Those who have U.S. dollars saved can earn interest on that cash by stashing it in a high-yield savings account or CD with a bank.
But can you do something similar with your crypto assets? Yes, depending on where you hold your cryptocurrency and which coins and tokens you own, you can earn interest on your crypto while you HODL.
Here’s an in-depth look at how crypto savings accounts work, where to find one, and if they could make sense for you.
What Is A Crypto Savings Account?
A crypto savings account is a cryptocurrency account that allows you to store currency and earn interest. This works much like a traditional bank savings or brokerage account, with a few key differences we’ll cover below.
The most important features of a cryptocurrency savings account are account security and interest payments. If you stick with a well-reputed exchange and follow online security best habits around passwords and two-factor authentication, your currency should be safe and secure from hackers and other losses.
But keep in mind that unlike traditional bank savings accounts, crypto savings accounts can't offer any federal insurance to protect your crypto assets. Even if the company advertises that it offers FDIC insurance, this would only apply to the cash in your account that hasn't been converted to crypto yet and lent out.
But if your cryptos are lost, stolen, or the crypto savings platform goes belly up, you could lose all of your initial deposit. That makes these account more risky than bank savings accounts which are insured up to $250,000 per depositor by the FDIC.
For this reason, we don't recommend that anyone move their emergency fund over to a crypto interest account. However, these accounts can be a great way to earn steady income on cryptos that you already hold and increase your investment yield.
How Crypto Savings Accounts Work
Crypto savings accounts use a combination of methods to generate interest for crypto holders. Similar to a bank, cryptocurrency can be lent for interest. But the nature of decentralized finance (DeFi) applications adds more ways to generate income from savings.
- Staking: With staking, you contribute your currency toward the blockchain network’s proof-of-stake protocol, earning you a small cut of mining earnings. Some cryptocurrency exchanges provide this service for you, though they may take a cut of your profits as a fee.
- Lending: Crypto lending works like bank lending but uses smart contracts and blockchains. Crypto lending to others with Bitcoin, Ethereum, and other currencies may earn you a high rate of return.
- Liquidity pools: Liquidity pools allow users to buy and sell cryptocurrency on decentralized exchanges. The pool is a crowd-sourced list of tokens locked into a smart contract used to facilitate trades on the exchange. For contributing their currency to the pool, holders can earn fees and rewards.
These methods of earning interest may also be known as yield farming in some corners of the cryptosphere.
Pros & Cons Of Cryptocurrency Savings Accounts
8 Top Crypto Savings Accounts For 2022
Want to earn more from your crypto or get started with cryptocurrency interest? Here are some top account providers to consider.
APY On Bitcoin
13.86% on UST
18.63% on SNX
(In-CEL reward rate)
Up to 6.20%
(In-CEL reward rate)
8.05% on GUSD
14.50% on DOT
5.00% on ATOM
9% on USDC
20% on MATIC
(limited time offer)
Up to 8%
7.00% on USDC
Up to 3.00%
Hodlnaut is a Singapore-based crypto savings account that allows US-users (and worldwide users). It offers some of the most competitive savings rates on certain cryptocurrencies, including up to 12.73% APY on USDT and USDC.
It also offers solid rates on BTC and ETH, up to 7.46% APY.
Plus, you can get some awesome sign-up bonuses when you join.
For U.S residents, Celsius offers interest rates of up to 14.05% and up to 6.20% on Bitcoin. International residents can earn even more (up to 17.85%) by receiving their rewards in CEL, which is the utility token of the Celsius Network.
Celsius pays interest on over 40+ coins and it's one of the only platforms that never charges withdrawal fees. Plus, it offers generous sign-up bonuses of $10 to $600 to new customers.
Note: Celsius only allows interest and earning for accredited U.S. investors and international customers.
Gemini is a cryptocurrency platform with a wide range of features, including an active trading exchange and a competitive earn program. For stablecoins, including Gemini’s own Gemini dollar, you can earn up to 8.05%, with rewards paid daily. Rates vary by currency for others. You’ll get 1.49% for Bitcoin, 1.76% for Ether, and 3.78% for Dogecoin, for example.
