The financial industry has witnessed a rising number of crypto savings accounts advertising earning rates as high as 14.5% APY or more. But unlike traditional savings accounts, these interest accounts are built to hold your crypto investments. And they don’t come with the same safety nets you might be used to. The more you learn, the better equipped you’ll be to decide if the rewards of this new breed of accounts outweigh the risks.
How to compare crypto savings accounts
Not all crypto savings accounts are created equally. Some may offer higher APYs, while others offer stronger security. And within these elements are often more nuanced tiers and distinctions you’ll want to understand before signing up.
As crypto evolves, so too will the types of savings and interest accounts you can choose from. Some crypto savings accounts offer limited services, while others are all-in-one platforms that work as part of a cryptocurrency exchange.
You’ll find three main ways to start earning interest on your crypto investment:
If you’re new to crypto or don’t own any yet, consider a crypto savings account like Linus or Eco that allows you to deposit and withdraw in USD while handling all the crypto transactions for you in the background.
If you already own crypto, consider a crypto savings account like Hodlnaut, which pays interest on your deposited cryptocurrency.
To buy, sell and earn interest in one place, compare crypto exchanges like Nexo, Gemini or Crypto.com, which lets you automatically earn interest on assets you buy or trade.
Many providers and platforms offer savings accounts limited to popular cryptocurrency like Bitcoin, Ethereum and Litecoin.
Some accounts don’t require you to deposit crypto to start, and so it may not matter which coins are accepted. For example, Linus allows you to deposit in USD and converts your dollars into the stablecoin USDC. It then lends it out to borrowers, who pay set rates that then get passed on to you in the form of an APY.
Interest and earnings
A top factor to weigh is the account’s advertised APY — or the return on your investment. Unlike traditional savings accounts, the APY reflects a percentage of the cryptocurrency in your account as an asset, which can fluctuate depending on supply and demand. And you don’t always earn your interest in the same way as you do for a traditional savings account.
You typically earn in-kind interest with crypto banking products — meaning, you get paid in the interest of the crypto you’re earning interest on. Because these accounts earn interest in-kind, volatility doesn’t power the return. For example, a 4% LTC account will yield 4% over the year. But if the price of LTC drops by 50%, you could end up with a lower cumulative total in USD than your initial deposit.
Some platforms implement a split APY feature, where a percentage of returns are paid in a native cryptocurrency token. A crypto savings account may be advertised as having a 12% APY, but that high of a return requires you to receive 2% in the platform’s native coin. Or you might need to hold a specific number of the native coin before you’re eligible for the highest APY.
Interest payments too depend on the crypto savings account or platform you use. You could see your interest paid out in the same cryptocurrency you deposited, in a different cryptocurrency or government-backed fiat currency, like USD.
Compounding and frequency of payments can also vary by account or platform. Most accounts compound daily, though a few compound monthly or weekly — or, like Crypto Earn, not at all.
Access to your investment
Some providers require you to lock in your crypto for a set time to earn the maximum APY — part of validation of your asset. Once it’s validated, it needs to be added to the blockchain before you can earn rewards on it.
For example, Crypto Earn’s account requires you to lock in the equivalent of $40,000 worth of its native Cronos (CRO) for six months to earn its high 14% APY.
Another factor to consider is how easily you can withdraw your initial and earned deposit. For example, Nexo only gives you up to five free withdrawals a month, depending on how much of its native coin you keep in your account.
Private key control
Unlike traditional savings accounts that allow you control over your money, not all crypto savings accounts allow you to keep control over the keys to your crypto.
Noncustodial wallets like Coinbase leave you in control of the private keys to your cryptocurrency. You’re the sole owner of your digital assets across transactions on the platform.
Custodial accounts like Nexo require you to hand over your private keys, trusting the platform to act as the custodian for your crypto and manage it on your behalf.
