returns than traditional ones, but they also come with significant risks.
  • Investors should perform thorough due diligence, understanding the complexities and uncertainties of the crypto financial landscape before dealing with a crypto savings account.

What Are Crypto Savings Accounts?

A crypto savings account offers a platform for individuals to store digital currency holdings. Typically, a crypto savings account will receive interest on said holdings deposited into the crypto account daily but subject to terms and conditions laid out by the exchange offering the financial product. 

The fusion of longstanding banking practices with the developing crypto industry represents a unique synergy between traditional financial systems and the crypto ecosystem.

How Do Crypto Savings Accounts Work?

A crypto savings account operates in a manner similar to the standard savings account. Typically, individuals transition assets from their crypto wallets into these savings accounts. The primary difference lies with the cryptocurrency exchange utilizing the deposits to grant loans to other platform participants. 

This means that instead of crypto exchanges loaning out fiat currencies the exchange would use cryptocurrencies like Bitcoin and Ethereum instead.

Interest is rewarded for these deposits in the form of cryptocurrency, often at a fluctuating rate. This rate is influenced by a combination of the specific cryptocurrency’s market dynamics and factors such as fund accessibility and the chosen crypto exchange. 

Some accounts provide straightforward interest, while others offer the option to reinvest earnings, leading to the potential for compound interest.

Prerequisites To Choosing A Reliable Cryptocurrency Savings Account 

Prior to starting a crypto savings account it is worth carrying out necessary due diligence by following the below steps:

Research And Shortlist

Various crypto savings account options are available. An individual should spend some time researching possible options and making a shortlist of said options.

Security Checks

Assess each option by carrying out security checks. This can be done by reviewing other customer experiences and researching the exchange thoroughly.

Compare Interest Rates

Compare the interest rates and supported digital currencies that are on offer for each option on the shortlist.

Read The Fine Print 

Before choosing which crypto savings account to use read the terms and conditions to keep an eye for any minimum initial deposits and fees incurred.

Confirm Fees

Investigate any fees related to fund transfers or withdrawals concerned with crypto savings accounts.

Will A Crypto Saving Account Ensure Profitability?

Depositing funds into a crypto savings account typically means earning interest in the chosen cryptocurrency, not necessarily in US dollars. While some leading crypto exchanges offer impressive yields, unforeseen demand shifts can jeopardize both the investor’s principal and its returns. 

Ultimately, while cryptocurrencies offer potentially high returns, they come with risks not found in government-backed fiat currencies. 

Top 7 Crypto Savings Account For 2023

Here’s a list of crypto savings accounts to earn interest on hodled coins:

  1. Binance: The world’s largest crypto exchange with hundreds of assets offer various financial products such as the “Fixed Savings”  which offers rates of up to 7% for a 90-day term.
  2. Coinbase: Offers a special USDC savings account whereby Coinbase customers looking for a low-risk investment can start earning 4.00% APY  via USDC. 
  3. Crypto.com: Crypto.com offers clients the opportunity to deposit customer funds and earn an APY  of up to 1.5% on BTC, 2% on ETH, and 5.25% on USDC.
  4. Kucoin: Crypto exchange with a wide list of available assets to earn yield. Bitcoin APY  up to 0.19% to 3% and USDT APY starting at 3%.
  5. YouHodler: Savings account with no minimum lockup periods and multiple protections for investors. Bitcoin APY  up to 7%, USDC APY up to 12%.
  6. Nexo: Offers short lock-up times for crypto assets with yields  of up to 8% on stablecoins and 3% on BTC.
  7. Kraken: Earn staking rewards on your cash and crypto twice a week with 0.15% APR on BTC  and 3.75% on USDT

Understanding The Difference Between Crypto Savings Accounts Vs. Regular Savings Accounts

The differences and similarities between Crypto Savings Accounts and Regular Savings Accounts can be seen below:


  • Crypto savings account: An option used for investors to deposit and earn interest on cryptocurrency assets as opposed to storing the cryptocurrency in a crypto wallet.
  • Regular savings account: Deposit and earn interest on fiat currency by storing the fiat currency in a bank account with a savings rate.

Interest Rates

  • Crypto savings account: Crypto interest rates tend to be higher than traditional savings accounts, with some crypto assets yielding up to 10% APY.
  • Regular savings account: To date, the yields offered are deemed to be much lower rates.


  • Crypto savings account: Due to the nature of cryptocurrency and its volatility investors might benefit or suffer from quick and unpredictable value changes both to the upside and downside.
  • Regular savings account: Fiat currencies have more stability but are deceptively losing value through inflation over decades.

Deposit Insurance

  • Crypto savings account: No deposit insurance is  offered by the government in the event of a loss or run on the crypto exchange.
  • Regular savings account: Often insured up to a certain limit in many countries, this ensures that a run on the bank means A bank savings account comes with $250,000 of FDIC insurance 

Key/Access Control

  • Crypto savings account: Control of crypto funds shifts during the lending period. Once the individual deposits the crypto funds to the exchange the keys to those funds essentially lie with the exchange. If the exchange goes bankrupt the funds are likely to be lost.
  • Regular savings account: The original depositor retains full access to their funds up to the deposited amount (and any associated interest).