Gemini makes earning very easy. You just have to transfer the currency from your trading account to your earn account to earn rewards. With support for dozens of currencies, Gemini could be a good choice for anyone with a large number of popular cryptocurrencies.
At Crypto.com, you can earn up to 14.5% interest on cryptocurrencies. Rewards rates vary by currency.
You can qualify for the best rates by holding a significant stake in the CRO currency, Crypto.com’s in-house creation. However, even those without CRO can earn reasonably good rates, like 6% on USDC.
Higher reward rates unlock at $400, $4,000, and $40,000 or more in CRO deposits. You can also increase your rate by locking in your deposit for one or three months. While this system is somewhat complex, those with a high stake in CRO are rewarded with rates among the best in the industry.
Coinbase is the biggest cryptocurrency exchange in the U.S. While it’s great for buying and selling (we prefer the Coinbase Pro platform with lower fees and more features), it offers somewhat unexciting rates when you stake in your main Coinbase account.
Reward payments are automatic, but there are only six currencies supported. As examples, you’ll get 0.15% on USD Coin, 2% on DAI, and 4.5% on Ether.
Coinbase isn’t the best for staking, but if you’re looking for an easy place to buy Bitcoin and other cryptos, Coinbase is a solid choice. And you can earn a few bucks from staking along the way.
With Outlet Finance, your dollars are converted into USD Coin and pooled through a lending partner. Pools are lent to cryptocurrency exchanges, hedge funds, small businesses, and individual borrowers through a regulated process.
You can earn 9% per year for contributing to the pool, though there are some risks involved if a borrower doesn’t repay a loan. Overall, however, it’s a solid system for earning income through the cryptocurrency ecosystem.
Nexo supports a unique lending program that pays users up to 20% annual interest, a pretty incredible rate. Payouts are made daily.
Your earnings rate depends on your balance and the specific coin you deposit. There are about two dozen currencies supported, which higher rates paid when you’re willing to take rewards in Nexo’s NEXO currency.
The top rates are limited-time offers for MATIC (20%) and AVAX (17%). Stablecoins pay 12% and most others pay 8%.
Note: Nexo recently paused new deposits for Nexo Interest for US-based customers.
BlockFi was a significant player in cryptocurrency savings, with high yield accounts and a crypto rewards credit card, among other features. With stablecoins, you can earn up to 7.00% interest on up to $20,000 of holdings.
Bitcoin holders earn up to 3.00%, while ETH pays up to 3.00%. The rate you earn goes down as your balance increases.
However, BlockFi Interest Accounts (BIA) are no longer offered to new clients who are U.S. Persons or persons located in the United States. Existing clients that are U.S. persons or located in the United States will be unable to transfer new assets to their BIAs. The BIAs have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States, to U.S. persons, for the account or benefit of a U.S. person or in any jurisdiction in which such offer would be prohibited.
BlockFi is a fully-featured platform with 13 supported currencies for interest. There’s no minimum to what you can earn. The top rate is 7.00% as of this writing. BlockFi has no minimum balance requirements to earn interest.
The cryptocurrency and decentralized finance (DeFi) marketplace is still in its infancy. So there’s likely to be many more and potentially better crypto savings accounts in the future.
But for now, cryptocurrency HODLers are wise to put their assets into an interest-earning account. It gives you a chance to earn passive income on your crypto even while you wait patiently for prices to hopefully rise over time.
Eric Rosenberg is a financial writer, speaker, and consultant based in Ventura, California. He holds an undergraduate finance degree from the University of Colorado and an MBA in finance from the University of Denver. After working as a bank manager and then nearly a decade in corporate finance and accounting, Eric left the corporate world for full-time online self-employment. His work has been featured in online publications including Business Insider, Nerdwallet, Investopedia, The Balance, HuffPo, Investor Junkie, and other fine financial blogs and publications. When away from the computer, he enjoys spending time with his wife and three children, traveling the world, and tinkering with technology. Connect with him and learn more at EricRosenberg.com.