Then there’s crypto savings accounts like Linus, where you don’t ever see the private keys to your assets. Rather, you deposit US dollars into the account, and the platform works with a licensed money transmitter that manages any crypto transactions in the background.
Cryptocurrency is a part of what’s called decentralized finance — or DeFi — which relies on a peer-to-peer system called the blockchain. It’s a system separate from centralized finance that’s regulated by the FDIC and SEC. And so consumer protections like FDIC insurance you might be used to won’t apply here.
You can mitigate risk by researching well-established cryptocurrency platforms that prioritize security. Two-factor authentication is good, but cold storage — or storing your assets offline in a place that’s not as easy to hack into — is much stronger. Platforms like Nexo extend coverage by partnering with third-party insurance companies to protect your assets against breaches or employee-related theft.
Search the headlines and forums like Reddit for news on the platform you’re interested in to weed out negative coverage around known vulnerabilities.
You may not be able to sign up for particular brands or products, depending on the state you live in.
State and federal laws around cryptocurrency are evolving as authorities look to maintain stronger control over wallets and exchanges operate. Despite government confusion as to whether crypto is a commodity or a currency, the SEC treats it as a security, with strict rules around who can buy and sell it.
States too are creating their own regulations, with New York State having among the strictest disclosure and consumer protection regulations around.
Are crypto savings accounts safe?
Due to the volatile nature of the cryptocurrency markets, crypto savings accounts aren’t insured by a government body like the Federal Deposit Insurance Corporation (FDIC) or Securities Investor Protection Corporation (SIPC). If the platform supporting a crypto savings account or wallet fails or is hacked, insurance isn’t in place to recover your funds.
How can I protect my funds?
Confirm if the platform offers its own insurance policy. Some crypto banks like Nexo partner with insurers to offer a level of protection. Others like Crypto.com rely on a native cryptocurrency token as its store of value, which can be used to make up for lost funds under specific circumstances.
If a platform doesn’t offer protection internally, it may offer third-party insurance to protect the digital assets stored in your crypto savings account:
BitGo. Among the largest institutional digital asset insurers, BitGo now secures digital assets up to a value of $100 million.
Ledger. Known for its popular cold storage cryptocurrency wallets, Ledger now offers its enterprise-focused Ledger Vault, which comes with a customized crime insurance program that insures assets worth up to $150 million.
Lloyd’s of London. A leading insurance marketplace, Lloyd’s of London now offers both institutional and personal protection of crypto assets. The service is provided through a partnership between Lloyd’s of London, BitGo and Coincover.
Carefully read any details of insurance protection to understand assets it does and does not cover. It may protect only cryptocurrency and not any fiat cash reserves held on the platform.
3 benefits of crypto savings accounts
If you own crypto or are curious about buying it, a crypto savings account can help you earn money on your investment and even spend it on everyday goods and services.
High potential returns. Crypto savings accounts advertise rates as high as 14.5% APY, which dwarfs the 0.06% APY national average for traditional savings accounts.
Access to your crypto. Many crypto savings accounts allow you to link to a debit card or even pay utility bills from your account. This flexibility improves the functionality of your digital assets that you’d otherwise need to convert back into cash before spending it.
Repeat customer benefits. The more you use a platform’s or exchange’s services, the greater your benefits may be. Celsius and Nexo support graduated loyalty tiers that help you earn bonus rewards, loan discounts and free withdrawals as your total token holdings grow.
3 potential drawbacks of crypto savings accounts
Crypto savings accounts differ from traditional savings accounts in key ways you’ll want to weigh before signing up.
No FDIC insurance. Crypto savings accounts are not eligible for FDIC insurance. If a crypto bank fails or a hacker steals funds from the platform, those funds may never be recovered. Even with internal measures, digital asset holdings are unlikely to be as well protected when compared with cash reserves held in a traditional bank account.
No control over private keys. When depositing cryptocurrency assets into a crypto savings account you may be required to relinquish control of the asset’s private keys. It is the private keys that dictate whether a cryptocurrency can be sold or transferred. By depositing funds into a third-party platform you are trusting that chosen platform to look after your digital assets correctly.