Crypto Savings Accounts Vs. Crypto Wallets: Differences Explained

Taking a closer look at the distinctions and commonalities between crypto savings accounts and crypto wallets we find the following differences:


  • Crypto savings accounts: Designed to earn interest on the cryptocurrency deposited. These accounts typically generate revenue by lending out the deposited crypto to institutional traders and individual borrowers, and in return, they pay interest to the account holders.
  • Crypto wallets: Serve as a secure digital storage solution for cryptocurrencies. They do not generate interest but are primarily used to store, send, and receive cryptocurrencies safely and securely.

Earnings Potential

  • Crypto savings accounts: Offer the potential to earn interest on deposits, with rates varying between platforms.
  • Crypto wallets: Do not offer interest earnings and offer a primary function to ensure safe storage for the user.

Risk Profile

  • Crypto savings accounts: There’s a risk associated with lending activities. If the platform faces issues or the borrowers default, it might affect the return of assets or interest payments.
  • Crypto wallets: Risks are primarily related to security breaches or losing access keys, not from lending activities.

Control Over Assets

  • Crypto savings accounts: Typically, the platform has custody of the deposited assets, which they lend out to generate interest.
  • Crypto wallets: Users usually have full control and ownership of their assets, especially in non-custodial wallets.

What Are The Benefits Behind Crypto Savings Accounts?

Crypto savings accounts offer several advantages including:

Higher Interest Rates 

Crypto savings accounts typically provide much higher interest rates than traditional savings accounts. For instance, some accounts may offer up to 10% APY on specific cryptocurrencies, whereas a regular savings account might offer only 0.08% APY.

Platform-Specific Benefits

Some platforms offer even more favorable rates if you lock up your crypto assets for a specified duration or hold a platform-specific token.

Ease Of Onboarding 

Crypto savings accounts often present a more user-friendly experience compared to some complex blockchain protocols. They offer a streamlined way to enter the crypto ecosystem and earn interest via centralized platforms, unlike some DeFi protocols or native staking strategies that might have more complicated onboarding processes.

Earning Opportunities

Most blockchain networks allow staking returns. With a crypto savings account, users can earn interest similarly to how staking works, but with potentially less complication.

What Are The Risks Associated With Crypto Savings Accounts?

A crypto savings account can offer attractive interest rates that are often higher than traditional savings accounts, sometimes as much as 10% to 15% APY. This can make them appealing for potential profitability. However, it’s important to understand that with higher returns come higher risks:

Volatility Of Cryptocurrency

Cryptocurrencies like Bitcoin and Ethereum have volatile values. If you deposit at a high value and it drops, your savings’ worth can decrease despite earning interest.

Risks Of Crypto Savings Accounts

High interest rates in crypto savings accounts are attractive but come with risks. Sometimes, the APR might be too high for exchanges to honor, leading to potential losses for investors.

External Factors

Regulatory decisions, such as those by the Securities And Exchange Commission (SEC), can impact crypto prices and the market’s overall stability. This may lead to the SEC banning certain coins from exchanges leading to a potential loss of investment for the investor if the exchange fails to compensate the investor for the regulatory action brought forward.

Security Concerns

The crypto industry has faced issues related to hacks, fraud, scams, and potential systemic risks in certain jurisdictions. The exchange that the investor uses to earn rewards in the crypto savings account might be fraudulent leading to investor loss of capital. 


Exploring the crypto savings accounts can offer opportunities for those seeking higher returns in the evolving crypto financial landscape. However, given its early stage and high interest rate offerings, potential investors must exercise caution and arm themselves with comprehensive knowledge by carrying out necessary due diligence prior to sending funds to an exchange. 

The digital currency arena, though promising, holds complexities and uncertainties that distinguish it from conventional financial systems.


What Are Crypto Savings Accounts?

A crypto savings account provides a fusion between traditional banking and cryptocurrencies. Individuals store their digital currency holdings in these accounts and earn interest on the deposited assets. 

How Do Crypto Savings Accounts Work?

Crypto savings accounts operate similarly to regular savings accounts. Users move assets from crypto wallets to crypto exchange accounts. The cryptocurrency exchange uses the deposited funds to offer loans to other users whilst depositors earn interest.

What Are The Benefits of Crypto Savings Accounts?

The primary benefits include higher interest rates compared to traditional banking systems, platform-specific incentives, ease of onboarding, and potential earning opportunities similar to blockchain staking. 

What Risks Are Associated With Crypto Savings Accounts?

While the interest rates can be appealing, they come with inherent risks. The volatile nature of cryptocurrencies can impact the savings’ value. Regulatory changes can affect the market stability. Moreover, the crypto world has seen scams, frauds, and potential systemic risks.

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