Leading cryptocurrency banks such as Nexo and Blockfi are attracting a huge amount of attention presently. The present crypto banks saving rates in these banks is nearly 12% leaving behind high street savings accounts. But before you take a leap to earn interest on crypto there are few things that you should keep in your mind.
Primarily you will need to realize on what basis these banks are offering the interest. Apart from Nexo who provides up to 12% interest on US dollars, pounds, and euros, most of these digital currency banks allow the clients to save in cryptos such as Ethereum and Bitcoin or in stablecoins such as USDC or Tether which can be traded in one for one and in US dollars.
Stablecoins receive higher interest rates. For instance, in crypto interest accounts like Nexo pays 12% to Tether or USDC and 8% to Bitcoin. On the other hand, Blockfi pays 9.3% interest on Tether, 8.6% interest on USDC, and 5% interest on Bitcoin.
To be at par with these crypto banks saving rates, you will first have to convert your money in this form. To do so you can take the help of crypto exchanges like Binance and Coinbase or in a more limited way through crypto banks. For instance, if you transfer your US dollar to Blockfi they will automatically transfer that to crypto.
Most of the cryptocurrency banks give their users the opportunity to trade their money within their own platform. For instance from Gemini USD to Bitcoin. But despite stimulating zero fees for this facility, the crypto banks saving rates is not always the best. According to Blockfi, their cost of buying crypto may be higher than the market price by 1%.
If you save in digital currency the rate of interest will start to decrease the more you hold. For instance, the Blockfi interest rate for Bitcoin is 5% during deposits for less than 5 Bitcoin. When you start to deposit more than 5 Bitcoin the rate of interest starts to fall to 2% and finally 0.5%.
And finally, no crypto bank will guarantee you these rates of interest for a long period of time. The whole crypto market is very fluctuating in nature and so is the crypto banks saving rates.
Top 7 Crypto Savings Accounts
Below you will get a list of all the top savings accounts that are crypto based along with their top advertised yields on different digital currencies. But these accounts do not provide the similar safety that a credit union or bank savings account can offer. So before you start to invest it is very important that you understand these crypto savings accounts properly.
Blockfi is enabling high results that are accessible to many cryptocurrency investors without any minimum account. The extraordinary high yields on Bitcoin are attractive for investors with less than 5 Bitcoin. But investors with more than 5 Bitcoin will get an interest of 0.25%. This implies that the more you have, the less you earn.
Linus is a savings account that is crypto based which works and looks like a high yielding savings account. Investors can deposit US dollars and earn interest in US dollars. Along with that Linus is lending money to people to purchase Ethereum. This setup predicts a comparatively stable valuation on Ethereum that needs to be understood by the investors before opening a savings account.
Outlet Finance is an account that does not demand a lot of knowledge about any particular digital currency as it only pays you the interest in US dollars. Users can deposit US dollars and can earn interest in US dollars themselves. The only thing is that these dollars are being lent to the users to purchase Ethereum and other cryptocurrencies. Presently this company advertises to provide a 6% rate of interest on US dollars.
For the past few years, Gemini has been known to be the smartest choice for crypto trading and investing cryptocurrency and their structure is a backbone for many others. But Gemini was late in the field of cryptocurrency savings. They recently launched “Gemini Earn” where the users are provided with interest on their crypto holdings.
Coinbase is renowned as a digital wallet. But it also provides a digital crypto saving bank service, But they provide this service to some selected customers. Eligible US based clients can earn a good deal of interest. The current Coinbase interest rate is 4.00%.
Crypto.com advertises the highest rate of interest on the market. But there are specific terms that the users need to follow to get these rates. Investors that have smaller cryptos are likely to get better deals outside Crypto.com.
Nexo stimulates minimal time for lock up, and third-party guarantees their digital asset. This makes it an attractive choice with super high deals on US dollars and also some of the highest rates of interest on digital currencies.
The common thing among these savings accounts is they are all investment options. While the crypto banks saving rates is very lucrative, they do not have a guarantee. Each savings account that is crypto based is highly exposed to market fluctuations. Open a crypto savings account only if you are a believer in the future of digital currency.
Frequently Asked Questions On Crypto Bank Savings Rate
Presently the best crypto interest accounts are Blockfi and Nexa that are doing a great job in the crypto based savings account sphere. Other than that there are Coinbase, Outlet Finance, Crypto.com, Gemini, Linus.
For beginners, crypto-backed savings accounts aren’t insured by the government like traditional savings accounts, so they don’t offer account holders the safety and security they may be used to.
Cryptocurrency is a great digital asset for an ideal investment. Some digital currencies have better options for investment in 2021.