Withdrawal restrictions. With a traditional savings account, you can make up to six monthly withdrawals and with Regulation D suspended some banks have waived fees for withdrawals over this amount. Unfortunately, a crypto savings account is usually much more stringent. Since there’s no standardized rule, a platform is free to implement the policy that they feel works best.
Crypto savings accounts vs. traditional savings accounts
Crypto savings accounts look and act similar to traditional savings accounts you’d find at your local bank. They accept and store your cryptocurrency, allowing you to earn interest on your deposits.
These accounts don’t often offer the key safety nets like, FDIC insurance and streamlined tax reporting, that you’ll find with a traditional account. And while you can earn tempting rates as high as 14.5% or more on your savings, your interest is paid in cryptocurrency — meaning how much you earn can vary depending on the coin or token’s value.
We set out to compare crypto savings accounts to more familiar savings accounts to shed light on the earning potential you could be missing out on.
How we compared crypto to traditional savings accounts
The APY you’ll see with a crypto savings account comes down to the way in which you earn interest.
To illustrate the difference, we compared traditional savings accounts to crypto saving accounts against three scenarios:
Depositing $2,500 USD into both a crypto and a traditional savings account
Depositing $100,000 USD into both a crypto and a traditional savings account
Comparing savings across three specific products
Crypto savings accounts advertise APYs as high as 14.5% or more, which is more than 241 times the rate compared to a traditional savings account.
Crypto savings accounts offer APYs that depend on the type of cryptocurrency deposited. You’ll often earn higher APYs by depositing stablecoins — or cryptocurrency such as USDC that’s “pegged” to a stable asset like US dollars — instead of Bitcoin (BTC). But if BTC continues to hit all-time highs, you could see ever higher future savings than from earnings in US dollars.
Depositing $2,500 into traditional vs. crypto savings accounts
A savings account at a major bank offers an average APY of only 0.06% as of November 2021, according to the FDIC, while high-yield savings accounts advertise APYs of around 0.6% — about 10 times the savings of traditional savings accounts.
We found that for an equivalent of $2,500 deposited in USDC, the average APY for crypto savings accounts is 8.44% — or 140.6 times the savings compared to the FDIC national estimate for traditional savings accounts.
When the equivalent of $2,500 is deposited in BTC, the average APY is 4.50% — or 75 times the savings compared to the FDIC estimate for traditional savings accounts.
APYs for crypto translate to high savings over 10 years
An initial deposit of $2,500 into a traditional savings account with an 0.06% APY could grow to $2,515 over 10 years — a ho-hum $15 in earned interest overall. A high-yield savings account offers slightly higher accumulated savings: An initial deposit of $2,500 at 0.6% APY could grow to $2,654 over 10 years — an overall $154 in earned interest.
Compare that to a crypto savings account, where depositing the equivalent of $2,500 in USDC at an APY of 8.44% could grow your balance to $5,621 after 10 years — a whopping $3,121 gained as interest. It’d take you some 1,350 years to save that amount with a traditional savings account at current rates!
Depositing $2,500 in BTC into a crypto savings account results in higher balances than you can earn with a traditional savings account, though not as much as you’d save by depositing USDC. Assuming BTC remains the same price, your initial equivalent deposit of $2,500 at 4.50% APY results in an ending balance of $3,882 — or $1,382 gained as interest.
Ending balance at 10 years
Difference from traditional savings
Traditional savings account
High-yield savings account
Crypto savings accounts — equivalent USDC deposit
Crypto savings accounts — equivalent BTC deposit
BTC price speculation and your potential earnings
Fluctuations in the future price of BTC means a higher potential for gains — and losses.
A deposit of $2,500 USD converts to about 0.040 BTC as of November 2021. At current average interest rates for crypto accounts, that value could grow to 0.0606 BTC in 10 years — or $3,882 at current BTC prices.
If the price of BTC continues to reach all-time highs, your potential gains could be much higher:
If BTC reaches $100,000 in 10 years, the value of your initial deposit could be worth $3,901 in USD. Expected interest over 10 years is 0.0216 BTC — worth $2,150 — for a total balance of $6,058.
If BTC reaches $500,000 in 10 years, the value of your initial deposit could be worth $19,505 in USD. Expected interest over 10 years is 0.0216 BTC — worth $10,784 in USD — for a total balance of $30,290.
If BTC reaches $1 million in 10 years, the value of your initial deposit could be worth $39,011 in USD. Expected interest over 10 years is 0.0216 BTC — worth $21,569 in USD — for a total balance of $60,580.
Projected savings and value depending on price of BTC in 10 years
Predicted price of BTC in 10 years
Predicted value of 0.039 BTC in USD in 10 years
Predicted value of 0.0606 BTC in USD in 10 years
For crypto enthusiasts bullish about BTC’s future, the possible gains could make depositing BTC into crypto savings accounts an attractive prospect.
Depositing $100,000 into traditional vs. crypto savings accounts
If you deposit $100,000 into a crypto savings account, you’d earn more interest on that deposit over a traditional savings account, though not quite as much as when depositing $2,500. That’s because crypto savings products often tier APYs, offering lower rates for higher balances.
The average APY for depositing the equivalent of $100,000 USDC into a crypto savings account is 8.16% — slightly lower than the 8.44% APY when depositing the equivalent of $2,500 USDC.
The average APY for depositing the equivalent of $100,000 BTC is 4.19% — slightly lower than the 4.50% APY depositing the equivalent of $2,500 in BTC.
Your savings over 10 years
An initial deposit of $100,000 into a traditional savings account earning 0.06% APY could grow to $100,602 after 10 years — or $602 in earned interest overall. A high-yield savings account offers slightly higher accumulated savings: An initial deposit of $100,000 earning 0.60% APY could grow to $106,165 over 10 years — an overall $6,165 in earned interest.
Compare that to a crypto savings account, where depositing the equivalent of $100,000 in USDC at an 8.16% APY could grow your balance to $219,148 after 10 years — or $119,148 gained as interest. Depositing the equivalent of $100,000 in BTC into a crypto savings account at 4.19% APY could land you an ending balance of $155,290 — or $55,290 gained as interest.
Ending balance at 10 years
Difference from traditional savings
Traditional savings account
High-yield savings account
Crypto savings accounts — equivalent USDC deposit
Crypto savings accounts — equivalent BTC deposit
How inflation can affect your potential earnings
Inflation soared to a 31-year high in October 2021, with prices rising 6.2% over the 12 month period ending in October. When inflation is higher than your interest rates, that means that the value of your savings will decrease over time in present dollars.
If the pace of inflation continues at 6.2%, your savings can lose their value depending on your interest rate.
If you invest $100,000 in a traditional savings account with an APY of 0.06%, in 10 years your balance will be $100,602. Based on an annual 6.2% inflation rate, that’s equivalent to $54,797 in 2021 dollars.
If you invest $100,000 in a high-yield savings account with an APY of 0.06%, in 10 years your balance will be $106,165. Based on an annual 6.2% inflation rate, that’s equivalent to $55,127 in 2021 dollars.
If you invest the equivalent of $100,000 in USDC in a crypto savings account with an APY of 8.16%, in 10 years your balance will be $219,148. Based on an annual 6.2% inflation rate, that’s equivalent to $120,086 in 2021 dollars.
If you invest the equivalent of $100,000 in BTC in a crypto savings account with an APY of 4.19%, in 10 years your balance will be $155,290. Based on an annual 6.2% inflation rate, that’s equivalent to $85,094 in 2021 dollars.
So if you put your savings into a traditional savings account or high-yield savings account, in 10 years, taking inflation into account, you’ll have less money than you deposited. Depositing your savings into a crypto interest account with bitcoin also leaves you with less money than you deposited, although the potential price appreciation of bitcoin could offset (or increase) the loss in value. Only depositing into a crypto interest account with USDC leaves you with a higher savings than you started in 2021 dollars.
Potential savings across 3 specific products
To highlight the potential savings for each type of savings account, we chose three products to illustrate potential savings over 10 years. We calculated savings based on an initial deposit of $2,500 along with a monthly deposit of $500 over 10 years, using current advertised rates at the time of comparison:
Bank of America Advantage Savings — 0.01% compounded daily
Ally High Yield Savings Account — 0.50% compounded monthly
Nexo Earn — 10.0% compounded monthly
We further chose one product for each type of savings account: traditional, high-yield and crypto savings.
Of the three savings accounts we compared, interest earnings ranged from a low $32 to an incredible $44,713:
Bank of America Advantage Savings grew to an ending balance of $62,532, for $32 in earned interest.
Ally High Yield Savings Account grew to an ending balance of $64,162, for $1,662 in earned interest.
Nexo Earn grew to an ending balance of $107,213, for $44,713 in earned interest.
Ally earns $1,630 more in interest over Bank of America Advantage Savings across 10 years – 50.5 times more than Bank of America.
And Nexo Earn earns $44,681 more interest than Bank of America Advantage Savings over 10 years – 1,385 times more than Bank of America.
How do I open a crypto savings account?
Each platform or exchange requires different steps to sign up — for instance, you don’t need crypto to start with Linus, whereas you do with Crypto.com.
To start, look for a Sign up or Register button on your platform’s site, and follow the steps required.
Crypto savings accounts are now offering cryptocurrency investors a way to put idle cryptocurrency assets to work. The interest rates are multiple times higher than those currently offered by the traditional banking sector and the range of cryptocurrency asset accounts is constantly expanding.
While interest rates may be high, crypto savings accounts aren’t as well regulated as traditional savings accounts and there’s no FDIC protection due to the greater counterparty risk. Many accounts also have some limitations with withdrawal and overall custody of digital assets.
For those with substantial cryptocurrency holdings that are willing to overlook short-term market volatility, depositing a set percentage into a crypto savings account can help boost passive returns.
We analyzed 18 crypto savings and interest accounts, attempting to include major available products for the US market:
Abra Interest Account
Binance Flexible Savings
BlockFi Interest Account
Ledn Savings Accounts
Nexo (cryptocurrency savings account)
Voyager Earn Program
Gemini Earn is not included in the USDC average rate, because it doesn’t accept USDC. Similarly, CoinRabbit and Outlet Finance aren’t included in the BTC average savings rate. Notably, we excluded Linus from our comparison, because it’s waitlisted and isn’t widely available to the public. Note: YouHodler isn’t available in the US and the BlockFi Interest account was available for US customers at the time the data was analyzed and published, but it’s no longer available for new US customers at this time.
To calculate the average APY, we looked at the rates for USDC and BTC for each product based on flexible, nonfixed terms for in-kind interest. For products that offer tiered interest rates, we calculated the APY based on investing:
Although some crypto interest products offer more frequent compounding at weekly or daily, for our estimated crypto savings over 10 years, we compounded interest monthly. But we calculated estimated savings for traditional and high-yield savings accounts based on interest compounded daily.
Alexa Cruz is a lead personal finance editor at Finder, specializing in consumer and business banking, including kids' debit cards. A certified anti–money laundering specialist, Alexa helps guide readers to the best savings and checking accounts for their financial goals. Her expertise and analysis on saving, budgeting and getting the most out of your money has been featured in Best Company, U.S. News & World Report, MSN and Yahoo, among other top media. Her commentary has been included in broadcast news publications that include Fox News and NBC News. Alexa holds a BA in English from Wesleyan College and enjoys reading memoirs in her spare time.
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